UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-K/A



ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF

THE SECURITIES AND EXCHANGE ACT OF
1934



For the Fiscal Year Ended December
31, 2011



Commission File Number 000-29507



CHANTICLEER HOLDINGS, INC.

(Exact name of registrant as specified in
the charter)



|Delaware                        | 20-2932652            
|------------------------------- | ----------------------
|(State or other jurisdiction of | (I.R.S. Employer      
|incorporation or organization)  | Identification Number)



11220 Elm Lane, Suite 203, Charlotte,
NC 28277

(Address of principal executive offices)
(Zip Code)



| | Registrant's telephone number, including area code: | (704) 366-5122 | 
| | --------------------------------------------------- | -------------- | 



Securities registered pursuant to Section
12(g) of the Act:



Common Stock, $0.0001 par value

(Title of Class)



Indicate by check
mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  ̈
Yes x No.



Indicate by check
mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  ̈
Yes x No.



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 past 12 months (or for such shorter period that 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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files). Yes x No  ̈.



Indicate by check
mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K.  ̈



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 definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerate 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 x No.



State the aggregate
market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the
common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s
most recently completed second fiscal quarter ($2.99 per share) (1,699,892 of 2,460,974 shares outstanding): $5,082,700 as of June
30, 2011.



Indicate the number
of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. There were
3,012,121 shares of common stock issued and 2,498,891 shares outstanding as of February 29, 2012.



DOCUMENTS INCORPORATED
BY REFERENCE: No documents are incorporated by reference into this Report except those Exhibits so incorporated as set forth in
the Exhibit index.











EXPLANATORY NOTE



We filed our Annual
Report on Form 10-K for the year ended December 31, 2011 on April 6, 2012 (the "Original Report"). We are filing this
Amendment No. 1 on Form 10-K/A-1 (this " Amendment") to make the following changes:



| | · | To add Note 17 for the restatement;
| | - | -----------------------------------

| | · | To update management discussion and analysis in Item 7;
| | - | -------------------------------------------------------

| | · | To restate financial statements as required;
| | - | --------------------------------------------

| | · | To add restated reference in the financial statements;
| | - | ------------------------------------------------------

| | · | To amend disclosure of Controls and Procedures in Item 9A; and
| | - | --------------------------------------------------------------

| | · | Provide currently dated Exhibit Nos. 31-1 and 32-1.
| | - | ---------------------------------------------------



No other changes have
been made to the Form 10-K.  This Amendment No. 1 to the Form 10-K speaks as of the original filing date of the Form 10-K,
does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way
disclosures made in the original Form 10-K.



On September
7, 2012, the audit committee of Chanticleer Holdings, Inc. (the “Company”), upon recommendation of
the Company’s management determined that the Company’s Consolidated Financial Statements for its fiscal year
ended December 31, 2011 could no longer be relied on. The Company determined that the Financial Statements of Kiarabrite
(Pty) Ltd., Dimaflo (Pty) Ltd., Tundraspex (Pty) Ltd., Civisign (Pty) Ltd.,  Dimalogix (Pty) Ltd., and Chanticleer & Shaw
Foods (Pty.) Ltd. (collectively referred to as the “South Africa Operations”) which are the South African
management company and the four entities organized for the stores we operate in South Africa, and the company that owns the
HOA franchise rights for the territory of South Africa, were not audited as the Company was led to believe. Accordingly, this
Amendment is being filed to include the report of the independent registered public accounting firm responsible for
performing the audit of our South Africa Operations. We have made no attempt in this Amendment to modify or update the
disclosures presented in the Original Report other than as noted in the previous paragraph. Also, this Amendment does not
reflect events occurring after the filing of the Original Report. Accordingly, this Amendment should be read in conjunction
with the Original Report and our other filings with the SEC subsequent to the filing of the Original Report.



2







Chanticleer Holdings, Inc.

Form 10-K/A Index



|           |                                                                                                              | Page
|---------- | ------------------------------------------------------------------------------------------------------------ | ----
|           |                                                                                                              |     
|Part I     |                                                                                                              |     
|           |                                                                                                              |     
|Item 1:    | Business                                                                                                     | 4   
|Item 1A:   | Risk Factors                                                                                                 | 7   
|Item 2:    | Properties                                                                                                   | 7   
|Item 3:    | Legal Proceedings                                                                                            | 7   
|Item 4:    | [Removed and Reserved]                                                                                       | 7   
|           |                                                                                                              |     
|Part II    |                                                                                                              |     
|           |                                                                                                              |     
|Item 5:    | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 8   
|Item 6:    | Selected Financial Data                                                                                      | 9   
|Item 7:    | Management’s Discussion and Analysis of Financial Condition and Results of Operation                         | 9   
|Item 7A:   | Quantitative and Qualitative Disclosures about Market Risk                                                   | 16  
|Item 8:    | Financial Statements and Supplementary Data                                                                  | 17  
|Item 9:    | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         | 53  
|Item 9A:   | Controls and Procedures                                                                                      | 53  
|Item 9B:   | Other Information                                                                                            | 54  
|           |                                                                                                              |     
|Part III   |                                                                                                              |     
|           |                                                                                                              |     
|Item 10:   | Directors, Executive Officers and Corporate Governance                                                       | 55  
|Item 11:   | Executive Compensation                                                                                       | 57  
|Item 12:   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               | 58  
|Item 13:   | Certain Relationships and Related Transactions, and Director Independence                                    | 59  
|Item 14:   | Principal Accountant Fees and Services                                                                       | 61  
|           |                                                                                                              |     
|Part IV    |                                                                                                              |     
|           |                                                                                                              |     
|Item 15:   | Exhibits and Financial Statement Schedules                                                                   | 63  
|Signatures |                                                                                                              | 64  



3







Part I



Forward
Looking Statements



This Annual Report
contains forward-looking statements within the meaning of the federal securities laws that involve a number of risks and uncertainties.
Our future results may differ materially from our historical results and actual results could differ materially from those projected
in the forward-looking statements as a result of certain risk factors. Among the factors that could cause actual results to differ
materially from those expected are the following: business conditions and general economic conditions; competitive factors, such
as pricing and marketing efforts; and the pace and success of product research and development. These and other factors may cause
expectations to differ.



Effective March 23,
2011, the Company's common stock was forward split, 2 shares for each share issued, pursuant to written consent by a majority of
the Company's shareholders. All share references have been adjusted as if the split occurred prior to all periods presented.



| | Item 1: | Business
| | ------- | --------



GENERAL DEVELOPMENT OF BUSINESS

The consolidated financial
statements include the accounts of Chanticleer Holdings, Inc. and its subsidiaries, Chanticleer Advisors, LLC, (“Advisors”),
Avenel Ventures, LLC ("Ventures"), Avenel Financial Services, LLC ("AFS"), Chanticleer Holdings Limited ("CHL"),
Chanticleer Holdings Australia Pty, Ltd. (“CHA”), Chanticleer Investment Partners, LLC (“CIP”), DineOut
SA Ltd. ("DineOut"), Chanticleer and Shaw Food (Pty) Ltd. (“C&S”), Kiarabrite (Pty) Ltd (“KPL”),
Dimaflo (Pty) Ltd (“DFLO”), Tundraspex (Pty) Ltd (“TPL”), Civisign (Pty) Ltd (“CPL”), Dimalogix
(Pty) Ltd (“DLOG”) and Crown Restaurants Kft. (“CRK”) (collectively referred to as “the Company,”
“we,” “us,” or “the Companies”).



Information regarding
the Company's subsidiaries is as follows:



| | · | Advisors
                                                                                                              was formed as a
                                                                                                              wholly owned Nevada
                                                                                                              Limited Liability
                                                                                                              Company on January
                                                                                                              18, 2007 to manage
                                                                                                              related companies,
                                                                                                              Chanticleer Investors,
                                                                                                              LLC ("Investors
                                                                                                              LLC"), Chanticleer
                                                                                                              Investors II, LLC
                                                                                                              ("Investors
                                                                                                              II") and other
                                                                                                              investments owned
                                                                                                              by the Company (For
                                                                                                              additional information,
                                                                                                              see www.chanticleeradvisors.com.);
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Ventures was formed as a wholly owned Nevada Limited Liability Company on December 24, 2008 to
provide business management and consulting services to its clients;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | CHL was formed as a wholly owned Limited Liability Company in Jersey on March 24, 2009 to own the
Company's initial 50% interest in Hooters SA, GP, the general partner of the Hooters restaurant franchises in South Africa;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | CHA was formed on September 30, 2011 in Australia as a wholly owned subsidiary to invest in Hooters
restaurants in Australia;
| | - | -----------------------------------------------------------------------------------------------------------------------------



| | · | CIP was formed as a wholly owned North Carolina limited liability company on September 20, 2011.
CIP has not commenced business at December 31, 2011. CIP was formed to manage separate and customized investment accounts for investors.
The Company plans to register CIP as a registered investment advisor with the state of North Carolina so that it can market openly
to the public;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | DineOut was formed as a Private Limited Liability Company in England and Wales on October 29, 2009
to raise capital in Europe for Hooters South African stores (the Company owns approximately 89% of DineOut at December 31, 2011;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | KPL was formed on August 30, 2011 in South Africa to manage the Hooters restaurants in South Africa.
The Company owns 80% and local management owns 20% at December 31, 2011;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | C&S was formed in 2009 in South Africa, is owned 100% by the Company, and holds the
                                                                                                              Hooters of America (“HOA”) franchise rights in South Africa;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | DFLO was formed on August 16, 2011 in South Africa, is owned 52% by the Company and 48% by outside
investors at December 31, 2011 and owns the Hooters restaurant in Durban, South Africa;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



4







| | · | TPL was formed on August 18, 2011in South Africa, is owned 66% by the Company and 34% by outside
investors at December 31, 2011 and owns the Hooters restaurant in Johannesburg, South Africa;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | CPL was formed on August 29, 2011 in South Africa, is owned 60% by the Company and 40% by outside
investors at December 31, 2011 and owns the Hooters restaurant in Cape town, South Africa;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | DLOG was formed on August 27, 2011 in South Africa, is owned 100% by the Company at December 31,
2011 and owns the Hooters restaurant in the Emperor’s Palace in Johannesburg, South Africa;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | CRK was formed on October 12, 2011 in Hungary, is owned 80% by the Company and 20% by a local investor
at December 31, 2011 and is intended to own restaurants in Hungary and Poland; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | AFS was formed as a Nevada Limited Liability Company on February 19, 2009 to provide unique financial
services to the restaurant, real estate development, investment advisor/asset management and philanthropic organizations. AFS's
business operation was not activated and was discontinued in September 2011.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Information regarding the Company’s
unconsolidated affiliates is as follows:



| | · | Investors LLC is a limited liability company formed in 2006 through which the Company raised $5,000,000
and began its relationship with Hooters of America, Inc. (“HOA”). Initially structured as a loan transaction, the loan
was repaid in early 2011 and $3,550,000 was invested in HOA Holdings, LLC (“HOA LLC”). HOA LLC completed the acquisition
of HOA and Texas Wings, Inc. (“TW”) in early 2011 and created an operating company with 161 company-owned locations
across sixteen states, or nearly half of all domestic Hooters restaurants and over one-third of the locations worldwide. Investors
LLC owns approximately 3.1% of HOA LLC and the Company owns approximately 14% of Investors LLC.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Investors II is a fund with $2,650,660 in net assets at January 1, 2012, is managed by Advisors
and receives performance fees.
| | - | ------------------------------------------------------------------------------------------------------------------------------



| | · | Chanticleer Dividend Fund, Inc. (“CDF”) was formed on November 10, 2010 in Maryland.
CDF filed a registration statement in January 2011 under Form N-2 with plans to register as a non-diversified, closed-end investment
company. Advisors will have a role in management of CDF when its registration statement becomes effective.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Chanticleer Foundation, Inc. (“CF”) is a non-profit organization formed for charitable
purposes. CF is controlled by its board, which consists of Mr. Pruitt, a director of the Company and an employee of the Company.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We have changed our
focus recently from managing investments to owning and operating Hooters franchises internationally.  Hooters restaurants
are casual beach-themed establishments with sports on television, jukebox music, and the “nearly world famous” Hooters
Girls.  The menu consists of spicy chicken wings, seafood, sandwiches and salads.  Each locations menu can
vary with the tastes of the locality it is in.  Hooters began in 1983 with its first restaurant in Clearwater, Florida.
From the original restaurant and licensee Mr. Robert Brooks, Hooters has become a global brand, with locations in 44 states domestically
and over 450 Hooters restaurants worldwide. Besides restaurants, Hooters has also branched out to other areas, including licensing
its name to a golf tour and the sale of packaged food in supermarkets.



We expect to either
own 100% of the Hooters franchise or partner with a local franchisee in the countries we target.   We based this
decision on what we believe to be the successful launch of our South African Hooters venture and believe we have aligned partners
and operators in various international markets. We are focused on expanding our Hooters operations, and expect to use substantially
all the net proceeds from the upcoming offering, in the following countries: South Africa, Brazil, Hungary, Australia and Europe.



Accordingly, we operate
in two business segments, Hooters franchise restaurants and our continuing investment management and consulting services businesses.



5







South Africa



We currently have
four Hooters locations in South Africa in Cape Town, Durban and Johannesburg (two locations), which are owned by four companies
which we control.  In order to obtain investor funds to pay for the initial costs involved in commencing operations for
each of the South Africa locations, we agreed to allocate a portion of the profits from each restaurant such that the investors
in Cape Town, Durban, and the first Johannesburg location receive 40% of the net profits after taxation (the “SA Profits”)
until they have received a return of their investment and a pre-tax annual compounded return on that investment of 20% (the “SA
Return”).  Once the investors have received the SA Return, the investors are thereafter entitled to receive 10%,
respectively, of the SA Profits.



We formed a management
company to operate the current South African Hooters locations.  We own 80% of the management company, with two members
of local management owning the remaining 20%.  The management company currently charges a management fee of 5% of net
revenues to the Hooters locations in South Africa.



Other Countries



We are currently targeting
the following countries for the opening of additional restaurants:



| | · | Brazil - we have acquired development rights for Hooters in five states of Brazil, which would include Rio de Janeiro.  We
will partner with the current local franchisee who owns the Hooters franchise rights in the state of Sao Paolo and we will own
60% of the entity holding the development rights and our local partner would own the remaining 40%.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Hungary - we have applied to HOA for franchise rights in Hungary, where we currently own 80% of the entity we anticipate
will hold the franchise rights and our local partner owns the remaining 20%.  We anticipate that we will contract with
our local partner, who we believe is an experienced franchise restaurateur, to manage the day-to-day operations of the locations.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Australia - we have partnered with the current Hooters franchisee in a joint venture in which we own 49% and our partner
51%.  The first Hooters restaurant under this joint venture (which would be the third Hooters restaurant currently open
in Australia) opened in January 2012 in Campbelltown, a suburb of Sydney.  We are in discussions to purchase from the
same franchisee a partial interest in the first two existing Hooters locations in the Sydney area. We plan on opening our second
jointly-owned Australian Hooters in the second quarter of 2012.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Europe – we have a non-binding letter of intent with a current franchisee to purchase 100% of an existing
Hooters location.
| | - | ---------------------------------------------------------------------------------------------------------------------------



Acquisition of Hooters Restaurants



Our trend toward focusing
on Hooters arose when the Company and our partners completed the acquisition of HOA and TW in 2011.   Investors LLC and
its three partners, H.I.G. Capital, KarpReilly, LLC and Kelly Hall, president of TW, the largest Hooters franchisee in the United
States, combined to form HOA LLC which created an operating company with 161 company-owned locations across sixteen states, or
nearly half of all domestic Hooters restaurants and over one-third of the locations worldwide. The Company now owns approximately
14% of Investors LLC, and Investors LLC owns approximately 3% interest in HOA LLC.  As of December 31, 2011, the Company
has not received any revenue from our equity interest in HOA LLC.



The Company received
a payment of $400,000 at closing for its services and expense reimbursement in facilitating the acquisition of HOA and TW.  In
addition, for a minimum of four years, the Company will receive annual payments of $100,000 due in January each year while Mr.
Pruitt serves on its board.



6







Management and consulting services



The Company provides
management and consulting services for small companies which are generally seeking to become publicly traded.  The Company
also provides management and investment services for Investors LLC and Investors II, which are affiliates of the Company, and plans
to provide services for CDF when it’s registration statement becomes effective. We will occasionally invest in other non-Hooters
related opportunities when we believe this is in the best interests of the Company and its shareholders.



Corporate Information



Chanticleer Holdings,
Inc. was organized October 21, 1999, under its original name, Tulvine Systems, Inc., under the laws of the State of Delaware. The
Company previously had limited operations and was considered a development stage company until July 2005. 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.



Our principal executive offices are located
at 11220 Elm Lane, Suite 203, Charlotte, NC  28277.   Our web site is www.chanticleerholdings.com.



EMPLOYEES



We had 95 (90 in South
Africa) and 5 full-time employees at our U.S. office at December 31, 2011 and 2010, respectively.



Our employees are
not represented by a labor union. We have experienced no work stoppage and believe that our employee relationships are good.



| | Item 1A: | Risk Factors
| | -------- | ------------



Not applicable.



| | Item 2: | Properties
| | ------- | ----------



Effective
August 1, 2010, the Company renewed its office lease agreement for a period of one year at a monthly rental of $2,100, for its
office located at11220 Elm Lane, Suite 103, Charlotte, NC 28277. Since August 1, 2011, the lease has continued on a month-to-month
basis.



The
Company leases the land and building for our four restaurants in South Africa (three of which were open as of December 31, 2011
and one of which opened in February 2012) through our subsidiaries. The leases are for five year terms and include options to extend
the terms. We lease our restaurant facilities under “triple net” leases that require us to pay minimum rent, real estate
taxes, maintenance costs and insurance premiums and, in some instances, percentage rent based on sales in excess of specified amounts.



Our office and restaurant
facilities are suitable and adequate for our business as it is presently conducted.



| | Item 3: | Legal proceedings
| | ------- | -----------------



We are not currently
subject to any legal proceedings, nor, to our knowledge, is any legal proceeding threatened against us. However, from time to time,
we may be a party to certain legal proceedings in the ordinary course of business.



| | Item 4: | [REMOVED AND
RESERVED]
| | ------- | ----------------------



N/A.



7







Part II



| | Item 5: | Market for
Registrant’s Common Equity, Related Stockholder Matters AND ISSUER PURCHASES OF EQUITY SECURITIES
| | ------- | ------------------------------------------------------------------------------------------------------------



Our common stock is
currently listed on the electronic quotation and reporting service maintained by the National Association of Securities Dealers
(“NASD”) and known as the “OTC Bulletin Board” or “OTCBB” system and currently trades under
the symbol "CCLR".



The market closing,
high and low prices during the period ended March 23, 2012 and each quarter for the two years ended December 31, 2011, are as follows:



|QUARTER ENDED          |  | CLOSING |      |  | HIGH |   |      | LOW | 
|---------------------- |  | ------- | ---- |  | ---- | - | ---- | --- | 
|                       |  |         |      |  |      |   |      |     | 
|Through March 23, 2012 |  | $       | 3.25 |  |      | $ | 3.70 |     | 
|                       |  |         |      |  |      |   |      |     | 
|March 31, 2011         |  | $       | 3.20 |  |      | $ | 3.38 |     | 
|June 30, 2011          |  |         | 2.99 |  |      |   | 3.20 |     | 
|September 30, 2011     |  |         | 3.25 |  |      |   | 3.25 |     | 
|December 31, 2011      |  |         | 3.70 |  |      |   | 5.00 |     | 
|                       |  |         |      |  |      |   |      |     | 
|March 31, 2010         |  | $       | 2.13 |  |      | $ | 2.13 |     | 
|June 30, 2010          |  |         | 2.00 |  |      |   | 2.13 |     | 
|September 30, 2010     |  |         | 2.00 |  |      |   | 2.13 |     | 
|December 31, 2010      |  |         | 2.13 |  |      |   | 2.13 |     | 



Number of Shareholders and Total Outstanding
Shares



As of March 23, 2012
and December 31, 2011, there were 2,498,891 shares outstanding, 513,230 shares in treasury stock and a total of 3,012,121 shares
issued, held by approximately 51 shareholders of record.



As of March 23, 2011,
there were 2,571,918 shares of common stock issued and 2,048,688 shares of common stock outstanding after the Company's common
stock was forward split, 2 shares for each share issued, pursuant to written consent by a majority of the Company's shareholders.
All share references have been adjusted as if the split occurred prior to all periods presented.



Dividends on Common Stock



We have not previously
declared a cash dividend on our common stock and we do not anticipate the payment of dividends in the near future.



Options and Warrants



On January 6, 2011,
the Company filed a Form S-1 Registration Statement under the Securities Act of 1933. The Registration Statement was declared effective
on July 14, 2011 and registered one Class A Warrant and one Class B Warrant for each common share of the Company issued. The warrants
had a subscription price of $0.04 which entitled our shareholders to acquire one Class A Warrant, which entitled the holder to
acquire one share of our common stock for $2.75, and one Class B Warrant, which entitled the holder to acquire one share of our
common stock for $3.50. The warrants have a five year life. At December 31, 2011, the Company had issued and outstanding 2,194,509
Class A and Class B warrants. Proceeds from the offering are summarized as follows and are included in additional paid-in capital.



|Proceeds from sales of Class A and Class B warrants   |  | $ | 87,780  |  
|----------------------------------------------------- |  | - | ------- | -
|Legal and professional fees incurred for the offering |  |   | (67,172 | )
|Amount included in additional paid-in capital         |  | $ | 20,608  |  



8









On August 10, 2011,
the Company issued two warrants to the shareholder who collateralized the Company’s $2,000,000 line of credit. The first
warrant is for 200,000 shares exercisable at $2.75 per share for 10 years and the second warrant is for 250,000 shares exercisable
at $3.50 per share for 10 years. The warrants were valued using Black-Scholes at $906,351. This amount will be amortized to interest
expense over the ten year life of the warrants. At December 31, 2011, interest expense includes $35,247 in amortization.



On November 1, 2011,
the Company entered into an investor relations consulting agreement. In addition to cash compensation the consultant is entitled
to receive warrants for certain performance goals. These warrants will be accounted for when the goals are accomplished.



Securities Authorized for Issuance under
Equity Compensation Plans



None.



Recent Sales of Unregistered Securities



Sales of our common
stock during the first three quarters of the fiscal year were reported in Item 2 of Part II of the Form 10-Q filed for each quarter.
The Company issued 167 shares for $500 in cash during the fourth quarter of 2011. The shares were sold pursuant to an exemption
from registration under Section 4(2) promulgated under the Securities Act of 1933, as amended.



Repurchase of Equity Securities by the
Issuer and Affiliated Purchasers



None.



| | Item 6: | Selected Financial
Data
| | ------- | -----------------------



Not applicable.



| | Item 7: | Management’s
Discussion and Analysis of Financial Condition and Results of Operations
| | ------- | -------------------------------------------------------------------------------------



FORWARD-LOOKING STATEMENTS



Certain statements
contained in this report that are not historical fact are "forward-looking statements" as that term is defined in the
Private Securities Litigation Reform Act of 1995. The words or phrases "will likely result," "are expected to,"
"will continue," "is anticipated," "believes," "estimates," "projects" or similar
expressions are intended to identify these forward-looking statements. These statements are subject to risks and uncertainties
beyond our reasonable control that could cause our actual business and results of operations to differ materially from those reflected
in our forward-looking statements. The safe harbor provisions provided in the Securities Litigation Reform Act do not apply to
forward-looking statements we make in this report. Forward-looking statements are not guarantees of future performance. Our forward-looking
statements are based on trends which we anticipate in our industry and our good faith estimate of the effect on these trends of
such factors as industry capacity, product demand and product pricing. The inclusion of projections and other forward-looking statements
should not be regarded a representation by us or any other person that we will realize our projections or that any of the forward-looking
statements contained in this prospectus will prove to be accurate.



Management’s Analysis of Business



We have changed our
focus recently from managing investments to owning and operating Hooters franchises internationally.  Hooters restaurants
are casual beach-themed establishments with sports on television, jukebox music, and the “nearly world famous” Hooters
Girls.  The menu consists of spicy chicken wings, seafood, sandwiches and salads.  Each locations menu can
vary with the tastes of the locality it is in.  Hooters began in 1983 with its first restaurant in Clearwater, Florida.
From the original restaurant and licensee Mr. Robert Brooks, Hooters has become a global brand, with locations in 44 states domestically
and over 450 Hooters restaurants worldwide. Besides restaurants, Hooters has also branched out to other areas, including licensing
its name to a golf tour and the sale of packaged food in supermarkets.



9







We expect to either
own 100% of the Hooters franchise or partner with a local franchisee in the countries we target.   We based this
decision on what we believe to be the successful launch of our South African Hooters venture and believe we have aligned partners
and operators in various international markets. We are focused on expanding our Hooters operations, and expect to use substantially
all the net proceeds from the upcoming offering, in South Africa, Brazil, Hungary, Australia and Europe.



Accordingly, we operate
in two business segments; Hooters franchise restaurants and our legacy investment management and consulting services businesses.



LIQUIDITY AND CAPITAL RESOURCES AND
GOING CONCERN



Historical information:



At December 31, 2011
and 2010, the Company had current assets of $641,963 and $158,718; current liabilities of $3,720,486 and $645,634; and a working
capital deficit of $3,078,523 and $486,916, respectively. The Company incurred a loss of $1,162,714 during the year ended December
31, 2011 and had an unrealized loss from available-for-sale securities of $13,005 and foreign currency translation losses of $4,372,
resulting in a comprehensive loss of $1,180,091.



The Company's corporate
general and administrative expenses averaged approximately $295,000 per quarter during 2011. In the fourth quarter of 2011, $68,000
was added when we began consolidating the South African operations. The Company expects costs to increase as we expand our footprint
internationally in 2012. Effective October 1, 2011, the Company acquired majority control of the restaurants in South Africa and
began consolidating these operations. The Company also will share 49% of the profits in our Hooters location opened in January
2012 in Campbelltown, Australia, a suburb of Sydney.



In addition, the Company
has a note with a balance at December 31, 2011 of $242,964 owed to its bank which is due in August 2013 and a line of credit with
its bank with a balance at December 31, 2011 of $1,165,000 (total available $2,000,000) due on August 20, 2012. We also have convertible
notes payable with certain investors with a balance at December 31, 2011 of $1,625,000 due in the second quarter of 2012. The Company’s
South African subsidiaries have bank overdraft and term facilities of $593,928 which are in place as of the date of this 10-K/A
report. The Company plans to continue to use limited partnerships, if the Company’s contemplated raise is not completed or
not fully subscribed, to fund its share of costs for additional Hooters restaurants.



The Company expects
to meet its obligations in 2012 with some or all of the following:

| | · | File an S-1 Registration during the second quarter of 2012, and, assuming it becomes effective,
plans to raise up to $15,000,000 from the sale of common stock and warrant units;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | The Company received $100,000 in January 2012 as a fee for its CEO sitting on the Board of Hooters
of America and expect to continue to receive this fee for the next three years based on the current agreement;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Extend a portion of its existing line of credit;
| | - | ------------------------------------------------

| | · | Convert its convertible notes payable into common stock.
| | - | --------------------------------------------------------



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.



Evaluation of the amounts and certainty of cash flows:



The Company plans
to use the funding from the S-1 Registration to complete its expansion plans in South Africa, Brazil, Australia, Hungary and Europe.
The Company has used short-term financing to meet the preliminary requirements of its planned expansion, principally in South Africa
and Australia. If the Company is unable to obtain the funding from the S-1 Registration, the Company would be required to limit
its expansion plans. We would use limited partner funding and other sources of capital to the extent necessary to attempt to fund
as much of the planned expansion as possible. There can be no assurance that any of this funding will be available when needed.



10







Cash requirements and capital expenditures:



In 2012, we expect to open one restaurant
in each of the following countries – Australia (in addition to the one already opened in February 2012), Brazil, Hungary
and South Africa. The Company expects the total cash requirements for these restaurants to be approximately $3.1 million, of which
approximately $350,000 has been paid as of March 27, 2012.



In addition, we expect general and administrative
expenses to be approximately $1.3-$1.4 million for 2012.



Discussion and analysis of known trends and uncertainties:



The World economy has been in a state of
flux for some time with the debt problems of a number of countries in Europe, the recent recession in the United States, the significant
increase to debt in the United States compounded by continuing to give away more than can reasonably be collected, the slowing
economy in China and other factors. It is impossible to forecast what this will mean to our expansion plans in South Africa, Brazil,
Australia, Poland and Hungary. We feel that we minimize our risks through investment in different geographical areas.



Expected changes in the mix and relative cost of capital resources:



Since the middle of 2010, the Company has
utilized high cost capital to finance its international growth. The Company hopes to eliminate the majority of this debt with new
equity and further, to use this equity to complete its expansion plans over the next two years.



Other prospective sources for and uses of cash:



If the Company is unable to obtain the
funding from its Offering, it will seek other sources of interim funding to maintain its current operations and complete the restaurants
already underway.



If the above events do not occur or the
Company is unable to develop its business model, substantial doubt about the Company's ability to continue as a going concern exists.



RESULTS OF OPERATIONS



Revenue



Revenue amounted to
$1,476,649 in 2011 and $136,301 in 2010. Cash revenues were $493,167 and $980,247 in 2011 from the management and restaurant businesses,
respectively, and $84,218 in 2010 from the management business. The majority of our cash revenues in 2011 for the management business
was from a fee of $400,000 received in January 2011 for our services in facilitating the acquisition of HOA and TW and of $91,667
of the Company’s annual payment from HOA of $100,000, which is due in January each year while Mr. Pruitt serves on its board.  In
2010 cash revenues were management fees from Investors LLC and Investors II. Non-cash revenues in 2011 and 2010 of $3,235 and $52,083,
respectively were recognized from the receipt of securities for our services.



The fair value of
the equity instruments for management fees received was determined based upon the stock prices as of the date we reached an agreement
with the third party. The terms of the securities are not subject to adjustment after the measurement date. See Note 4 of the consolidated
financial statements for details.



Restaurant cost of sales



Restaurant cost of sales totaled $504,971,
or 51.5% of restaurant net sales. We expect the percentage to decrease as we open more stores in 2012 as we expand our business
in South Africa and other countries.



11







Restaurant operating expenses



Restaurant operating expenses totaled $598,225,
or 61.0% of restaurant net sales. We expect the percentage of operating expenses to restaurant net sales to decline as we open
more Hooters locations, however we have a limited history to be able to forecast a range.



General and Administrative Expense (“G&A”)



G&A amounted to
$1,249,749 in 2011 and $935,110 in 2010. The more significant components of G&A are summarized as follows:



|                                      |  | 2011 |           |  | 2010 |  
|------------------------------------- |  | ---- | --------- |  | ---- | -
|                                      |  |      |           |  |      |  
|Professional fees                     |  | $    | 104,016   |  |      | $
|Payroll and benefits                  |  |      | 563,323   |  |      |  
|Consulting and investor relation fees |  |      | 261,315   |  |      |  
|Travel and entertainment              |  |      | 84,767    |  |      |  
|Accounting and auditing               |  |      | 70,450    |  |      |  
|Director fees                         |  |      | -         |  |      |  
|Bad debt expense                      |  |      | 750       |  |      |  
|Other G&A                             |  |      | 165,128   |  |      |  
|                                      |  | $    | 1,249,749 |  |      | $



G&A costs are
expected to increase in 2012 to $325-$350,000 per quarter, with the costs associated with the activities of the restaurant business
continuing to grow. Revenue from the restaurants is expected to exceed this increase in expense.



Payroll and benefits
increased $45,161 in 2011 from 2010 primarily from the addition of restaurant management personnel in the fourth quarter of 2011.



Consulting and investor
relations fees increased $244,092 from 2011 to 2010 as the Company engaged experienced personnel to startup our European subsidiary
and to increase the Company’s recognition in the investment arena. Non-cash fees for services were $74,573 and $25,000 in
2011 and 2010, respectively.



Travel and entertainment
increased $41,817 as Company personnel, primarily the CEO, traveled to increase our company awareness and lockdown financing and
partners for the restaurant locales.



There were no director
fees in 2011. Effective December 31, 2010, the Company issued 20,000 shares of its common stock to its outside directors for current
and prior director fees. The stock was valued at $42,500 based on the closing price of the common stock on that date.



The Company recognized
a bad debt in the amount of $750 in 2011 and $24,907 in 2010. The amount in 2010 was for prior management services of $24,000 and
expense advances of $907 owed by Green St. Energy, Inc., a company for which the Company previously provided management services.



Asset Impairment



In 2010, the Company
recorded an impairment of $250,000 for our equity interest in BreezePlay as a result of it not being able to raise sufficient capital
to complete its business plan and substantially ceasing operation.



12







OTHER INCOME (EXPENSE)



Other income (expense)
consisted of the following at December 31, 2011 and 2010:



|                                                              |  | 2011 |          |   | 2010 |  
|------------------------------------------------------------- |  | ---- | -------- | - | ---- | -
|Other income (expense):                                       |  |      |          |   |      |  
|Equity in earnings (losses) of investments                    |  | $    | (76,113  | ) |      | $
|Realized gains from sale of investments                       |  |      | 94,353   |   |      |  
|Interest expense                                              |  |      | (183,467 | ) |      |  
|Interest income                                               |  |      | 4,541    |   |      |  
|Miscellaneous income                                          |  |      | 476      |   |      |  
|Other than temporary decline in available-for-sale securities |  |      | (147,973 | ) |      |  
|                                                              |  | $    | (308,183 | ) |      | $



Equity in Earnings of Investments



Equity in earnings
of investments includes our share of earnings from investments in which we own at least 20% and are being accounted for using the
equity method. This included losses from the Hoot Campbelltown and Hoot SA partnerships in 2011 of $66,857 and $9,256, respectively
and income from the Hoot SA partnerships in 2010 of $58,337.



Realized Gains from Sale of Investments



Realized gains are
recorded when investments are sold and include transactions in 2011 from a gain on sales of DineOut of $19,991 and a gain from
our Hooters South Africa interests of $74,362 and in 2010 from a gain on sales of DineOut of $157,807, a loss on sales of Vought
Defense Systems of $58,355 and a gain on sales of Healthsport of $6,583.



Interest Expense



Interest expense increased
by $43,451 in 2011 from 2010 primarily due to the addition in 2011 of a line of credit for $1,165,000 and convertible notes payable
in the amount of $1,625,000, offset by the conversion of $686,500 of convertible notes payable from 2010.



Interest Income



Interest income in
2011 decreased $41,459 as 2011 includes earnings from Investors for one month, compared to 2010 which includes our earnings from
Investors for the entire year.



Other than Temporary Decline in Available-for-Sale
Securities



The Company determined
that its investment in available-for-sale securities had an other than temporary decline in value and recorded a realized loss
in the amount of $147,973 and $40,386 in 2011 and 2010, respectively. Valuations were determined based on the quoted market price
for the stock when it was determined the decline was not temporary and the decline was recorded. In 2011, the Company recorded
an impairment of $147,973 primarily related to the Company’s investment in HiTech Stages ($124,573) and Efftec International
($22,500). In 2010, the Company recorded an impairment of $40,386 primarily related to the Company’s investment in Remodel
Auction ($39,100).



13







RECENT ACCOUNTING PRONOUNCEMENTS



There are several
new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) which are not yet effective.
Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe any of these
accounting pronouncements has had or will have a material impact on the Company’s financial position or operating results.
See Note 2 to the consolidated financial statements.



Critical
Accounting Policies



The SEC has suggested
companies provide additional disclosure and commentary on their most critical accounting policies, which they defined as the ones
that are most important to the portrayal of a company’s financial condition and operating results, and require management
to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently
uncertain. Based on this definition our most critical accounting policy is the valuation of our investments. The methods, estimates
and judgments we use in applying this accounting policy has a significant impact on the results we report in our financial statements.



Leases

Restaurant Operations
lease certain properties under operating leases. Many of these lease agreements contain rent holidays, rent escalation clauses
and/or contingent rent provisions. Rent expense is recognized on a straight-line basis over the expected lease term, including
cancelable option periods when failure to exercise such options would result in an economic penalty. We use a time period for straight-line
rent expense calculation that equals or exceeds the time period used for depreciation. In addition, the rent commencement date
of the lease term is the earlier of the date when they become legally obligated for the rent payments or the date when they take
access to the grounds for build out. Accounting for leases involves significant management judgment.



Investments

We determine fair
value to be the amount for which an investment could be exchanged in an orderly disposition over a reasonable period of time between
willing parties other than in a forced or liquidation sale. Our evaluation process is intended to provide a consistent basis for
determining the fair value of our available-for-sale investments. In summary, for individual securities classified as available-for-sale
securities, an enterprise shall determine whether a decline in fair value below the amortized cost basis is other than temporary.
If the decline in fair value is judged to be other than temporary, the individual security shall be written down to fair value
as a new cost basis and the amount of the write-down shall be included in earnings (accounted for as a realized loss). The new
cost basis shall not be changed for subsequent recoveries in fair value. Subsequent increases in the fair value of available-for-sale
securities shall be included in other comprehensive income and subsequent decreases in fair value, if not an other-than-temporary
impairment, also shall be included in other comprehensive income.



The first step in
the analysis is to determine if the security is impaired. All of our available-for-sale securities were listed and we use the closing
market price and other factors to determine the amount of impairment if any. The second step, if there is an impairment, is to
determine if the impairment is other than temporary. To determine if a decline in the value of an equity security is other than
temporary and that a write-down of the carrying value is required, we considered the following:



| | · | The length of time and the extent to which the market value has been less than the cost;
| | - | ----------------------------------------------------------------------------------------

| | · | The financial condition and near-term prospects of the issuer, including any specific events which
may influence the operations of the issuer such as changes in technology that may impair the earnings potential of the investment
or the discontinuance of a segment of the business that may affect the future earnings potential; or
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | The intent and ability of the holder to retain its investment in the issuer for a period of time
sufficient to allow for any anticipated recovery in market value.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



Unless evidence exists
to support a realizable value equal to or greater than the carrying value of the investment in equity securities classified as
available-for-sale, a write-down to fair value accounted for as a realized loss should be recorded. Such loss should be recognized
in the determination of net income of the period in which it occurs and the written down value of the investment in the issuer
becomes the new cost basis of the investment.



14







Investments in which
the Company has the ability to exercise significant influence and that, in general, are at least 20 percent owned are stated at
cost plus equity in undistributed net earnings (loss), less distributions received. The Company also has equity investments in
which it owns less than 20% which are stated at cost. An impairment loss would be recorded whenever a decline in the value of an
equity investment or investment carried at cost is below its carrying amount and is determined to be other than temporary. In judging
“other than temporary,” the Company considers the length of time and extent to which the fair value of the investment
has been less than the carrying amount of the investment, the near-term and long-term operating and financial prospects of the
investee, and the Company’s long-term intent of retaining the investment in the investee.



Intangible Assets



Goodwill



Goodwill represents
the excess of the purchase price of a business over the fair value of the identifiable net assets acquired. In accordance with
ASC Topic 350, goodwill and intangible assets with indefinite useful lives are not amortized, but are instead tested for impairment
at least annually or as circumstances indicate their value may no longer be recoverable.



The impairment test
for goodwill uses a two-step approach, which is performed at the reporting unit level.  Step one compares the fair value of
the reporting unit to its carrying value.  If the carrying value exceeds the fair value, there is a potential impairment and
step two must be performed.  Step two compares the carrying value of the reporting units’ goodwill to its implied fair
value (i.e. fair value of the reporting unit less the fair value of the units’ assets and liabilities, including identifiable
intangible assets).  If the carrying value of goodwill exceeds its implied fair value, the excess is required to be recorded
as impairment.



At December 31, 2011,
the Company performed an annual evaluation of its goodwill as required under ASC Topic 350. As a result of this evaluation, the
Company determined that no goodwill impairment was necessary, as the current performance and future expectations support the carrying
value of goodwill.



Franchise
Cost



Intangible assets
are recorded for the initial franchise fees for our restaurants. The Company amortizes these amounts over a 20 year periods, which
is the life of the franchise agreement.



COMMITMENTS AND CONTINGENCIES



Effective
August 1, 2010, the Company extended its office lease agreement for a period of one year at a monthly rental of $2,100, for its
office located at11220 Elm Lane, Suite 103, Charlotte, NC 28277. Since August 1, 2011, the lease has continued at the same
rate on a month-to-month basis.



The
Company leases the land and building for our four restaurants in South Africa through our subsidiaries. The leases are for five
year terms and include options to extend the terms. We lease our restaurant facilities under “triple net” leases that
require us to pay minimum rent, real estate taxes, maintenance costs and insurance premiums and, in some instances, percentage
rent based on sales in excess of specified amounts.



15







TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS



The following table
presents a summary of our contractual operating lease obligations and commitments as of December 31, 2011:



|Contractual Obligations         |  | Total |           |  | Less than 1 year |   |           | 1-3 years |  |   | 3-5 years |  |  | More than 5years |          
|------------------------------- |  | ----- | --------- |  | ---------------- | - | --------- | --------- |  | - | --------- |  |  | ---------------- | ---------
|Long-Term Debt Obligations (1)  |  | $     | 263,921   |  |                  | $ | 20,250    |           |  | $ | 243,671   |  |  | $                | -        
|Operating Lease Obligations (2) |  |       | 2,875,023 |  |                  |   | 579,250   |           |  |   | 1,277,264 |  |  |                  | 1,018,509
|Capital Lease Obligations (3)   |  |       | 150,093   |  |                  |   | 52,463    |           |  |   | 76,194    |  |  |                  | 21,436   
|Purchase Obligations (4)        |  |       | 550,000   |  |                  |   | 550,000   |           |  |   | -         |  |  |                  | -        
|Total                           |  | $     | 3,839,037 |  |                  | $ | 1,201,963 |           |  | $ | 1,597,129 |  |  | $                | 1,039,945



(1) Represents the outstanding principal amounts
and interest on all our long-term debt.

(2) Represents operating lease commitments for our
four Hooters restaurants in South Africa.

(3) Represents capital lease commitments on principal
and interest for three Hooters restaurants in South Africa.

(4) Represents commitments for Hooters international
restaurants in Australia



If the raise discussed
in Note 16, Subsequent Events, is successful, the Company plans to commit approximately $4,500,000 in Brazil and $3,400,000 in
South Africa for additional restaurant locations.



| | Item 7A: | Quantitative
and Qualitative Disclosures About Market Risk
| | -------- | ----------------------------------------------------------



Not applicable.



16







| | Item 8: | Financial
Statements and Supplementary Data
| | ------- | -------------------------------------------



CHANTICLEER HOLDINGS, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDTED FINANCIAL STATEMENTS



|                                                                                     | Page
|------------------------------------------------------------------------------------ | ----
|                                                                                     |     
|Report of Independent Registered Public Accounting Firms                             | 19  
|Consolidated Balance Sheets at December 31, 2011 and 2010                            | 21  
|Consolidated Statements of Operations for the Years Ended December 31, 2011 and 2010 | 22  
|Consolidated Statements of Stockholders’ Equity at December 31, 2011 and 2010        | 23  
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2011 and 2010 | 24  
|Notes to Consolidated Financial Statements                                           | 26  



17







CREASON & ASSOCIATES, P.L.L.C.

7170 S. Braden Ave., Suite 100

Tulsa, Oklahoma 74136



REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM



To the Audit Committee of

The Board of Directors and Stockholders of

Chanticleer Holdings, Inc.:



We have audited the accompanying
consolidated balance sheets of Chanticleer Holdings, Inc. and Subsidiaries (the "Company") as of December 31, 2011
and 2010, and the related consolidated statements of operations and comprehensive income, stockholders’ equity and cash
flows for the years ended December 31, 2011 and 2010. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our
audits. We did not audit the financial statements of Kiarabrite (Pty) Ltd, Dimaflo (Pty) Ltd, Tundraspex (Pty) Ltd, Civisign
(Pty) Ltd,  Dimalogix (Pty) Ltd and Chanticleer & Shaw Foods (Pty.) Ltd. (collectively referred to as the South Africa
Operations), wholly-owned and majority-owned subsidiaries, which statements reflect total assets and revenues constituting 45
percent and 66 percent, respectively, of the related consolidated totals. Those statements were audited by other auditors
whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the South Africa
Operations, is based solely on the report of the other auditors.



We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation.
We believe that our audits and the audit report of the other auditors provide a reasonable basis for our opinion.



As discussed in Note 17 to the consolidated
financial statements, the Company has restated its consolidated financial statements as of December 31, 2011, and for the year
then ended.



In our opinion, based on our audit and
the report of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Chanticleer Holdings, Inc. and Subsidiaries as of December 31, 2011 and 2010, and the consolidated
results of their operations and their cash flows for the years ended December 31, 2011 and 2010, in conformity with accounting
principles generally accepted in the United States of America.



The accompanying consolidated financial
statements have been prepared assuming that Chanticleer Holdings, Inc. and Subsidiaries will continue as a going concern. As discussed
in Note 1 to the consolidated financial statements, Chanticleer Holdings, Inc. has incurred substantial net losses and negative
cash flows from operations for the past several years, along with negative working capital. In addition, the Company has future
plans that may require substantial financial obligations. There can be no assurance that the Company will be able to generate sufficient
cash revenues to fund its current operations and fulfill its future commitments. These conditions raise substantial doubt about
Chanticleer Holdings, Inc. and Subsidiaries’ ability to continue as a going concern. Management’s plans regarding these
matters are also described in Note 1. The consolidated financial statements do not include any adjustments that may result from
the outcome of these uncertainties.



/s/ Creason & Associates, P.L.L.C.



Tulsa, Oklahoma

April 3. 2012 (Except for the effects
of the restatement 
as discussed in Note 17 to the consolidated financial 
statements, which are dated December 4, 2012)



18







REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM



To the Audit Committee of the

Board of Directors and Shareholders

Chanticleer Holdings, Inc.



We have audited the accompanying combined
balance sheet of South African Subsidiaries of Chanticleer Holdings, Inc.(the “Company”) as of December 31,
2011, and the related combined statements of operations, changes in equity and cash flows for the period from October 1, 2011 through
December 31, 2011. These financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these financial statements based on our audit.



We conducted our audit in accordance with
the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion.  An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We
believe that our audit provides a reasonable basis for our opinion.



In our opinion,
the financial statements referred to above present fairly, in all material respects, the financial position of South African Subsidiaries
of Chanticleer Holdings, Inc., as of December 31, 2011, and the results of its operations and its cash flows for the period from
October 1, 2011 through December 31, 2011 in conformity with accounting principles generally accepted in the United States of America.



/s/ Marcum llp



New York, NY

December 4, 2012



19







Chanticleer Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets

December 31, 2011 and 2010



|                                                                                                                                                                                                          |  | 2011             |            |   | 2010 |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ---------- | - | ---- | -
|                                                                                                                                                                                                          |  | (Restated)       |            |   |      |  
|                                                                                                                                                                                                          |  | (Notes 3 and 17) |            |   |      |  
|ASSETS                                                                                                                                                                                                    |  |                  |            |   |      |  
|Current assets:                                                                                                                                                                                           |  |                  |            |   |      |  
|Cash and cash equivalents                                                                                                                                                                                 |  | $                | 165,129    |   |      | $
|Accounts receivable                                                                                                                                                                                       |  |                  | 108,714    |   |      |  
|Other receivable                                                                                                                                                                                          |  |                  | 42,109     |   |      |  
|Inventory                                                                                                                                                                                                 |  |                  | 105,073    |   |      |  
|Due from related parties                                                                                                                                                                                  |  |                  | 76,591     |   |      |  
|Prepaid expenses                                                                                                                                                                                          |  |                  | 144,347    |   |      |  
|TOTAL CURRENT ASSETS                                                                                                                                                                                      |  |                  | 641,963    |   |      |  
|Property and equipment, net                                                                                                                                                                               |  |                  | 1,505,059  |   |      |  
|Goodwill                                                                                                                                                                                                  |  |                  | 396,487    |   |      |  
|Intangible assets, net                                                                                                                                                                                    |  |                  | 325,084    |   |      |  
|Investments at fair value                                                                                                                                                                                 |  |                  | 318,353    |   |      |  
|Other investments                                                                                                                                                                                         |  |                  | 1,582,148  |   |      |  
|Deposits and other assets                                                                                                                                                                                 |  |                  | 29,605     |   |      |  
|TOTAL ASSETS                                                                                                                                                                                              |  | $                | 4,798,699  |   |      | $
|                                                                                                                                                                                                          |  |                  |            |   |      |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                      |  |                  |            |   |      |  
|Current liabilities:                                                                                                                                                                                      |  |                  |            |   |      |  
|Current maturities of long-term debt and notes payable                                                                                                                                                    |  | $                | 1,171,855  |   |      | $
|Convertible notes payable                                                                                                                                                                                 |  |                  | 1,625,000  |   |      |  
|Accounts payable and accrued expenses                                                                                                                                                                     |  |                  | 478,005    |   |      |  
|Other current liabilities                                                                                                                                                                                 |  |                  | 330,607    |   |      |  
|Current maturities of capital leases payable                                                                                                                                                              |  |                  | 41,590     |   |      |  
|Deferred rent                                                                                                                                                                                             |  |                  | 43,225     |   |      |  
|Due to related parties                                                                                                                                                                                    |  |                  | 30,204     |   |      |  
|TOTAL CURRENT LIABILITIES                                                                                                                                                                                 |  |                  | 3,720,486  |   |      |  
|Capital leases payable, less current maturities                                                                                                                                                           |  |                  | 85,853     |   |      |  
|Deferred rent                                                                                                                                                                                             |  |                  | 7,162      |   |      |  
|Other liabilities                                                                                                                                                                                         |  |                  | 263,321    |   |      |  
|Long-term debt, less current maturities                                                                                                                                                                   |  |                  | 236,109    |   |      |  
|TOTAL LIABILITIES                                                                                                                                                                                         |  |                  | 4,312,931  |   |      |  
|Commitments and contingencies (Note 14)                                                                                                                                                                   |  |                  |            |   |      |  
|                                                                                                                                                                                                          |  |                  |            |   |      |  
|Stockholders' equity:                                                                                                                                                                                     |  |                  |            |   |      |  
|Common stock:  $0.0001 par value; authorized 200,000,000 shares; issued 3,012,121 shares and 2,571,918 shares; and outstanding 2,498,891 and 2,048,688 shares at December 31, 2011 and 2010, respectively |  |                  | 301        |   |      |  
|Additional paid in capital                                                                                                                                                                                |  |                  | 6,459,506  |   |      |  
|Other comprehensive income                                                                                                                                                                                |  |                  | 50,650     |   |      |  
|Non-controlling interest                                                                                                                                                                                  |  |                  | 593,863    |   |      |  
|Accumulated deficit                                                                                                                                                                                       |  |                  | (6,092,132 | ) |      |  
|Less treasury stock, 513,230 shares and 523,230 shares at                                                                                                                                                 |  |                  |            |   |      |  
|December 31, 2011 and 2010, respectively                                                                                                                                                                  |  |                  | (526,420   | ) |      |  
|                                                                                                                                                                                                          |  |                  | 485,768    |   |      |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                |  | $                | 4,798,699  |   |      | $



See accompanying notes to consolidated financial statements.



20







Chanticleer
Holdings, Inc. and Subsidiaries

Consolidated Statements of Operations

For the Years Ended December 31, 2011
and 2010



|                                                                                                   |  | 2011             |            |   | 2010 |  
|-------------------------------------------------------------------------------------------------- |  | ---------------- | ---------- | - | ---- | -
|                                                                                                   |  | (Restated)       |            |   |      |  
|                                                                                                   |  | (Notes 3 and 17) |            |   |      |  
|Revenue:                                                                                           |  |                  |            |   |      |  
|Restaurant sales, net                                                                              |  | $                | 980,247    |   |      | $
|Management fee income - non-affiliates                                                             |  |                  | 493,167    |   |      |  
|Management fee income - affiliates                                                                 |  |                  | 3,235      |   |      |  
|Total revenue                                                                                      |  |                  | 1,476,649  |   |      |  
|Expenses:                                                                                          |  |                  |            |   |      |  
|Restaurant cost of sales                                                                           |  |                  | 504,971    |   |      |  
|Restaurant operating expenses                                                                      |  |                  | 598,225    |   |      |  
|General and administrative expense                                                                 |  |                  | 1,249,749  |   |      |  
|Asset impairment                                                                                   |  |                  | -          |   |      |  
|Depreciation and amortization                                                                      |  |                  | 79,542     |   |      |  
|Total expenses                                                                                     |  |                  | 2,432,487  |   |      |  
|Loss from operations                                                                               |  |                  | (955,838   | ) |      |  
|Other income (expense)                                                                             |  |                  |            |   |      |  
|Equity in earnings (losses) of investments                                                         |  |                  | (76,113    | ) |      |  
|Realized gains from sales of investments                                                           |  |                  | 94,353     |   |      |  
|Interest income                                                                                    |  |                  | 4,541      |   |      |  
|Miscellaneous income                                                                               |  |                  | 476        |   |      |  
|Interest expense                                                                                   |  |                  | (183,467   | ) |      |  
|Other than temporary decline in available-for-sale securities                                      |  |                  | (147,973   | ) |      |  
|Total other income (expense)                                                                       |  |                  | (308,183   | ) |      |  
|Net loss before non-controlling interest                                                           |  |                  | (1,264,021 | ) |      |  
|Non-controlling interest                                                                           |  |                  | 101,307    |   |      |  
|Net loss                                                                                           |  |                  | (1,162,714 | ) |      |  
|Other comprehensive income (loss):                                                                 |  |                  |            |   |      |  
|Unrealized gain (loss) on available-for-sale securities (none applies to non-controlling interest) |  |                  | (13,005    | ) |      |  
|Foreign translation losses                                                                         |  |                  | (4,372     | ) |      |  
|Other comprehensive loss                                                                           |  | $                | (1,180,091 | ) |      | $
|                                                                                                   |  |                  |            |   |      |  
|Net earnings (loss) per share, basic and diluted                                                   |  | $                | (0.49      | ) |      | $
|Weighted average shares outstanding                                                                |  |                  | 2,370,036  |   |      |  



See accompanying notes to consolidated financial statements.



21







Chanticleer Holdings, Inc.
and Subsidiaries

Consolidated Statements of
Stockholders' Equity

Years ended December 31, 2011
(Restated) (Notes 3 and 17) and 2010



|                                                           |  |              |           |  |         |   |     |            |  |   | Accumulated   |  |  |             |         |   |          |   |          |       |  |   |            |  
|---------------------------------------------------------- |  | ------------ | --------- |  | ------- | - | --- | ---------- |  | - | ------------- |  |  | ----------- | ------- | - | -------- | - | -------- | ----- |  | - | ---------- | -
|                                                           |  |              |           |  |         |   |     |            |  |   | Other         |  |  |             |         |   |          |   |          |       |  |   |            |  
|                                                           |  |              |           |  |         |   |     | Additional |  |   | Comprehensive |  |  | Non-        |         |   |          |   |          |       |  |   |            |  
|                                                           |  | Common Stock |           |  | Paid-in |   |     | Income     |  |   | Controlling   |  |  | Accumulated |         |   | Treasury |   |          |       | 
|                                                           |  | Shares       |           |  | Par     |   |     | Capital    |  |   | (Loss)        |  |  | Interest    |         |   | Deficit  |   |          | Stock |  |   | Total      |  
|                                                           |  |              |           |  |         |   |     |            |  |   |               |  |  |             |         |   |          |   |          |       |  |   |            |  
|Balance, December 31, 2009                                 |  |              | 2,492,752 |  |         | $ | 250 |            |  | $ | 5,255,624     |  |  | $           | (84,000 | ) |          | $ | -        |       |  | $ | (3,917,853 | )
|Common stock issued for:                                   |  |              |           |  |         |   |     |            |  |   |               |  |  |             |         |   |          |   |          |       |  |   |            |  
|Consultants                                                |  |              | 15,572    |  |         |   | 1   |            |  |   | 24,999        |  |  |             | -       |   |          |   | -        |       |  |   | -          |  
|Amounts due related party                                  |  |              | 33,594    |  |         |   | 3   |            |  |   | 58,787        |  |  |             | -       |   |          |   | -        |       |  |   | -          |  
|Accounts payable                                           |  |              | 10,000    |  |         |   | 1   |            |  |   | 17,499        |  |  |             | -       |   |          |   | -        |       |  |   | -          |  
|Director fees                                              |  |              | 20,000    |  |         |   | 2   |            |  |   | 42,498        |  |  |             | -       |   |          |   | -        |       |  |   | -          |  
|Beneficial conversion feature of convertible notes payable |  |              | -         |  |         |   | -   |            |  |   | 56,660        |  |  |             | -       |   |          |   | -        |       |  |   | -          |  
|Available-for-sale securities                              |  |              | -         |  |         |   | -   |            |  |   | -             |  |  |             | 152,027 |   |          |   | -        |       |  |   | -          |  
|Purchase treasury stock                                    |  |              | -         |  |         |   | -   |            |  |   | -             |  |  |             | -       |   |          |   | -        |       |  |   | -          |  
|Non-controlling interest                                   |  |              | -         |  |         |   | -   |            |  |   | -             |  |  |             | -       |   |          |   | 42,528   |       |  |   | -          |  
|Net loss                                                   |  |              | -         |  |         |   | -   |            |  |   | -             |  |  |             | -       |   |          |   | (18,353  | )     |  |   | (1,011,565 | )
|                                                           |  |              |           |  |         |   |     |            |  |   |               |  |  |             |         |   |          |   |          |       |  |   |            |  
|Balance, December 31, 2010                                 |  |              | 2,571,918 |  |         |   | 257 |            |  |   | 5,456,067     |  |  |             | 68,027  |   |          |   | 24,175   |       |  |   | (4,929,418 | )
|Common stock issued for:                                   |  |              |           |  |         |   |     |            |  |   |               |  |  |             |         |   |          |   |          |       |  |   |            |  
|Convertible notes payable and accrued interest             |  |              | 412,286   |  |         |   | 41  |            |  |   | 731,046       |  |  |             | -       |   |          |   | -        |       |  |   | -          |  
|Services                                                   |  |              | 27,750    |  |         |   | 3   |            |  |   | 74,570        |  |  |             | -       |   |          |   | -        |       |  |   | -          |  
|Cash                                                       |  |              | 167       |  |         |   | -   |            |  |   | 500           |  |  |             | -       |   |          |   | -        |       |  |   | -          |  
|Available-for-sale securities contributed by CEO           |  |              | -         |  |         |   | -   |            |  |   | 125,331       |  |  |             | -       |   |          |   | -        |       |  |   | -          |  
|Warrants sold, net                                         |  |              | -         |  |         |   | -   |            |  |   | 20,608        |  |  |             | -       |   |          |   | -        |       |  |   | -          |  
|Amortize warrants                                          |  |              | -         |  |         |   | -   |            |  |   | 35,247        |  |  |             | -       |   |          |   | -        |       |  |   | -          |  
|Sell treasury stock                                        |  |              | -         |  |         |   | -   |            |  |   | 16,137        |  |  |             | -       |   |          |   | -        |       |  |   | -          |  
|Available-for-sale securities                              |  |              | -         |  |         |   | -   |            |  |   | -             |  |  |             | (13,005 | ) |          |   | -        |       |  |   | -          |  
|Non-controlling interest                                   |  |              | -         |  |         |   | -   |            |  |   | -             |  |  |             | -       |   |          |   | 670,995  |       |  |   | -          |  
|Foreign translation loss                                   |  |              | -         |  |         |   | -   |            |  |   | -             |  |  |             | (4,372  | ) |          |   | -        |       |  |   | -          |  
|Net loss                                                   |  |              | -         |  |         |   | -   |            |  |   | -             |  |  |             | -       |   |          |   | (101,307 | )     |  |   | (1,162,714 | )
|                                                           |  |              |           |  |         |   |     |            |  |   |               |  |  |             |         |   |          |   |          |       |  |   |            |  
|Balance, December 31, 2011                                 |  |              | 3,012,121 |  |         | $ | 301 |            |  | $ | 6,459,506     |  |  | $           | 50,650  |   |          | $ | 593,863  |       |  | $ | (6,092,132 | )



See accompanying notes to consolidated financial statements.



22







Chanticleer
Holdings, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2011
and 2010



|                                                                             |  | 2011             |            |   | 2010 |  
|---------------------------------------------------------------------------- |  | ---------------- | ---------- | - | ---- | -
|                                                                             |  | (Restated)       |            |   |      |  
|                                                                             |  | (Notes 3 and 17) |            |   |      |  
|Cash flows from operating activities:                                        |  |                  |            |   |      |  
|Net loss                                                                     |  | $                | (1,162,714 | ) |      | $
|Adjustments to reconcile net loss to net cash used in operating activities:  |  |                  |            |   |      |  
|Other than temporary decline in value of available-for-sale securities       |  |                  | 147,973    |   |      |  
|Bad debt expense - related party                                             |  |                  | 750        |   |      |  
|Non-controlling interest                                                     |  |                  | (101,307   | ) |      |  
|Consulting and other services rendered in exchange for investment securities |  |                  | (1,500     | ) |      |  
|Depreciation and amortization                                                |  |                  | 79,542     |   |      |  
|Equity in (earnings) loss of investments                                     |  |                  | 76,113     |   |      |  
|Asset impairment                                                             |  |                  | -          |   |      |  
|Common stock issued for services                                             |  |                  | 74,573     |   |      |  
|(Gain) loss on sale of investments                                           |  |                  | (94,353    | ) |      |  
|Beneficial converstion feature of convertible notes payable                  |  |                  | -          |   |      |  
|Revaluation of equity investment prior to acquisitions                       |  |                  | 74,362     |   |      |  
|Amortization of warrants                                                     |  |                  | 35,247     |   |      |  
|(Increase) decrease in amounts due from affiliate                            |  |                  | (54,217    | ) |      |  
|(Increase) decrease in accounts receivable                                   |  |                  | (81,528    | ) |      |  
|(Increase) decrease in other receivable                                      |  |                  | (42,109    | ) |      |  
|(Increase) decrease in prepaid expenses and other assets                     |  |                  | (58,690    | ) |      |  
|(Increase) decrease in inventory                                             |  |                  | (36,676    | ) |      |  
|Increase (decrease) in accounts payable and accrued expenses                 |  |                  | (30,701    | ) |      |  
|Increase (decrease) in deferred rent                                         |  |                  | 20,308     |   |      |  
|Increase (decrease) in deferred revenue                                      |  |                  | (1,750     | ) |      |  
|Advance from related parties for working capital                             |  |                  | -          |   |      |  
|Net cash used by operating activities                                        |  |                  | (1,156,677 | ) |      |  
|                                                                             |  |                  |            |   |      |  
|Cash flows from investing activities:                                        |  |                  |            |   |      |  
|Proceeds from sale of investments                                            |  |                  | 190,325    |   |      |  
|Investment distribution                                                      |  |                  | 8,140      |   |      |  
|Purchase of investments                                                      |  |                  | (1,502,247 | ) |      |  
|Franchise cost                                                               |  |                  | (75,000    | ) |      |  
|Purchase of property and equipment                                           |  |                  | (219,811   | ) |      |  
|Treasury stock proceeds (acquired)                                           |  |                  | 26,400     |   |      |  
|Deposit made for investment                                                  |  |                  | -          |   |      |  
|Net cash provided (used) by investing activities                             |  |                  | (1,572,193 | ) |      |  
|                                                                             |  |                  |            |   |      |  
|Cash flows from financing activities:                                        |  |                  |            |   |      |  
|Proceeds from sale of common stock                                           |  |                  | 500        |   |      |  
|Proceeds from sale of common stock warrants, net                             |  |                  | 20,608     |   |      |  
|Loan proceeds                                                                |  |                  | 2,790,000  |   |      |  
|Loan repayment                                                               |  |                  | (7,036     | ) |      |  
|Capital lease payments                                                       |  |                  | (13,970    | ) |      |  
|Other liabilities                                                            |  |                  | 62,262     |   |      |  
|Loans to related parties                                                     |  |                  | -          |   |      |  
|Loan from related party                                                      |  |                  | -          |   |      |  
|Net cash provided by financing activities                                    |  |                  | 2,852,364  |   |      |  
|Effect of exchange rate changes on cash                                      |  |                  | (4,372     | ) |      |  
|Net increase in cash and cash equivalents                                    |  |                  | 119,122    |   |      |  
|Cash and cash equivalents, beginning of year                                 |  |                  | 46,007     |   |      |  
|Cash and cash equivalents, end of year                                       |  | $                | 165,129    |   |      | $



See accompanying notes to consolidated financial statements.





23







Chanticleer
Holdings, Inc. and Subsidiaries

Consolidated Statements of Cash Flows,
continued

For the Years Ended December 31, 2011
and 2010





|                                                                                                  |  | 2011             |           |  | 2010 |  
|------------------------------------------------------------------------------------------------- |  | ---------------- | --------- |  | ---- | -
|                                                                                                  |  | (Restated)       |           |  |      |  
|                                                                                                  |  | (Notes 3 and 17) |           |  |      |  
|Supplemental cash flow information:                                                               |  |                  |           |  |      |  
|Cash paid for interest and income taxes:                                                          |  |                  |           |  |      |  
|Interest                                                                                          |  | $                | 101,479   |  |      | $
|Income taxes                                                                                      |  |                  | -         |  |      |  
|                                                                                                  |  |                  |           |  |      |  
|Non-cash investing and financing activities:                                                      |  |                  |           |  |      |  
|Common stock issued for amounts due related party                                                 |  | $                | -         |  |      | $
|Common stock issued for accounts payable                                                          |  |                  | -         |  |      |  
|Reclassification of investment accounted for under the cost method as available-for-sale security |  |                  | -         |  |      |  
|Due to related party exchanged for convertible note payable                                       |  |                  | 25,000    |  |      |  
|Convertible notes payable exchanged for common stock                                              |  |                  | 711,500   |  |      |  
|Accrued interest exchanged for common stock                                                       |  |                  | 10,000    |  |      |  
|Investment contributed by the Company's CEO                                                       |  |                  | 125,331   |  |      |  
|Common stock issued for prepaid consulting contract                                               |  |                  | 44,850    |  |      |  
|Acquisition of subsidiaries:                                                                      |  |                  |           |  |      |  
|Current assets, excluding cash and cash equivalents                                               |  | $                | 138,801   |  |      |  
|Property and equipment and intangible assets                                                      |  |                  | 1,985,799 |  |      |  
|Total assets excluding cash and cash equivalents                                                  |  |                  | 2,124,600 |  |      |  
|Liabilities assumed                                                                               |  |                  | 953,917   |  |      |  
|Non-controlling interest                                                                          |  |                  | 645,436   |  |      |  
|Prior investment of the Company                                                                   |  |                  | 320,247   |  |      |  
|                                                                                                  |  |                  | 1,919,600 |  |      |  
|Purchase price, net assets acquired - cash paid                                                   |  | $                | 205,000   |  |      |  





See accompanying notes to consolidated financial statements.



24







Chanticleer
Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements



| | 1. | Nature of Business
| | -- | ------------------



Organization



Chanticleer
Holdings, Inc. (the “Company”) was organized October 21, 1999, under its original name, Tulvine Systems, Inc., under
the laws of the State of Delaware. The Company previously had limited operations and was considered a development stage company
until July 2005. 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.



The consolidated
financial statements include the accounts of Chanticleer Holdings, Inc. and its subsidiaries, Chanticleer Advisors, LLC, (“Advisors”),
Avenel Ventures, LLC ("Ventures"), Avenel Financial Services, LLC ("AFS"), Chanticleer Holdings Limited ("CHL"),
Chanticleer Holdings Australia Pty, Ltd. (“CHA”), Chanticleer Investment Partners, LLC (“CIP”), DineOut
SA Ltd. ("DineOut”), Chanticleer and Shaw Foods (Pty) Ltd. (“C&S”), Kiarabrite (Pty) Ltd (“KPL”),
Dimaflo (Pty) Ltd (“DFLO”), Tundraspex (Pty) Ltd (“TPL”), Civisign (Pty) Ltd (“CPL”) and Dimalogix
(Pty) Ltd (“DLOG”) (collectively referred to as “the Company,” “we,” “us,” or “the
Companies”). All significant inter-company balances and transactions have been eliminated in consolidation.



Effective
March 23, 2011, the Company's common stock was forward split, 2 shares for each share issued, pursuant to written consent by a
majority of the Company's shareholders. All share references have been adjusted as if the split occurred prior to all periods presented.



Information regarding the Company's
subsidiaries is as follows:



| | · | Advisors was formed as a wholly owned Nevada Limited Liability Company on January 18, 2007 to manage
related companies, Chanticleer Investors, LLC ("Investors LLC"), Chanticleer Investors II, LLC ("Investors II")
and other investments owned by the Company;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Ventures was formed as a wholly owned Nevada Limited Liability Company on December 24, 2008 to
provide business management and consulting services to its clients;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | CHL was formed as a wholly owned Limited Liability Company in Jersey on March 24, 2009 to own the
Company's initial 50% interest in Hooters SA, GP, the general partner of the Hooters restaurant franchises in South Africa;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | CHA was formed on September 30, 2011 in Australia as a wholly owned subsidiary to invest in Hooters
restaurants in Australia;
| | - | -----------------------------------------------------------------------------------------------------------------------------



| | · | CIP was formed as a wholly owned North Carolina limited liability company on September 20, 2011.
CIP has not commenced business at December 31, 2011. CIP was formed to manage separate and customized investment accounts for investors.
The Company plans to register CIP as a registered investment advisor so that it can market openly to the public;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | DineOut was formed as a Private Limited Liability Company in England and Wales on October 29, 2009
to raise capital in Europe (the Company owns approximately 89% of DineOut at December 31, 2011);
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | KPL was formed on August 30, 2011 in South Africa to manage the Hooters restaurants in South Africa.
The Company owns 80% and local management owns 20% at December 31, 2011;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | C&S was formed in 2009 in South Africa, is owned 100% by the Company, and holds the Hooters
of America (“HOA”) franchise rights in South Africa;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------



| | · | DFLO was formed on August 16, 2011 in South Africa, is owned 52% by the Company and 48% by outside
investors at December 31, 2011, and owns the Hooters restaurant in Durban, South Africa;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



25







| | · | TPL was formed on August 18, 2011in South Africa, is owned 66% by the Company and 34% by outside
investors at December 31, 2011, and owns the Hooters restaurant in Johannesburg, South Africa;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | CPL was formed on August 29, 2011 in South Africa, is owned 60% by the Company and 40% by outside
investors at December 31, 2011 and owns the Hooters restaurant in Cape town, South Africa;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | DLOG was formed on August 27, 2011 in South Africa, is owned 100% by the Company at December 31,
2011 and owns the Hooters restaurant in the Emperor’s Palace in Johannesburg, South Africa; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | AFS was formed as a Nevada Limited Liability Company on February 19, 2009 to provide unique financial
services to the restaurant, real estate development, investment advisor/asset management and philanthropic organizations. AFS's
business operation was not activated and was discontinued in September 2011.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



GOING CONCERN (restated)



At December 31, 2011
and 2010, the Company had current assets of $641,963 and $158,718; current liabilities of $3,720,486 and $645,634; and a working
capital deficit of $3,078,523 and $486,916, respectively. The Company incurred a loss of $1,162,714 during the year ended December
31, 2011 and had an unrealized loss from available-for-sale securities of $13,005 and foreign currency translation losses of $4,372,
resulting in a comprehensive loss of $1,180,091.



The Company's corporate
general and administrative expenses averaged approximately $295,000 per quarter during 2011. In the fourth quarter of 2011, $68,000
was added when we began consolidating the South African operations. The Company expects costs to increase as we expand our footprint
internationally in 2012. Effective October 1, 2011, the Company acquired majority control of the restaurants in South Africa and
began consolidating these operations. The Company also will share 49% of the profits in our Hooters location opened in January
2012 in Campbelltown, Australia, a suburb of Sydney.



In addition, the Company
has a note with a balance at December 31, 2011 of $242,964 owed to its bank which is due in August 2013 and a line of credit with
its bank with a balance at December 31, 2011 of $1,165,000 (total available $2,000,000) due on August 20, 2012. We also have convertible
notes payable with certain investors with a balance at December 31, 2011 of $1,625,000 due in the second quarter of 2012. The Company’s
South African subsidiaries have bank overdraft and term facilities of $593,928. The Company plans to continue to use limited partnerships,
if the Company’s contemplated raise is not completed or not fully subscribed, to fund its share of costs for additional Hooters
restaurants.



The Company expects
to meet its obligations in 2012 with some or all of the following:

| | · | File an S-1 Registration during the second quarter of 2012, and, assuming it becomes effective,
plans to raise up to $15,000,000 from the sale of common stock and warrant units;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | The Company received $100,000 in January 2012 as a fee for its CEO sitting on the Board of Hooters
of America and expect to continue to receive this fee for the next three years based on the current agreement;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Extend a portion of its existing line of credit;
| | - | ------------------------------------------------

| | · | Convert its convertible notes payable into common stock.
| | - | --------------------------------------------------------



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.



26







| | 2. | SIGNIFICANT ACCOUNTING POLICIES
| | -- | -------------------------------



Use
of Estimates



The preparation
of financial statements in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant
estimates include the valuation of the investments in portfolio companies and deferred tax asset valuation allowances. Actual results
could differ from those estimates.



Cash
and Cash Equivalents



For purposes
of the statements of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents.



revenue
recognition



Restaurant Net Sales



We record
revenue from restaurant sales at the time of sale, net of discounts. Sales revenues are presented net of sales and value added
(VAT) taxes. Cost of sales primarily includes the cost of food, beverages, and merchandise and disposable paper and plastic goods
used in preparing and selling our menu items, and excludes depreciation and amortization.



Management Fee Income



The Company
receives revenue from management fees from both affiliated companies and non-affiliated companies. Our revenue recognition policy
provides that revenue is generally realized or realizable and earned when all of the following criteria have been met:

| | · | Persuasive evidence of an arrangement exists;
| | - | ---------------------------------------------

| | · | Delivery has occurred or services have been rendered;
| | - | -----------------------------------------------------

| | · | The seller's price to the buyer is fixed or determinable; and
| | - | -------------------------------------------------------------

| | · | Collectability is reasonably assured.
| | - | -------------------------------------



We may collect
revenue in both cash and in the equity securities of the company to whom we are providing services. Typically when we are paid
cash for services, it is based on a monthly fee and is recorded when earned. When we receive equity securities for our management
services, we generally receive the securities in advance for our services to be earned over the life of the contract, generally
one year. We value these securities and defer recognition of the revenue over the life of the management contract.



The fair
value of the equity instruments received was determined based upon the stock prices as of the date we reached an agreement with
the third party and is not subject to adjustment after the measurement date.



ACCOUNTS RECEIVABLE



The Company
monitors its exposure for credit losses on its receivable balances and the credit worthiness of its receivables on an ongoing basis
and records related allowances for doubtful accounts. Allowances are estimated based upon specific customer balances, where a risk
of default has been identified, and also include a provision for non-customer specific defaults based upon historical experience.
As of December 31, 2011 and December 31, 2010, the Company has not recorded an allowance for doubtful accounts. If circumstances
related to specific customers change, estimates of the recoverability of receivables could also change.



INVENTORIES



Inventories
are valued at the lower of cost (first-in, first-out method) or market, and consist primarily of restaurant food items and supply
inventory.



27







OPERATING LEASES



The Company
leases certain property under operating leases. Many of these lease agreements contain rent holidays, rent escalation clauses and/or
contingent rent provisions. Rent expense is recognized on a straight-line basis over the expected lease term, including cancelable
option periods when failure to exercise such options would result in an economic penalty. In addition, the rent commencement date
of the lease term is the earlier of the date when we become legally obligated for the rent payments or the date when we take access
to the property or the grounds for build out.



MARKETABLE EQUITY SECURITIES



Trading securities



The Company's
investment in marketable equity securities are carried at fair value and are classified as current assets in the consolidated balance
sheets. Unrealized gains and losses, net of tax, are reported in the statement of operations as unrealized gain (loss) on marketable
equity securities. Gains and losses are reported in the consolidated statements of operations when realized, based on the disposition
of specifically identified investments, using a first-in, first-out method.



Available-for-sale securities



The Company’s
investments in marketable equity securities which are classified as available-for-sale are carried at fair value. Investments available
for current operations are classified in the consolidated balance sheets as current assets; investments held for long-term purposes
are classified as non-current assets. Unrealized gains and losses, net of tax, are reported in other comprehensive income as a
separate component of stockholders’ equity. Gains and losses are reported in the consolidated statements of operations when
realized, determined based on the disposition of specifically identified investments, using a first-in, first-out method.



Investments
identified by the Company as being potentially impaired are subject to further analysis to determine if the impairment is other
than temporary. Other than temporary declines in market value from original costs are charged to investment and other income, net,
in the period in which the loss occurs. In determining whether investment holdings are other than temporarily impaired, the Company
considers the nature, cause, severity and duration of the impairment.



OTHER INVESTMENTS



Investments
in which the Company has the ability to exercise significant influence and that, in general, are at least 20 percent owned are
stated at cost plus equity in undistributed net earnings (loss), less distributions received. The Company also has equity investments
in which it owns less than 20% which are stated at cost. An impairment loss would be recorded whenever a decline in the value of
an equity investment or cost investment is below its carrying amount and is determined to be other than temporary. In judging “other
than temporary,” the Company considers the length of time and extent to which the fair value of the investment has been less
than the carrying amount of the investment, the near-term and long-term operating and financial prospects of the investee, and
the Company’s long-term intent of retaining the investment in the investee.



FAIR VALUE MEASUREMENTS



For financial
assets and liabilities measured at fair value on a recurring basis, fair value is the price we would receive to sell an asset or
pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active
markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data
and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical
transaction that occurs at the measurement date.



28







Observable
inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference
is given to observable inputs. These two types of inputs create the following fair value hierarchy:



| | Level 1 | Quoted prices for identical instruments in active markets.
| | ------- | ----------------------------------------------------------

| | Level 2 | Quoted prices for similar instruments in active markets;
quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are
observable or whose significant value drivers are observable.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Level 3 | Significant inputs to the valuation model are unobservable.
| | ------- | -----------------------------------------------------------



We maintain
policies and procedures to value instruments using the best and most relevant data available. Our investment committee reviews
and approves all investment valuations.



Our available-for-sale
equity securities are all valued using Level 1 inputs or Level 2 inputs.



fair
value of financial instruments



The Company
is required to disclose fair value information about financial instruments when it is practicable to estimate that value. The carrying
amounts of the Company’s cash, accounts receivable, inventory, accounts payable, accrued expenses, other current liabilities,
convertible notes payable and notes payable approximate their estimated fair value due to the short-term maturities of these financial
instruments and because related interest rates offered to the Company approximate current rates.



fixed
assets



Fixed assets
are stated at cost, less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful
lives of the respective assets (generally five and seven years). The carrying amount of all long-lived assets is evaluated periodically
to determine if adjustment to the depreciation and amortization period or the unamortized balance is warranted. Based upon its
most recent analysis, the Company believes that no impairment of property and equipment exists at December 31, 2011 and 2010. Maintenance
and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When property and equipment are
sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss
is included in operations.



InTANGIBLE
ASSETS



Goodwill



Goodwill
represents the excess of the purchase price of a business over the fair value of the identifiable net assets acquired. In accordance
with ASC Topic 350, goodwill and intangible assets with indefinite useful lives are not amortized, but are instead tested for impairment
at least annually or as circumstances indicate their value may no longer be recoverable.



The impairment
test for goodwill uses a two-step approach, which is performed at the reporting unit level.  Step one compares the fair value
of the reporting unit to its carrying value.  If the carrying value exceeds the fair value, there is a potential impairment
and step two must be performed.  Step two compares the carrying value of the reporting units’ goodwill to its implied
fair value (i.e. fair value of the reporting unit less the fair value of the units’ assets and liabilities, including identifiable
intangible assets).  If the carrying value of goodwill exceeds its implied fair value, the excess is required to be recorded
as impairment.



At December
31, 2011, the Company performed an annual evaluation of its goodwill as required under ASC Topic 350. As a result of this evaluation,
the Company determined that no goodwill impairment was necessary, as the current performance and future expectations support the
carrying value of goodwill.



29







Franchise
Cost



Intangible
assets are recorded for the initial franchise fees for our restaurants. The Company amortizes these amounts over a 20 year periods,
which is the life of the franchise agreement.



Income
Taxes



Deferred
income taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences
and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred
tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion
or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes
in tax laws and rates on the date of enactment. The Company has provided a valuation allowance for the full amount of the deferred
tax assets.



As of December
31, 2011 and 2010 the Company had no accrued interest or penalties relating to any tax obligations. The Company currently has no
federal or state examinations in progress, nor has it had any federal or state tax examinations since its inception. The last three
years of the Company's tax years are subject to federal and state tax examination.



Stock-based
Compensation



The compensation
cost relating to share-based payment transactions (including the cost of all employee stock options) is required to be recognized
in the financial statements. That cost is measured based on the estimated fair value of the equity or liability instruments issued.
A wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards,
share appreciation rights and employee share purchase plans are included. The Company’s financial statements would include
an expense for all share-based compensation arrangements granted on or after January 1, 2006 and for any such arrangements that
are modified, cancelled or repurchased after that date based on the grant-date estimated fair value.



As of December
31, 2011 and 2010, there were no options outstanding. See Note 11 regarding outstanding warrants.



EARNINGS (LOSS) PER COMMON SHARE



The Company
is required to report both basic earnings per share, which is based on the weighted-average number of common shares outstanding,
and diluted earnings per share, which is based on the weighted-average number of common shares outstanding plus all potentially
dilutive shares outstanding. At December 31, 2011 and 2010, there are no potentially dilutive shares outstanding. Accordingly,
no common stock equivalents are included in the earnings (loss) per share calculations and basic and diluted earnings per share
are the same for all periods presented.



FOREIGN CURRENCY TRANSLATION



Adjustments
resulting from the process of translating foreign functional currency financial statements into U.S. dollars are included in accumulated
other comprehensive income in common stockholders’ equity. Foreign currency transaction gains and losses are included in
current earnings. Most of our foreign operations use their local currency as the functional currency.



Comprehensive
Income



Standards
for reporting and displaying comprehensive income and its components (revenues, expenses, gains and losses) in a full set of general-purpose
financial statements requires that all items that are required to be recognized under accounting standards as components of comprehensive
income be reported in a financial statement that is displayed with the same prominence as other financial statements. We are required
to (a) classify items of other comprehensive income by their nature in financial statements, and (b) display the accumulated balance
of other comprehensive income separately in the equity section of the balance sheet for all periods presented.



30







concentration
of credit risk



Cash is
maintained at financial institutions, which at times, may exceed the FDIC insurance limit.



RECLASSIFICATIONS



Certain
reclassifications have been made in the financial statements at December 31, 2010 and for the periods then ended to conform to
the December 31, 2011 presentation. The reclassifications had no effect on net loss.



Recent
Accounting Pronouncements



There are
several new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) which are not yet
effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. At March 30, 2012, none of
these pronouncements are expected to have a material effect on the financial position, results of operations or cash flows of the
Company.



| | 3. | ACQUISITION OF MAJORITY OWNED HOOTERS RESTAURANTS
(Restated Note   17)
| | -- | ----------------------------------------------------------------------



Effective
October 1, 2011, the Company acquired majority ownership of a management company, a company that owns the HOA franchise
rights for the territory of South Africa, and four Hooters restaurants in South Africa. Previously, the Company owned a
minority interest in the restaurants and was not in control and these operations were accounted for using the equity method
of accounting. New entities were formed for the operations and the Company’s ownership is as follows: KPL 80%, DFLO
52%, TPL 66%, CPL 60%, C&S 100% and DLOG 100%. The restaurant owned by DFLO in Durban opened in January 2010, the
restaurant owned by TPL in Johannesburg opened in June 2010 and the restaurant owned by CPL in Cape Town opened in June 2011.
The restaurant owned by DLOG opened in February 2012.



The acquisition
was accounted for using the purchase method of accounting and, accordingly, the consolidated statements of operations include the
results of the South African operations beginning October 1, 2011. The assets acquired and the liabilities assumed were recorded
at estimated fair values as determined by the Company’s management based on information currently available and on current
assumptions as to future operations. A summary of the estimated fair value of assets acquired and liabilities assumed in the acquisition
follows:



|                                                    |  | (Restated) |          
|--------------------------------------------------- |  | ---------- | ---------
|Current assets, excluding cash and cash equivalents |  | $          | 138,801  
|Property and equipment and intangible assets        |  |            | 1,985,799
|Total assets excluding cash and cash equivalents    |  | $          | 2,124,600
|Liabilities assumed                                 |  |            | 953,917  
|Non-controlling interest                            |  |            | 645,436  
|Prior investment of the Company                     |  |            | 320,247  
|Purchase price (net assets acquired)                |  | $          | 205,000  
|Cash paid                                           |  | $          | 205,000  



Liabilities
assumed includes $593,928 at December 31, 2011 and $531,666 at September 30, 2011 in bank debt of the prior entities which the
Company has agreed to repay without interest upon completion of its new financing. The $593,928 at December 31, 2011 is included
in other liabilities.



31







Unaudited
pro forma results of operations for the two years ended December 31, 2011 and 2010, as if the Company had acquired majority ownership
of the South African Hooters restaurants on January 1, 2010 is as follows. The pro forma results include estimates and assumptions
which management believes are reasonable. However, pro forma results are not necessarily indicative of the results that would have
occurred if the business combination had been in effect on the dates indicated, or which may result in the future.



|                                                 |  | 2011 |            |   | 2010 |  
|------------------------------------------------ |  | ---- | ---------- | - | ---- | -
|                                                 |  |      |            |   |      |  
|Net revenues                                     |  | $    | 4,840,914  |   |      | $
|Net earnings (loss)                              |  | $    | (1,031,135 | ) |      | $
|Net earnings (loss) per share, basic and diluted |  | $    | (0.44      | ) |      | $



| | 4. | INVESTMENTS
| | -- | -----------



INVESTMENTS AT FAIR VALUE CONSIST OF
THE FOLLOWING AT DECEMBER 31, 2011 AND 2010



|                                             |  | 2011 |         |  | 2010 |  
|-------------------------------------------- |  | ---- | ------- |  | ---- | -
|                                             |  |      |         |  |      |  
|Available-for-sale investments at fair value |  | $    | 318,353 |  |      | $
|Trading securities                           |  |      | -       |  |      |  
|Total                                        |  | $    | 318,353 |  |      | $



TRADING SECURITIES:

The Company had no
transactions in trading securities during 2011. The following table summarizes the activity during 2010.



|                                         |  | 2010 |        
|---------------------------------------- |  | ---- | -------
|                                         |  |      |        
|Balance, beginning of year               |  | $    | -      
|Shares acquired from a related party     |  |      | 26,334 
|Cost of securities sold                  |  |      | (26,334
|Balance, end of year                     |  | $    | -      
|                                         |  |      |        
|Proceeds from sale of trading securities |  | $    | 32,917 
|Gain from sale of trading securities     |  | $    | 6,583  



32







AVAILABLE-FOR-SALE
SECURITIES



Activity in our available-for-sale
securities may be summarized as follows:

|                                                           |  | 2011 |          |   | 2010 |  
|---------------------------------------------------------- |  | ---- | -------- | - | ---- | -
|                                                           |  |      |          |   |      |  
|Cost at beginning of year                                  |  | $    | 284,473  |   |      | $
|Contributed to the Company by it's CEO                     |  |      | 125,331  |   |      |  
|Transfer from investments accounted for by the cost method |  |      | -        |   |      |  
|Received as management fees                                |  |      | 1,500    |   |      |  
|Acquired in exchange for DineOut shares                    |  |      | -        |   |      |  
|Proceeds from sale of securities                           |  |      | -        |   |      |  
|Realized loss from sale of securities                      |  |      | -        |   |      |  
|Other than temporary loss in available-for-sale securities |  |      | (147,973 | ) |      |  
|Cost at end of year                                        |  |      | 263,331  |   |      |  
|Unrealized gain (loss)                                     |  |      | 55,022   |   |      |  
|Total                                                      |  | $    | 318,353  |   |      | $



Our available-for-sale securities consist
of the following:



|                                       |  |      |         |  | Unrecognized   |   |         |       |  |   | Realized |  |  | Loss |         
|-------------------------------------- |  | ---- | ------- |  | -------------- | - | ------- | ----- |  | - | -------- |  |  | ---- | --------
|                                       |  |      |         |  | Holding        |   |         | Fair  |  |   | Holding  |  |  | on   |         
|                                       |  | Cost |         |  | Gains (Losses) |   |         | Value |  |   | Loss     |  |  | Sale |         
|December 31, 2011                      |  |      |         |  |                |   |         |       |  |   |          |  |  |      |         
|Remodel Auction *                      |  | $    | -       |  |                | $ | -       |       |  | $ | -        |  |  | $    | (900    
|North Carolina Natural Energy *        |  |      | 1,500   |  |                |   | -       |       |  |   | 1,500    |  |  |      | -       
|North American Energy                  |  |      | 126,000 |  |                |   | (42,000 | )     |  |   | 84,000   |  |  |      | -       
|North American Energy *                |  |      | 10,500  |  |                |   | 7,500   |       |  |   | 18,000   |  |  |      | -       
|North American Energy                  |  |      | 125,331 |  |                |   | 89,522  |       |  |   | 214,853  |  |  |      | -       
|Efftec International, Inc. *           |  |      | -       |  |                |   | -       |       |  |   | -        |  |  |      | (22,500 
|HiTech Stages                          |  |      | -       |  |                |   | -       |       |  |   | -        |  |  |      | (124,573
|                                       |  | $    | 263,331 |  |                | $ | 55,022  |       |  | $ | 318,353  |  |  | $    | (147,973
|                                       |  |      |         |  |                |   |         |       |  |   |          |  |  |      |         
|December 31, 2010                      |  |      |         |  |                |   |         |       |  |   |          |  |  |      |         
|Syzygy Entertainment, Ltd. *           |  | $    | -       |  |                | $ | -       |       |  | $ | -        |  |  | $    | (1,286  
|Remodel Auction *                      |  |      | 900     |  |                |   | 100     |       |  |   | 1,000    |  |  |      | (39,100 
|North American Energy                  |  |      | 126,000 |  |                |   | (98,000 | )     |  |   | 28,000   |  |  |      | -       
|North American Energy *                |  |      | 10,500  |  |                |   | (4,500  | )     |  |   | 6,000    |  |  |      | -       
|Efftec International, Inc. *           |  |      | 22,500  |  |                |   | 22,500  |       |  |   | 45,000   |  |  |      | -       
|Efftec International, Inc. (warrant) * |  |      | -       |  |                |   | 22,500  |       |  |   | 22,500   |  |  |      | -       
|Vought Defense System Corp.            |  |      | -       |  |                |   | -       |       |  |   | -        |  |  |      | -       
|HiTech Stages                          |  |      | 124,573 |  |                |   | 125,427 |       |  |   | 250,000  |  |  |      | -       
|                                       |  | $    | 284,473 |  |                | $ | 68,027  |       |  | $ | 352,500  |  |  | $    | (40,386 



* Investments acquired in exchange for management services.



Syzygy Entertainment,
Ltd. (“Syzygy”) – During 2007, the Company acquired 342,814 shares of Syzygy for management services and
Mr. Pruitt contributed an additional 300,000 shares to the Company. The shares had an initial cost of $1,114,221 which has now
been fully impaired.



Remodel Auction
Incorporated (“REMC”) –During 2009, the Company acquired 334 shares of REMC for management services with
an initial cost of $275,000 which has now been fully impaired.



33







North Carolina
Natural Energy, Inc. (“NCNE”) – NCNE is a successor to REMC whose business was discontinued. NCNE has plans
to become involved in some form of natural energy. The Company received 100,000,000 shares of NCNE (less than 1% on a fully diluted
basis) for management services during 2011. The shares were valued at $1,500 based on NCNE’s valuation as a shell.



North American
Energy Resources, Inc. - During the quarter ended June 30, 2009, the Company exchanged its oil & gas property investments
for 700,000 shares of North American Energy Resources, Inc. ("NAEY") which were valued at $126,000 based on the closing
price of NAEY on the date of the trade. At December 31, 2011 and 2010, the stock was $0.12 and $0.04 per share and the Company
recorded an unrealized loss of $42,000 and $98,000, respectively, based on the Company's determination that the price decline was
temporary.



During the first quarter
of 2010, the Company received an additional 150,000 shares of NAEY in exchange for management services. The shares were initially
valued at $10,500, based on the trading price at the time. At December 31, 2010, the Company recorded an unrealized loss of $4,500
based on the market value of $6,000 at December 31, 2010. At December 31, 2011, the shares were valued at $18,000 and the Company
recorded unrealized appreciation of $7,500.



During June 2011,
the Company’s CEO contributed 1,790,440 shares of NAEY to the Company which was valued at $125,331 based on the trading price
at the time. Mr. Pruitt did not receive additional compensation as a result of the transfer. At December 31, 2011, the Company
recorded unrealized appreciation of $89,522 based on a market value of $214,853.



NAEY appointed a new
management team in December 2010 and they are seeking acquisition opportunities for onshore and offshore oil and gas properties.
Accordingly, the Company determined that any decline was temporary.



Vought Defense
Systems Corp. (“VDSC”) – Initially the Company invested $100,000 for debt with a face value of $1,177,395
of Lifestyle Innovations, Inc. After VDSC was acquired by the company in 2010, we converted our debt into 449,959 shares of VDSC
which were sold during 2010 for $41,645, resulting in a loss of $58,355.



EffTec International,
Inc. -Effective April 1, 2010, the Company's CEO became a director and the CEO of EffTec International, Inc. The Company received
150,000 shares of EffTec and an option to acquire an additional 150,000 shares at $0.15 per share in exchange for the management
services to be provided. The shares were valued at $22,500 based on the trading price of EffTec at the date of the transaction.
At December 31, 2010, the shares were valued at $0.30 per share and the $22,500 increase in value plus the value of the option
of $22,500 was included in accumulated other comprehensive income (loss). At September 30, 2011, the market value of the Efftec
stock dropped to less than $0.01 per share and the Company determined the reduction was other than temporary and impaired its investment
to zero.



EffTec developed an
Internet-based chiller tool called EffTrackTM that: collects, stores and analyzes chiller operating data, calculates and trends
chiller performance, diagnoses the cause of chiller inefficiencies, notifies plant contacts when problems occur, recommends corrective
actions, measures the results of corrective actions and provides cost analysis of operational improvements.



HiTech Stages,
Ltd. (“HiTech”) – The Company originally acquired 275,000 shares of HiTech in exchange for 150,450
shares of DineOut during the June 2010 quarter. HiTech was unable to raise sufficient capital to fund its business plan and the
stock price dropped to near zero at September 30, 2011. The Company determined the decline was other than temporary and fully impaired
its investment on September 30, 2011.



OTHER INVESTMENTS ARE SUMMARIZED AS
FOLLOWS AT DECEMBER 31, 2011 AND 2010.



|                                                  |  | 2011 |           |  | 2010 |  
|------------------------------------------------- |  | ---- | --------- |  | ---- | -
|                                                  |  |      |           |  |      |  
|Investments accounted for under the equity method |  | $    | 815,550   |  |      | $
|Investments accounted for under the cost method   |  |      | 766,598   |  |      |  
|Total                                             |  | $    | 1,582,148 |  |      | $



34







INVESTMENTS ACCOUNTED FOR USING THE
EQUITY METHOD



Activity in investments
accounted for using the equity method is summarized as follows.



|                           |  | 2011 |         |   | 2010 |  
|-------------------------- |  | ---- | ------- | - | ---- | -
|                           |  |      |         |   |      |  
|Balance, beginning of year |  | $    | 87,200  |   |      | $
|Equity in earnings (loss)  |  |      | (76,113 | ) |      |  
|New investments            |  |      | 812,604 |   |      |  
|Sale of investment         |  |      | -       |   |      |  
|Distributions received     |  |      | (8,141  | ) |      |  
|Balance, end of year       |  | $    | 815,550 |   |      | $



Equity investments consist of the following
at December 31, 2011 and December 31, 2010:



|                                                  |  | 2011 |         |  | 2010 |  
|------------------------------------------------- |  | ---- | ------- |  | ---- | -
|Carrying value:                                   |  |      |         |  |      |  
|Hoot SA I, II, III - South Africa                 |  | $    | 143,274 |  |      | $
|Hoot Campbelltown Pty. Ltd. (49%) - Australia     |  |      | 570,134 |  |      |  
|Hoot Surfers Paradise Pty. Ltd. (49%) - Australia |  |      | 102,041 |  |      |  
|Brazil                                            |  |      | 101     |  |      |  
|                                                  |  | $    | 815,550 |  |      | $



Equity in earnings
(loss) and distributions from equity investments during the year ended December, 2011 and 2010 follows. The activity from the South
African restaurants is through September 30, 2011 at which time the Company acquired majority ownership and began consolidating
these operations.



|                           |  | 2011 |         |   | 2010 |  
|-------------------------- |  | ---- | ------- | - | ---- | -
|Equity in earnings (loss): |  |      |         |   |      |  
|Hoot S.A. I, II, III       |  |      | (9,256  | ) |      |  
|Hoot Campbelltown (49%)    |  |      | (66,857 | ) |      |  
|                           |  | $    | (76,113 | ) |      | $
|Distributions:             |  |      |         |   |      |  
|Hoot S.A. I, LLC (20%)     |  |      | 6,248   |   |      |  
|Hoot S.A. II, LLC (20%)    |  |      | 1,893   |   |      |  
|                           |  | $    | 8,141   |   |      | $



The summarized unaudited
financial data for the South African operations of which we owned 20% at December 31, 2010 follows. The Company acquired majority
ownership effective September 30, 2011, accordingly, the amounts in 2011 are for only nine months. In addition, the restaurant
at the Hoot Campbelltown location incurred a loss for certain pre-opening expenses before it opened in January 2012, our share
of which is included above.



|                                  |  | 2011 |           |  | 2010 |  
|--------------------------------- |  | ---- | --------- |  | ---- | -
|                                  |  |      |           |  |      |  
|Revenue                           |  | $    | 3,364,265 |  |      | $
|Gross profit                      |  |      | 2,122,073 |  |      |  
|Income from continuing operations |  |      | 131,949   |  |      |  
|Net income                        |  |      | 131,949   |  |      |  



35







The summarized balance
sheets for the two locations in Australia of which we owned 49% at December 31, 2011 and the Hoot SA limited partnerships of which
we owned 20% at December 31, 2010 follows:



|                                       |  | 2011 |           |  | 2010 |  
|-------------------------------------- |  | ---- | --------- |  | ---- | -
|ASSETS                                 |  |      |           |  |      |  
|Current assets                         |  | $    | 58,975    |  |      | $
|Non-current assets                     |  |      | 1,646,508 |  |      |  
|TOTAL ASSETS                           |  | $    | 1,705,483 |  |      | $
|LIABILITIES                            |  |      |           |  |      |  
|Current liabilities                    |  | $    | 76,035    |  |      | $
|PARTNER'S EQUITY                       |  |      | 1,629,448 |  |      |  
|TOTAL LIABILITIES AND PARTNERS' EQUITY |  | $    | 1,705,483 |  |      | $



Hooters S.A., GP
-The Company formed CHL to own the Company's 50% general partner interest in Hooters S.A., GP, the general partner of the
Hooters' restaurant franchises in South Africa. The initial restaurant opened in December 2009 in Durban, South Africa and operations
commenced in January 2010. In the initial restaurant CHL had a 10% interest in restaurant cash flows until the limited partners
receive payout and a 40% interest in restaurant cash flows after limited partner payout. The second location opened in Johannesburg
in June 2010 and a third location opened in Cape Town in June of 2011 with similar structures. Effective September 30, 2011, the
Company acquired majority control of the South African operations and began consolidating its operations on October 1, 2011.



CHA (Hoot Campbelltown
Pty. Ltd and Hoot Surfers Paradise Pty. Ltd.) – CHA entered into a partnership with the current local Hooters franchisee
in Australia in which CHA will own 49% and its partner own 51%. The local partner will also manage the restaurants. The first location,
Hoot Campbelltown Pty. Ltd. opened in Capmbelltown, a suburb of Sydney, in January 2012. A second location, Hoot Surfers Paradise
Pty. Ltd., is underway with plans to open in the second quarter of 2012.



INVESTMENTS ACCOUNTED FOR USING THE COST METHOD



A summary of the activity in investments
accounted for using the cost method follows.



|                                                        |  | 2011 |         |  | 2010 |  
|------------------------------------------------------- |  | ---- | ------- |  | ---- | -
|Investments at cost:                                    |  |      |         |  |      |  
|Balance, beginning of year                              |  | $    | 766,598 |  |      | $
|Impairment                                              |  |      | -       |  |      |  
|Proceeds from sale of investment                        |  |      | -       |  |      |  
|Investment transferred to available-for-sale securities |  |      | -       |  |      |  
|Total                                                   |  | $    | 766,598 |  |      | $



Investments at cost consist of the following
at December 31, 2011 and 2010:



|                                                   |  | 2011 |         |  | 2010 |  
|-------------------------------------------------- |  | ---- | ------- |  | ---- | -
|                                                   |  |      |         |  |      |  
|Chanticleer Investors, LLC                         |  | $    | 500,000 |  |      | $
|Edison Nation LLC (FKA Bouncing Brain Productions) |  |      | 250,000 |  |      |  
|Chanticleer Investors II                           |  |      | 16,598  |  |      |  
|                                                   |  | $    | 766,598 |  |      | $



36







Chanticleer Investors
LLC -The Company sold 1/2 of its investment in Investors LLC in May 2009, which reduced its ownership from 23% to 11.5%. Accordingly,
in May 2009, the Company discontinued accounting for this investment using the equity method and began to account for the investment
using the cost method. In December 2010, the Company sold an additional $75,000 of its investment at cost.



On April 18, 2006,
the Company formed Investors LLC and sold units for $5,000,000. Investors LLC’s principal asset was a convertible note in
the amount of $5,000,000 with Hooters of America, Inc. (“HOA”), collateralized by and convertible into 2% of Hooters
common stock. The original note included interest at 6% and was due May 24, 2009. The note was extended until November 24, 2010
and included an increase in the interest rate to 8%.



The Company owned
$1,150,000 (23%) of Investors LLC until May 29, 2009 when it sold 1/2 of its share for $575,000. Under the original arrangement,
the Company received 2% of the 6% interest as a management fee ($25,000 quarterly) and 4% interest on its investment ($11,500 quarterly).
Under the extended note and revised operating agreement, the Company receives a management fee of $6,625 quarterly and interest
income of $11,500 quarterly.



On January 24, 2011,
Investors LLC and its three partners combined to form HOA Holdings, LLC ("HOA LLC") and completed the acquisition of
HOA and Texas Wings, Inc. ("TW"). Together HOA LLC has created an operating company with 161 company-owned locations
across sixteen states, or nearly half of all domestic Hooters restaurants and over one-third of the locations worldwide.



Investors, LLC had
a note receivable in the amount of $5,000,000 from HOA that was repaid at closing. Investors LLC then invested $3,550,000 in HOA
LLC (approximately 3.1%) ($500,000 of which is the Company's share). One of the investors in Investors LLC that owned a $1,750,000
share is a direct investor in HOA LLC and will now carry its ownership in HOA LLC directly. The Company now owns approximately
14% of Investors LLC.



Based on the current
status of this investment, the Company does not consider the investment to be impaired.



EE Investors, LLC
-On January 26, 2006, we acquired an investment in EE Investors, LLC with cash in the amount of $250,000. We acquired 1,205
units (3.378%) in EE Investors, LLC, whose sole asset is 40% of Edison Nation, LLC (formerly Bouncing Brain Productions, LLC).
Edison Nation was formed to provide equity capital for new inventions and help bring them to market. The initial business plan
included developing the products and working with manufacturers and marketing organizations to sell the products. This has evolved
into a less hands-on program which involves selling products with patents to other larger companies and retaining royalties. Edison
Nation has now reached cash flow break-even, and in addition has been retained by a number of companies for which they do product
searches to supplement its business. Edison Nation plans to repay the majority of its debt in 2012 and expects to subsequently
begin making distributions to its owners. Based on the current status of this investment, the Company does not consider the investment
to be impaired.



Chanticleer Investors
II -The Company paid $16,598 in professional services to form this partnership. Chanticleer Advisors, LLC acts as the managing
general partner and receives a management fee based on a percentage of profits.



37







| | 5. | PROPERTY AND EQUIPMENT
| | -- | ----------------------



Property and equipment
consists of the following at December 31, 2011 and 2010:



|                                     |  | 2011 |           |   | 2010 |  
|------------------------------------ |  | ---- | --------- | - | ---- | -
|                                     |  |      |           |   |      |  
|Office and computer equipment        |  | $    | 32,179    |   |      | $
|Furniture and fixtures               |  |      | 67,794    |   |      |  
|Construction in progress             |  |      | 217,001   |   |      |  
|Restaurant furnishings and equipment |  |      | 1,333,926 |   |      |  
|                                     |  |      | 1,650,900 |   |      |  
|Accumulated depreciation             |  |      | (145,841  | ) |      |  
|                                     |  | $    | 1,505,059 |   |      | $



Construction in progress consists
of costs incurred as of December 31, 2011 for our Emperor’s Palace location in Johannesburg, South Africa, which opened in
February 2012. Restaurant furnishings and equipment consists of leasehold improvements, and bar, kitchen and restaurant equipment
used in our three locations opened as of December 31, 2011. Depreciation expense was $74,238 and $11,079 for the years ended December
31, 2011, and December 31, 2010, respectively. Restaurant furnishings and equipment includes capital lease assets of $141,416 with
a net book value of $131,544 at December 31, 2011.



| | 6. | INTANGIBLE ASSET (As Restated, see Note 17)
| | -- | -------------------------------------------



GOODWILL



Goodwill arose from
the excess paid over the fair value of the net assets acquired for the three operating restaurants effective October 1, 2011 and
amounts to $396,487. An evaluation was completed effective December 31, 2011 at which time the Company determined that no impairment
was necessary.



INTANGIBLE ASSETS,
NET



Intangible assets,
net at December 31, 2011 consists of franchise fees for the Company’s South African restaurants of $330,388, less amortization
of $5,304. The Company is amortizing these costs from the opening of each restaurant for the 20 year term of the franchise agreement
with HOA.



The estimated amortization of the franchise costs for the years
ending December 31, 2012 and thereafter is as follows:



|For the year ending |  |                 |        
|------------------- |  | --------------- | -------
|December 31         |  | Franchise Costs |        
|                    |  |                 |        
|2012                |  | $               | 17,251 
|2013                |  |                 | 17,251 
|2014                |  |                 | 17,251 
|2015                |  |                 | 17,251 
|2016                |  |                 | 17,251 
|Thereafter          |  |                 | 238,829
|                    |  |                 |        
|Total               |  | $               | 325,084



38







| | 7. | LONG-TERM DEBT AND NOTES PAYABLE
| | -- | --------------------------------



Long-term debt and
notes payable are summarized as follows.

|                                                                                                                                                                                                                                                                                                       |  | December 31, |           |  | December 31, |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------ | --------- |  | ------------ | -
|                                                                                                                                                                                                                                                                                                       |  | 2011         |           |  | 2010         |  
|                                                                                                                                                                                                                                                                                                       |  |              |           |  |              |  
|$2,000,000 line of credit with a bank, interest at Wall Street Journal Prime +0.5% (minimum of 4.5%) payable monthly; due August 20, 2012; collateralized by a certificate of deposit owned by a shareholder; collateralized by substantially all of the Company's assets and guaranteed by Mr. Pruitt |  | $            | 1,165,000 |  |              | $
|                                                                                                                                                                                                                                                                                                       |  |              |           |  |              |  
|Note payable to a bank due in monthly installments of $1,739 including interest at Wall Street Journal Prime + 1% (minimum of 5.5%); remaining balance due August 10, 2013; collateralized by substantially all of the Company's assets and guaranteed by Mr. Pruitt                                   |  |              | 242,964   |  |              |  
|                                                                                                                                                                                                                                                                                                       |  |              |           |  |              |  
|18% convertible notes payable; interest payable quarterly; due on the six-month anniversary of the date issued; convertible under the same terms as the subsequent capital raised in connection with a public offering of the Company's securities (currently approximately 544,000 shares)            |  |              | 1,625,000 |  |              |  
|                                                                                                                                                                                                                                                                                                       |  |              |           |  |              |  
|10% convertible notes payable; interest payable quarterly; due January 4, 2012; converted into common stock at the rate of $1.75 per share on March 30, 2011                                                                                                                                           |  |              | -         |  |              |  
|                                                                                                                                                                                                                                                                                                       |  |              | 3,032,964 |  |              |  
|Notes payable and current portion of long-term debt                                                                                                                                                                                                                                                    |  |              | 2,796,855 |  |              |  
|Long-term debt, less current portion                                                                                                                                                                                                                                                                   |  | $            | 236,109   |  |              | $



The Company pays the
shareholder whose certificate of deposit is used as collateral on the $2,000,000 line of credit 1% of the outstanding balance on
the line of credit monthly. In addition, the Company issued warrants to the shareholder, as described in Note 11.



During the three months
ended March 31, 2011, the Company issued convertible notes payable with a total principal balance of $25,000 in exchange for an
amount due a related party of $25,000. The convertible notes included interest at 10% per annum, which was payable quarterly beginning
on April 1, 2010 until maturity on January 4, 2012. The convertible notes were convertible into our common stock at the rate of
$1.75 per share. Convertible notes with a face value of $711,500 and accrued interest of $19,588 were converted into 412,286 shares
of our common stock on March 30, 2011.



39







| | 8. | Bank Overdraft
and Term Facilities
| | -- | ----------------------------------



Bank overdraft
and term facilities at December 31, 2011 are associated with the South African Operations and consist of the following:



|                              |  | Amount |        
|----------------------------- |  | ------ | -------
|Bank overdraft facilities (1) |  | $      | 255,607
|Term facility (2)             |  |        | 112,950
|Term facility (3)             |  |        | 225,371
|                              |  |        |        
|Principal balance             |  | $      | 593,928
|Less: current portion         |  |        | 330,607
|Long-Term Portion             |  | $      | 263,321



| | (1) | Bank overdraft facilities are unsecured and have a total maximum facility of approximately $260,000.
The interest rate as of December 31, 2011 is 11%. The facilities are reviewed annually and are payable on demand.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Term facility is payable on demand and the facility is secured by certain assets of one of the
Company’s shareholders.
| | --- | ----------------------------------------------------------------------------------------------------------------------

| | (3) | The monthly payments of principal and interests of the term facility
total approximately $5,300 and have been made for the period from October 1, 2011 through December 2011. The interest rate at December
31, 2011 is 10.3%.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 9. | Capital Leases
Payable
| | -- | ----------------------



Capital leases payable at December
31, 2011 is associated with the South African Operations and consists of the following:



|Capital lease payable, due in 53 monthly installments of $1,081, including interest at 10%, through April 2016    |  | $ | 46,149  |  
|----------------------------------------------------------------------------------------------------------------- |  | - | ------- | -
|                                                                                                                  |  |   |         |  
|Capital lease payable, due in 35 monthly installments of $800, including interest at 10%, through November 2014   |  |   | 24,186  |  
|                                                                                                                  |  |   |         |  
|Capital lease payable, due in 17 monthly installments of $1,470, including interest at 10%, through May 2013      |  |   | 23,211  |  
|                                                                                                                  |  |   |         |  
|Capital lease payable, due in 39 monthly installments of $1,022, including interest at 10%, through February 2015 |  |   | 33,897  |  
|                                                                                                                  |  |   |         |  
|Total capital leases payable                                                                                      |  |   | 127,443 |  
|Less: current maturities                                                                                          |  |   | (41,590 | )
|                                                                                                                  |  |   |         |  
|Total Long-Term Maturities                                                                                        |  | $ | 85,853  |  



The capital leases cover point
of sale and other equipment for the three restaurants operating at December 31, 2011. Annual requirements for capital lease obligations
are as follows:



|December 31,                                |  | Amount |        
|------------------------------------------- |  | ------ | -------
|2012                                        |  | $      | 52,463 
|2013                                        |  |        | 42,172 
|2014                                        |  |        | 34,022 
|2015                                        |  |        | 16,033 
|2016                                        |  |        | 5,403  
|Total minimum lease payments                |  |        | 150,093
|Less: amount representing interest          |  |        | (22,650
|                                            |  |        |        
|Present Value of Net Minimum Lease Payments |  | $      | 127,443



40







| | 10. | INCOME TAXES
| | --- | ------------



The amounts of U.S.
and foreign income before income taxes, with a reconciliation of tax at the federal United States statutory rate (34%) and the
South African statutory rate (28%) with the provision for income taxes were:



|                                                 |  | 2011 |           |   | 2010 |  
|------------------------------------------------ |  | ---- | --------- | - | ---- | -
|                                                 |  |      |           |   |      |  
|Loss (earnings) before income taxes:             |  |      |           |   |      |  
|United States                                    |  | $    | 890,941   |   |      | $
|Foreign                                          |  |      | 271,773   |   |      |  
|                                                 |  | $    | 1,162,714 |   |      | $
|Computed "expected" income tax expense (benefit) |  | $    | (395,300  | ) |      | $
|State income taxes, net of federal benefit       |  |      | (46,500   | ) |      |  
|Travel, entertainment and other                  |  |      | 3,700     |   |      |  
|Valuation allowance                              |  |      | 438,100   |   |      |  
|Income tax expense (benefit)                     |  | $    | -         |   |      | $



Deferred income taxes reflect the net tax effect of temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax
purposes. Major components of deferred tax assets and liabilities at December 31, 2011 and 2010 were:



|                                 |  | 2011 |            |   | 2010 |  
|-------------------------------- |  | ---- | ---------- | - | ---- | -
|                                 |  |      |            |   |      |  
|Net operating loss carryforwards |  | $    | 1,660,200  |   |      | $
|Capital loss carryforwards       |  |      | 630,100    |   |      |  
|Investments                      |  |      | (86,700    | ) |      |  
|Foreign operations               |  |      | 103,300    |   |      |  
|Total deferred tax assets        |  |      | 2,306,900  |   |      |  
|Valuation allowance              |  |      | (2,306,900 | ) |      |  
|Net deferred tax assets          |  | $    | -          |   |      | $



The Company has a
net operating loss carryforward of approximately $4,369,000 which will expire at various dates beginning in 2024 through 2031,
if not utilized. The Company has a capital loss carryforward of $1,658,000 which expires between 2015 and0 2016 if not utilized.
The tax basis of investments is less than their book cost by approximately $228,000.



| | 11. | Stockholders’
Equity
| | --- | --------------------



The Company has 200,000,000
shares of its $0.0001 par value common stock authorized and 3,012,121 and 2,571,918 shares issued and 2,498,891 and 2,048,688 shares
outstanding at December 31, 2011 and 2010, respectively. There are no options outstanding.



Effective March 23,
2011, the Company's common stock was forward split, 2 shares for each share issued, pursuant to written consent by a majority of
the Company's shareholders. All share references have been adjusted as if the split occurred prior to all periods presented.



41







2011 Transactions



On March 30, 2011,
the Company issued 412,286 shares of its common stock in exchange for convertible notes payable with a balance of $711,500 and
accrued interest of $19,588.



On July 28, 2011,
the Company issued 10,000 shares of its common stock in exchange for consulting services valued at $21,500.



On September 23, 2011,
the Company issued 15,000 shares of its common stock in exchange for consulting services to be performed valued at $44,850.



On September 23, 2011,
the Company issued 2,750 shares of its common stock in exchange for services performed and valued at $8,223.



On October 19, 2011,
the Company issued 167 shares of its common stock in exchange for cash in the amount of $500.



2010 Transactions



During the year ended
December 31, 2010, the Company issued: 15,572 shares of its common stock valued at $25,000 to two consultants for consulting services;
33,594 shares of its common stock valued at $58,790 for amounts due a related party; and issued 10,000 shares for $17,500 in accounts
payable. Effective December 31, 2010, the Company issued 20,000 shares of its common stock to its outside directors for directors
fees valued at $42,500.



Warrants



On January 6, 2011,
the Company filed a Form S-1 Registration Statement under the Securities Act of 1933. The Registration Statement was declared effective
on July 14, 2011 and registers one Class A Warrant and one Class B Warrant for each common share of the Company issued and outstanding.
The warrants have a subscription price of $0.04 which entitles our shareholders to acquire one Class A Warrant which would entitle
the holder to acquire one share of our common stock for $2.75 and one Class B Warrant which would entitle the holder to acquire
one share of our common stock for $3.50. The warrants have a five year life. At December 31, 2011, the Company had issued 2,194,509
Class A and Class B warrants. Proceeds from the offering are summarized as follows.



|Proceeds from sales of Class A and Class B warrants |  | $ | 87,780  |  
|--------------------------------------------------- |  | - | ------- | -
|Legal and professional fees incurred for offering   |  |   | (67,172 | )
|                                                    |  | $ | 20,608  |  



On August 10, 2011,
the Company issued two warrants to the shareholder who collateralized the Company's $2,000,000 line of credit discussed in Note
7. The Class A Warrant is for 200,000 shares exercisable at $2.75 per share for 10 years and the Class B Warrant is for 250,000
shares exercisable at $3.50 per share for 10 years. The warrants were valued using Black-Scholes at $906,351. This amount will
be amortized to interest expense over the ten year life of the warrants. At December 31, 2011, additional paid-in capital and interest
expense include $35,247 in amortization.



On November 1, 2011,
the Company entered into an investor relations consulting agreement. In addition to cash compensation, the consultant is entitled
to receive warrants for certain performance goals. These warrants will be accounted for when the goals are accomplished.



42







| | 12. | RELATED PARTY
TRANSACTIONS
| | --- | --------------------------



Due to related parties



The Company has received
non-interest bearing loans and advances from related parties. The amounts owed by the Company as of December 31, 2011 and 2010
are as follows:



|                             |  | 2011 |        |  | 2010 |  
|---------------------------- |  | ---- | ------ |  | ---- | -
|                             |  |      |        |  |      |  
|Hoot SA III, LLC             |  | $    | -      |  |      | $
|Hoot SA I, LLC               |  |      | 15,409 |  |      |  
|Chanticleer Foundation, Inc. |  |      | 10,750 |  |      |  
|Chanticleer Investors, LLC   |  |      | 4,045  |  |      |  
|Avenel Financial Group       |  |      | -      |  |      |  
|                             |  | $    | 30,204 |  |      | $



Due from related parties



The Company has earned
income from and made advances to related parties. The amounts owed to the Company at December 31, 2011 and 2010 is as follows:



|                                |  | 2011 |        |  | 2010 |  
|------------------------------- |  | ---- | ------ |  | ---- | -
|                                |  |      |        |  |      |  
|Chanticleer Investors II, LLC   |  | $    | 1,485  |  |      | $
|Chanticleer Investors, LLC      |  |      | -      |  |      |  
|Chanticleer Dividend Fund, Inc. |  |      | 74,281 |  |      |  
|Hoot SA II, LLC                 |  |      | 825    |  |      |  
|Other                           |  |      | -      |  |      |  
|                                |  | $    | 76,591 |  |      | $



Management income from affiliates



The Company had management income from
its affiliates in 2011 and 2010, as follows:



|                                      |  | 2011 |       |  | 2010 |  
|------------------------------------- |  | ---- | ----- |  | ---- | -
|                                      |  |      |       |  |      |  
|Chanticleer Investors, LLC            |  | $    | -     |  |      | $
|Chanticleer Investors II, LLC         |  |      | 1,485 |  |      |  
|Efftec International, Inc.            |  |      | -     |  |      |  
|North American Energy Resources, Inc. |  |      | 1,750 |  |      |  
|                                      |  | $    | 3,235 |  |      | $



Chanticleer Investors LLC



Investors LLC collected
its note receivable and reinvested $3,550,000 in HOA LLC (See Note 4). The Company received $26,500 in management income from Investors
LLC in 2010, before the investment in HOA LLC was completed. There was no management income from Investors LLC in 2011.



43







Chanticleer Investors II LLC



The Company manages
Investors II and earned management income of $1,485 and $57,718 ($46,547 was collected March 15, 2011 and $11,171 was collected
in 2010) in 2011 and 2010, respectively.



Chanticleer Dividend Fund, Inc. ("CDF")



On November 10, 2010
the Company formed CDF under the general corporation laws of the State of Maryland. CDF filed a registration statement under Form
N-2 to register as a non-diversified, closed-end investment company in January 2011. The Company, through Advisors, will have a
role in management of CDF when its registration statement becomes effective.



Hoot SA, LLC; Hoot SA II, LLC; and Hoot
SA III, LLC



The Hoot partnerships
were formed to help finance the first three Hooters restaurants in South Africa.



Efftec International, Inc. ("Efftec")



The Company's CEO
became CEO and the sole director of Efftec during 2010 and the Company received 150,000 common shares and an option to acquire
150,000 shares for management services. The shares and option were initially valued at $22,500, based on the trading price of Efftec
at the time.



North American Energy Resources, Inc.
("NAEY")



The Company's CEO
became CEO and a director of NAEY during 2010 and the Company received 150,000 common shares for management services. The shares
were valued at $10,500, based on the trading price of NAEY at the time. The Company's CEO resigned as CEO of NAEY in December 2010
and remains a director. During June 2011, the Company’s CEO contributed 1,790,440 shares of NAEY to the Company which was
valued at $125,331 based on the trading price at the time. Mr. Pruitt did not receive additional compensation as a result of the
transfer.



Chanticleer Foundation, Inc.



Chanticleer Foundation,
Inc. is a Donor-Advised Fund whose governing body consists of Mr. Pruitt, a director of the Company and an employee of the Company.
The Foundation loaned the Company $10,750 during 2011.



Avenel Financial Group, Inc.



Avenel Financial Group,
Inc. is a company owned by Mr. Pruitt. Advances previously made to the Company were repaid during 2011.



Other



The Company acquired
trading securities from a related party for $26,334 which were sold for $32,917 in 2010.



44







| | 13. | SEGMENTS OF
BUSINESS
| | --- | --------------------



The Company is organized into two segments
as of the end of 2011 and 2010.



Management and consulting services ("Management")



The Company provides
management and consulting services for small companies which are generally seeking to become publicly traded. The Company also
provides management and investment services for Investors LLC, Investors II and other unaffiliated companies.



Operation of restaurants ("Restaurants")



At December 31, 2011,
the Company has majority ownership of four restaurants and a management company in South Africa. Three of the restaurants and the
management company were operating at December 31, 2011 and the fourth restaurant opened in February 2012. Majority ownership was
acquired effective September 30, 2011 and these operations are consolidated with the Company’s other operations since that
date. At December 31, 2011, the Company has 49% ownership of two restaurants in Australia, one of which opened in January 2012
and the second is under construction and expected to open in the second quarter of 2012. The operations in Australia will be accounted
for using the equity method. The Company has also begun activity in Hungary, Brazil and Europe, but has not finalized any arrangement.



Financial information
regarding the Company's segments is as follows for 2011 and 2010.



Year ended December
31, 2011 (restated)



|                                    |  | Management |            |   | Restaurants |   |           | Total | 
|----------------------------------- |  | ---------- | ---------- | - | ----------- | - | --------- | ----- | 
|                                    |  |            |            |   |             |   |           |       | 
|Revenues                            |  | $          | 496,402    |   |             | $ | 980,247   |       | 
|                                    |  |            |            |   |             |   |           |       | 
|Interest expense                    |  | $          | 118,995    |   |             | $ | 64,472    |       | 
|                                    |  |            |            |   |             |   |           |       | 
|Depreciation and amortization       |  | $          | 8,013      |   |             | $ | 71,529    |       | 
|                                    |  |            |            |   |             |   |           |       | 
|Profit (loss)                       |  | $          | (1,035,763 | ) |             | $ | (228,258  | )     | 
|Investments and other               |  |            |            |   |             |   |           |       | 
|Non-controlling interest            |  |            |            |   |             |   |           |       | 
|                                    |  |            |            |   |             |   |           |       | 
|                                    |  |            |            |   |             |   |           |       | 
|Assets                              |  | $          | 950,966    |   |             | $ | 2,762,782 |       | 
|Investments                         |  |            |            |   |             |   |           |       | 
|                                    |  |            |            |   |             |   |           |       | 
|                                    |  |            |            |   |             |   |           |       | 
|Liabilities                         |  | $          | 3,327,318  |   |             | $ | 985,613   |       | 
|                                    |  |            |            |   |             |   |           |       | 
|Expenditures for non-current assets |  | $          | 2,808      |   |             | $ | 217,003   |       | 



45











Year ended December 31, 2010



|                                    |  | Management |           |   | Restaurants |   |        | Total | 
|----------------------------------- |  | ---------- | --------- | - | ----------- | - | ------ | ----- | 
|                                    |  |            |           |   |             |   |        |       | 
|Revenues                            |  | $          | 136,301   |   |             | $ | -      |       | 
|                                    |  |            |           |   |             |   |        |       | 
|Interest expense                    |  | $          | 140,016   |   |             | $ | -      |       | 
|                                    |  |            |           |   |             |   |        |       | 
|Depreciation and amortization       |  | $          | 11,079    |   |             | $ | -      |       | 
|                                    |  |            |           |   |             |   |        |       | 
|Profit (loss)                       |  | $          | (949,904  | ) |             | $ | 58,337 |       | 
|Investments and other               |  |            |           |   |             |   |        |       | 
|Non-controlling interest            |  |            |           |   |             |   |        |       | 
|                                    |  |            |           |   |             |   |        |       | 
|                                    |  |            |           |   |             |   |        |       | 
|Assets                              |  | $          | 208,261   |   |             | $ | 87,200 |       | 
|Investments                         |  |            |           |   |             |   |        |       | 
|                                    |  |            |           |   |             |   |        |       | 
|                                    |  |            |           |   |             |   |        |       | 
|Liabilities                         |  | $          | 1,332,134 |   |             | $ | -      |       | 
|                                    |  |            |           |   |             |   |        |       | 
|Expenditures for non-current assets |  | $          | 4,517     |   |             | $ | -      |       | 



The following is revenues and long-lived assets by geographic
area as of and for the years ended December 31:



|Revenue:      |  | 2011 |           |  | 2010 |  
|------------- |  | ---- | --------- |  | ---- | -
|United States |  | $    | 496,402   |  |      | $
|South Africa  |  |      | 980,247   |  |      |  
|              |  | $    | 1,476,649 |  |      | $



|Long-lived assets, end of year: |  | 2011 |           |  | 2010 |  
|------------------------------- |  | ---- | --------- |  | ---- | -
|United States                   |  | $    | 1,649,049 |  |      | $
|South Africa                    |  |      | 1,835,411 |  |      |  
|Australia                       |  |      | 672,175   |  |      |  
|Brazil                          |  |      | 101       |  |      |  
|                                |  | $    | 4,156,736 |  |      | $



The Company used multiple
foreign currency exchange rates during the periods presented. For South Africa, for the Statements of Operations we used average
rates for the period ranging from 7.94-8.17 Rands per USD, and for the Balance Sheet current assets and liabilities were at 8.12
and non-current assets and liabilities ranging from 6.93-8.07. For Australia, for the Statement of Operations we used an average
rate of 1.02 USD per AUD and for the balance sheet we used 1.06 for current assets and liabilities, and 1.02 for non-current assets
and liabilities.



| | 14. | COMMITMENTS
AND CONTINGENCIES
| | --- | -----------------------------



Effective August
1, 2010, the Company extended its office lease agreement for its office for a term of one year with monthly lease payments of
$2,100. Since August 1, 2011, the office lease continues at the same rate on a month-to-month basis.



46







TheCompany leases the land and buildings for its four restaurants in South Africa through its subsidiaries. The leases are
for five year terms and include options to extend the terms. We lease our restaurant facilities under “triple net”
leases that require us to pay minimum rent, real estate taxes, maintenance costs and insurance premiums and, in some instances,
percentage rent based on sales in excess of specified amounts. Rent obligations for our four restaurants are presented below:



|2012       |  | $ | 579,250   | 
|---------- |  | - | --------- | 
|2013       |  |   | 620,424   | 
|2014       |  |   | 656,840   | 
|2015       |  |   | 553,890   | 
|thereafter |  |   | 464,619   | 
|Totals     |  | $ | 2,875,023 | 



Rent expense for
the years ended December 31, 2011 and December 31, 2010 was $112,334 and $25,200, respectively. Rent expense for the year ended
December 31, 2011 for the South African restaurants was $83,116, and is included in the “Restaurant operating expenses”
of the Consolidated Statement of Operations. Rent expense for the year ended December 31, 2011 for the management segment was
$29,218, and is included in the “General and administrative expense” of the Consolidated Statement of Operations.
Rent expense for the year ended December 31, 2010 was all for the management segment.



| | 15. | DISCLOSURES ABOUT FAIR VALUE
| | --- | ----------------------------



Assets and liabilities measured at fair
value on a recurring basis are summarized in the following tables according to FASB ASC 820 pricing levels.



|                              |  | Fair Value Measurement Using |        
|----------------------------- |  | ---------------------------- | -------
|                              |  |                              |        
|                              |  |                              |        
|                              |  |                              |        
|                              |  |                              |        
|                              |  | Recorded                     |        
|                              |  | value                        |        
|                              |  |                              |        
|December 31, 2011             |  |                              |        
|Assets:                       |  |                              |        
|Available-for-sale securities |  | $                            | 318,353
|                              |  |                              |        
|December 31, 2010             |  |                              |        
|Assets:                       |  |                              |        
|Available-for-sale securities |  | $                            | 352,500



At December 31, 2011
and 2010, the Company's available-for-sale equity securities were valued using Level 1 and Level 2 inputs as summarized above.
Level 1 inputs are based on unadjusted prices for identical assets in active markets that the Company can access. Level 2 inputs
are based on quoted prices for similar assets other than quoted prices in Level 1, quoted prices in markets that are not yet active,
or other inputs that are observable or can be derived principally from or corroborated by observable market data for substantially
the full term of the assets.



The Company does
not have any investments that are measured on a recurring basis using Level 3 inputs.



Certain assets are
not carried at fair value on a recurring basis, including investments accounted for under the equity and cost methods. Accordingly,
such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at
fair value after initial recognition and the resulting re-measurement is reflected in the consolidated financial statements.



In 2010, the Company
considered a cost basis investment to be impaired and recognized an impairment loss of $250,000 in the consolidated statement
of operations. This impairment was determined using Level 3 inputs to determine the estimated fair value, which was determined
to be less than the recorded amounts.



47







See Note 4 for further
details of the Company's investments.



| | 16. | SUBSEQUENT EVENTS
| | --- | -----------------



CONVERTIBLE NOTES PAYABLE



On January 5, 2012, March 15, 2012 and
March 29, 2012, the Company received an additional $100,000, $135,000 and $865,000, respectively, of convertible debt, bringing
the total to $2,725,000.



EQUITY RAISE



On February 22, 2012,
the Company filed a Form S-1 Registration Statement under the Securities Act of 1933. The Registration Statement, when effective,
would seek to raise $15 million with the issuance of 5 million units consisting of Common Stock shares at $3.00 per share and
five year warrants at $3.25 per share.



NEW HOOTERS DEVELOPMENT RIGHTS



On March 15, 2012,
the Company announced it had secured exclusive rights to operate Hooters restaurants in 3 of the most populated states of Brazil.
The Company has partnered with the Nash Group, an established restaurant operating company, forming a joint venture company Chanticleer
& Nash Brasil Foods Participações Ltda. ("CNBF"), where Chanticleer will own 60% of the operating
entity. The group expects to open its first restaurant in the 3rd quarter 2012. The franchise agreement, signed with CNBF and
Hooters of America on March 13, 2012, provides CNBF exclusive rights to open and operate Hooters restaurants in 3 states, including
Rio de Janeiro, Minas Gerais and Espirito Santo, over the next 20 years.



| | 17. | RESTATEMENT OF 2011 FINANCIAL INFORMATION
| | --- | -----------------------------------------



These consolidated
financial statements restate certain items previously reported by the Company for the 2011 year and revise certain items previously
reported by the Company in the notes to the consolidated financial statements due to the events described below.



Restated balances
for 2011 Financial Information items have been identified with the notation “Restated” where appropriate and applicable.





48







Other than the revising
of the previously filed consolidated financial statements relating to the restatement, these notes to the consolidated financial
statements speak as of the filing date of the Company’s original Form 10-K for the year ended December 31, 2011, filed on
April 6, 2012, and these notes to the consolidated financial statements have not been updated to reflect other events occurring
subsequent to the original filing date. These notes to the consolidated financial statements should be read in their historical
context, except to the extent revised as a result of this restatement.



On September
7, 2012, the audit committee of Chanticleer Holdings, Inc. (the “Company”), upon recommendation of
the Company’s management determined that the Company’s Consolidated Financial Statements for its fiscal year
ended December 31, 2011 as originally filed in the Form 10-K could no longer be relied on. The Company determined that
the Financial Statements of Kiarabrite (Pty) Ltd., Dimaflo (Pty) Ltd., Tundraspex (Pty) Ltd., Civisign (Pty) Ltd.,
Dimalogix (Pty) Ltd., and Chanticleer & Shaw Foods (Pty.) Ltd. (collectively referred to as the “South Africa
Operations”) which are the South African management company and the four entities organized for the stores we operate
in South Africa, and the company that owns the HOA franchise rights for the territory of South Africa, were not audited
as the Company was led to believe. Accordingly, this Amendment is being filed to include the report of the
independent registered public accounting firm responsible for performing the audit of our South Africa Operations. The
following tables reflect the items which changed as a result of the restatement and includes the balances as previously
reported, the adjustments and the restated balance.



On September 7, 2012,
the Company’s South African Chief Financial Officer (“SA CFO”) resigned. It was determined that the SA CFO had
committed certain illegal acts, fraud and certain misrepresentations of facts. Due to the SA CFO’s actions, certain taxes
were not paid. In addition, the applicable tax forms were not filed during the proper periods. The Company has engaged tax experts
to assist in the tax process. The Company also discovered approximately $42,109 of cash that was misappropriated by the SA CFO
during the fourth quarter of 2011 (presented as “other receivable” on the Company’s combined balance sheet as
of December 31, 2011), and approximately $128,000 in total for the period October 2011 through September 2012. As of November
23, 2012, approximately $40,000 has been recovered by the Company and payment plans are in place for the remainder.







The Company has engaged
outside South African tax experts in September 2012 to assist with compliance with Value Added Tax (VAT), payroll taxes, and income
taxes in South Africa. A voluntary disclosure agreement has been submitted and the Company is awaiting contact from the South
African governmental agency.





In connection with the acquisition
of assets as described in Note 3, the Company believes the purchase and sale with the seller was accomplished in accordance with
the laws and regulations of the taxing authorities in South Africa. However, there can be no absolute assurance that the seller
has fulfilled its tax and regulatory filing requirements, and whether or not the local authorities could seek to recover any unpaid
taxes or other amounts from the Company, its shareholders or others. The Company is not aware of any known obligations for which
the Company may be required to settle.



The
following tables reflect the consolidated balance sheet, statement of operations and statement of cash flows as of December
31, 2011, and for the year then ended of the consolidated amounts previously reported, adjustments reflected in this amended
filing, and the restated amounts for 2011.



49







Consolidated Balance Sheet

|                                                       |  | December 31, 2011 |           
|------------------------------------------------------ |  | ----------------- | ----------
|                                                       |  | As Previously     |           
|                                                       |  | Reported          |           
|ASSETS                                                 |  |                   |           
|Current assets:                                        |  |                   |           
|Cash and cash equivalents                              |  | $                 | 151,928   
|Accounts receivable                                    |  |                   | 103,982   
|Other receivable                                       |  |                   | -         
|Inventory                                              |  |                   | 59,266    
|Due from related parties                               |  |                   | 76,591    
|Prepaid expenses                                       |  |                   | 231,914   
|TOTAL CURRENT ASSETS                                   |  |                   | 623,681   
|Property and equipment, net                            |  |                   | 2,508,823 
|Goodwill                                               |  |                   | -         
|Intangible assets, net                                 |  |                   | 470,164   
|Investments at fair value                              |  |                   | 318,353   
|Other investments                                      |  |                   | 1,579,677 
|Deposits and other assets                              |  |                   | 3,980     
|TOTAL ASSETS                                           |  | $                 | 5,504,678 
|                                                       |  |                   |           
|LIABILITIES AND STOCKHOLDERS' EQUITY                   |  |                   |           
|Current liabilities:                                   |  |                   |           
|Current maturities of long-term debt and notes payable |  | $                 | 1,171,855 
|Convertible notes payable                              |  |                   | 1,625,000 
|Accounts payable and accrued expenses                  |  |                   | 288,996   
|Deferred rent                                          |  |                   | -         
|Other current liabilities                              |  |                   | 496,643   
|Current maturities of capital lease payable            |  |                   | -         
|Income taxes payable                                   |  |                   | 14,608    
|Due to related parties                                 |  |                   | 30,204    
|TOTAL CURRENT LIABILITIES                              |  |                   | 3,627,306 
|Capital lease payable, less current maturities         |  |                   | -         
|Deferred rent                                          |  |                   | -         
|Other liabilities                                      |  |                   | -         
|Long-term debt, less current maturities                |  |                   | 236,109   
|TOTAL LIABILITIES                                      |  |                   | 3,863,415 
|Commitments and contingencies (Note 14)                |  |                   |           
|                                                       |  |                   |           
|Stockholders' equity:                                  |  |                   |           
|Common stock                                           |  |                   | 301       
|Additional paid in capital                             |  |                   | 6,459,506 
|Other comprehensive income                             |  |                   | 48,665    
|Non-controlling interest                               |  |                   | 1,692,019 
|Accumulated deficit                                    |  |                   | (6,032,808
|Less treasury stock                                    |  |                   | (526,420  
|                                                       |  |                   | 1,641,263 
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY             |  | $                 | 5,504,678 





50









Consolidated Statement of Operations

|                                                                                                       |  | December 31, 2011 |           
|------------------------------------------------------------------------------------------------------ |  | ----------------- | ----------
|                                                                                                       |  | As Previously     |           
|                                                                                                       |  | Reported          |           
|Revenue:                                                                                               |  |                   |           
|Restaurant sales, net                                                                                  |  | $                 | 967,418   
|Management fee income - non-affiliates                                                                 |  |                   | 493,167   
|Management fee income - affiliates                                                                     |  |                   | 3,235     
|Total revenue                                                                                          |  |                   | 1,463,820 
|Expenses:                                                                                              |  |                   |           
|Restaurant cost of sales                                                                               |  |                   | 360,810   
|Restaurant operating expenses                                                                          |  |                   | 483,946   
|General and administrative expense                                                                     |  |                   | 1,245,752 
|Depreciation and amortization                                                                          |  |                   | 87,617    
|Total expenses                                                                                         |  |                   | 2,178,125 
|Loss from operations                                                                                   |  |                   | (714,305  
|Other income (expense)                                                                                 |  |                   |           
|Equity in earnings (losses) of investments                                                             |  |                   | (76,113   
|Realized gains from sales of investments                                                               |  |                   | 19,991    
|Interest income                                                                                        |  |                   | 4,541     
|Miscellaneous income                                                                                   |  |                   | 476       
|Interest expense                                                                                       |  |                   | (180,825  
|Other than temporary decline
    in available-for-sale securities                                      |  |                   | (147,973  
|Total other
    income (expense)                                                                       |  |                   | (379,903  
|Net loss before income taxes                                                                           |  |                   | (1,094,208
|Provision
    for income taxes                                                                         |  |                   | 14,608    
|Net loss before non-controlling
    interest                                                           |  |                   | (1,108,816
|Non-controlling interest                                                                               |  |                   | 5,426     
|Net loss                                                                                               |  |                   | (1,103,390
|Other comprehensive income (loss):                                                                     |  |                   |           
|Unrealized gain (loss) on available-for-sale
    securities (none applies to non-controlling interest) |  |                   | (13,005   
|Foreign translation
    losses                                                                         |  |                   | (6,357    
|Other comprehensive
    loss                                                                           |  | $                 | (1,122,752
|                                                                                                       |  |                   |           
|Net earnings
    (loss) per share, basic and diluted                                                   |  | $                 | (0.47     
|Weighted average shares outstanding                                                                    |  |                   | 2,370,036 



51







Consolidated Statement of Cash Flows

|                                                                                 |  | December 31, 2011 |           
|-------------------------------------------------------------------------------- |  | ----------------- | ----------
|                                                                                 |  | As Previously     |           
|                                                                                 |  | Reported          |           
|Cash flows from operating activities:                                            |  |                   |           
|Net loss                                                                         |  | $                 | (1,103,390
|Adjustments to reconcile net loss to net cash used
    in  operating activities: |  |                   |           
|Other than temporary decline in value of available-for-sale
    securities       |  |                   | 147,973   
|Bad debt expense - related party                                                 |  |                   | 750       
|Non-controlling interest                                                         |  |                   | (5,426    
|Services rendered in exchange for investment securities                          |  |                   | (1,500    
|Depreciation and amortization                                                    |  |                   | 87,617    
|Equity in (earnings) loss of investments                                         |  |                   | 76,113    
|Common stock issued for services                                                 |  |                   | 74,573    
|(Gain) loss on sale of investments                                               |  |                   | (19,991   
|Revaluation of equity investments prior to acquistion                            |  |                   | -         
|Amortization of warrants                                                         |  |                   | 35,247    
|(Increase) decrease in amounts due from affiliate                                |  |                   | (54,217   
|(Increase) decrease in accounts receivable                                       |  |                   | (73,830   
|(Increase) decrease in other receivable                                          |  |                   | -         
|(Increase) decrease in prepaid expenses and other
    assets                     |  |                   | (168,393  
|(Increase) decrease inventory                                                    |  |                   | 5,988     
|Increase (decrease) in accounts payable and accrued
    expenses                 |  |                   | (58,779   
|Increase (decrease) in income taxes payable                                      |  |                   | 14,608    
|Increase (decrease) in deferred revenue                                          |  |                   | (1,750    
|Increase (decrease) in deferred
    rent                                         |  |                   | -         
|Net cash used by operating activities                                            |  |                   | (1,044,407
|                                                                                 |  |                   |           
|Cash flows from investing activities:                                            |  |                   |           
|Proceeds from sale of investments                                                |  |                   | 190,325   
|Investment distribution                                                          |  |                   | 8,140     
|Purchase of investments                                                          |  |                   | (1,285,500
|Franchise cost                                                                   |  |                   | -         
|Acquisition of subsidiaries                                                      |  |                   | (205,000  
|Purchase of property and equipment                                               |  |                   | (388,109  
|Treasury stock proceeds (acquired)                                               |  |                   | 26,400    
|Net cash provided (used) by investing
    activities                             |  |                   | (1,653,744
|                                                                                 |  |                   |           
|Cash flows from financing activities:                                            |  |                   |           
|Proceeds from sale of common stock                                               |  |                   | 500       
|Proceeds from sale of common stock warrants, net                                 |  |                   | 20,608    
|Loan proceeds                                                                    |  |                   | 2,790,000 
|Loan repayment                                                                   |  |                   | (7,036    
|Capital lease payments                                                           |  |                   | -         
|Increase in other liabilities                                                    |  |                   | -         
|Net cash provided by financing activities                                        |  |                   | 2,804,072 
|Effect of exchange rate changes
    on cash                                      |  |                   | -         
|Net increase in cash and cash equivalents                                        |  |                   | 105,921   
|Cash and cash
    equivalents, beginning of year                                 |  |                   | 46,007    
|Cash and
    cash equivalents, end of year                                       |  | $                 | 151,928   



52







| | Item 9: | Changes in
and Disagreements With Accountants on Accounting and Financial Disclosure
| | ------- | ------------------------------------------------------------------------------------



None.



| | Item 9A: | Controls and
Procedures
| | -------- | -----------------------



Evaluation of disclosure controls and procedures



Under the PCAOB standards,
a control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course
of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a deficiency,
or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet
important enough to merit the attention by those responsible for oversight of the company's financial reporting. A material weakness
is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected
on a timely basis.



Under the supervision
and with the participation of our management, including our principal executive officer and principal financial officer, we conducted
an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated
under the Securities Exchange Act of 1934, as amended (Exchange Act), as of December 31, 2011. Our management has determined that,
as of December 31, 2011, the Company's disclosure controls and procedures were ineffective.



In connection with the preparation of
the its annual report for the period ended December 31, 2011, the Company’s management evaluated the effectiveness of the
design and operation of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief
Financial Officer have concluded that our disclosure controls and procedures were ineffective as of December 31, 2011, as a result
of the existence of a material weakness in our internal controls over financial reporting related to the Company’s South
African subsidiaries.



Since September 2012, the Company has
made progress in improving its disclosure controls and procedures. The Company has taken, and are taking, the following actions
to remediate the remaining material weaknesses in our internal control over financial reporting that existed at that date: (i)
appointed a new South African CFO; (ii) improve segregation of duties; and (iii) adopt sufficient written policies and procedures
for accounting and financial reporting.



The Company continues to strive to improve processes to enable
them to provide complete and accurate public disclosure. Management believes they will not be able to conclude that the Company’s
disclosure controls and procedures are effective until the material weaknesses have been fully remediated.



To address the material weaknesses listed
above, management performed analyses and post-closing procedures designed to ensure the Company’s consolidated financial
statements were prepared in accordance with U.S. GAAP. These procedures included documentation and testing of processes, data
validation procedures from the systems into the general ledger, testing of systems, validation of results, disclosure review,
and other analytics. As a result, management believes the consolidated financial statements included in this report fairly present,
in all material respects, our financial position, results of operations and cash flows for the period ended December 31, 2011.



53







Management's report on internal control
over financial reporting



Management of the
Company is responsible for establishing and maintaining effective internal control over financial reporting, as defined in Rule
13a-15(f) under the Exchange Act. The Company's internal control over financial reporting is designed to provide reasonable assurance
to the Company's management and Board of Directors regarding the preparation and fair presentation of published financial statements
in accordance with the United States' generally accepted accounting principles (US GAAP), including those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
disposition of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with US GAAP and that receipts and expenditures are being made only in accordance
with authorizations of management and directors of the Company, and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on
the financial statements.



Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.



Under the supervision
and with the participation of our management, including our chief executive officer and our chief financial officer, we conducted
an evaluation of the effectiveness of our internal control over financial reporting based on the framework established by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) as set forth in its Internal Control - Integrated Framework.
Based on our evaluation under the framework in Internal Control - Integrated Framework, our management has concluded that our
internal control over financial reporting were ineffective as of December 31, 2011.



| | Item 9B: | Other Information
| | -------- | -----------------



Not applicable.



54







PART III



| | Item 10: | Directors,
Executive Officers AND CORPORATE GOVERNANCE
| | -------- | ------------------------------------------------------



The following section sets forth the names,
ages and current positions with the Company held by the Directors, Executive Officers and Significant Employees as of December
31, 2011; together with the year such positions were assumed. There is no immediate family relationship between or among any of
the Directors, Executive Officers or Significant Employees, and the Company is not aware of any arrangement or understanding between
any Director or Executive Officer and any other person pursuant to which he was elected to his current position.



Each Director and Executive Officer will
serve until he or she resigns or is removed or otherwise disqualified to serve or until his or her successor is elected. The Company
currently has five Directors.



|NAME              | AGE | POSITION                                   
|----------------- | --- | -------------------------------------------
|                  |     |                                            
|Michael D. Pruitt | 51  | President, CEO and Director since June 2005
|                  |     |                                            
|Michael Carroll   | 63  | Independent Director since June 2005       
|                  |     |                                            
|Brian Corbman     | 36  | Independent Director since August 2005     
|                  |     |                                            
|Paul I. Moskowitz | 55  | Independent Director since April 2007      
|                  |     |                                            
|Keith Johnson     | 54  | Independent Director since November 2009   



Michael D. Pruitt

Michael
Pruitt, a long-time entrepreneur with a proven track record, possesses the expertise to evaluate potential investments, form
key relationships and recognize a strong management team.  Mr. Pruitt founded Avenel Financial Group, a boutique financial
services firm concentrating on emerging technology company investments.  The business succeeded immediately, and in order
to grow Avenel Financial Group to its full potential and better represent the company's ongoing business model, he formed Avenel
Ventures, an innovative technology investment and private venture capital firm.  In the late 1980s, Mr. Pruitt owned Southern
Cartridge, Inc., which he eventually sold to MicroMagnetic, Inc., where he continued working as Executive Vice President and a
Board member until Southern Cartridge was sold to Carolina Ribbon in 1992.  From 1992 to 1996, Mr. Pruitt worked in a trucking
firm where he was instrumental in increasing revenues from $6 million to $30 million.  The firm was sold in 1996 to Priority
Freight Systems.  Between 1997 and 2000, Mr. Pruitt assisted several public and private companies in raising capital, recruiting
management and preparing companies to go public or be sold.  He was the CEO, President and Chairman of the Board of
Onetravel Holdings, Inc. (formerly RCG Companies), a publicly traded holding company formerly listed on the AMEX.  Mr. Pruitt received
a Bachelor of Arts degree from Coastal Carolina University in Conway, South Carolina, where he sits on the Board of Visitors of
the Wall School of Business. Mr. Pruitt is currently a director of North American Energy Resources, Inc. and
CEO and director of Efftec International, Inc.



Michael Carroll

Michael Carroll currently
owns and operates a sales and training consulting firm based in Richmond, Virginia. Mr. Carroll has also served as a director
for OneTravel Holdings, Inc., formerly RCG Companies Incorporated, since January of 2004. He previously spent 22 years in the
distribution business, 19 of which were in computer products distribution. In 1978, Mr. Carroll founded MicroMagnetic, Inc., a
computer supply distribution company that he sold to Corporate Express in 1997. From 1997 to 1999, he was a division president
at Corporate Express, a publicly traded business-to-business office products and service provider. He holds a Bachelor’s
Degree in Business Management from The College of William & Mary in Williamsburg, Virginia, and a Master’s Degree in
Business Administration from Virginia Commonwealth University.



55







Brian Corbman

Brian Corbman is the managing director
of Ardent Advisors, a consulting company he co-founded in 2003, that specializes in business strategy and corporate advisory services
for emerging growth companies. Mr. Corbman is in the process of becoming an Officer of Supervisory Jurisdiction under the Westor
Capital broker dealer umbrella and services buy-side institutional investors via equity research, institutional trading execution
and investment banking activities. Previously, he was an institutional salesman at Fulcrum Global Partners and Banc of America
Securities. Prior to that, he gained valuable corporate experience working for GSI Commerce, a publicly traded company, where
he was the sole corporate development analyst. A Magna Cum Laude graduate of George Washington University in Washington, DC, he
holds a Bachelor’s degree in Business Administration. Mr. Corbman has also attained the NASD general securities principal
Series 24, Series 7 and Series 63 licenses.



Paul I. Moskowitz

Paul Moskowitz is
a Phi Beta Kappa of Vassar College and Cardozo Law School. Mr. Moskowitz was a co-founder and partner of a successful New York
law firm specializing in corporate and real estate law. He became affiliated with The World Travel Specialist Group/The Lawyers’
Travel Service (“WTSG/LTS”) in 1988 and served as corporate counsel, representing the growing travel agency network
in legal, real estate, and other business activities. In 1989, he joined WTSG full time as President and Chief Operating Officer
until March 2003, with his primary responsibilities including day-to-day operations which encompassed WTSG’s airline relationships
and sales and marketing. Mr. Moskowitz led the growth of WTSG to one of the top 20 U.S. travel management firms with more than
90 offices throughout the U.S. Mr. Moskowitz is currently engaged as a consultant for another travel organization.



Keith Johnson

Mr. Johnson currently
serves as President of Efficiency Technologies, Inc., the wholly owned operating subsidiary of Efftec International, Inc. Prior
to that he was the President and Chief Executive Officer of YRT2 (Your Residential Technology Team) in Charlotte, North Carolina,
from 2004 until May 2010. Mr. Johnson served as Executive Vice President and Chief Financial Officer of The Telemetry Company
in Dallas, Texas (1997-2004), Senior Vice President - Finance and Administration of Brinks Home Security in Dallas, Texas (1995-1997),
and Chief Financial Officer of BAX Global in London, England (1992-1995). Mr. Johnson has a BS in accounting from Fairfield University
in Fairfield, Connecticut.



We believe that each
of our directors’ experience in business and financial matters qualifies them to serve as one of our directors.



Audit
Committee



We have a separately
designated standing audit committee established in accordance with Section 3 (a)(58)(A) of the Exchange Act, which is currently
made up of Mr. Johnson and Mr. Corbman. The Board of Directors has determined that Keith Johnson meets the requirements of a financial
expert and serves as Chairman of the Audit Committee. Mr. Johnson is independent as specified in Item 7 (d)(3)(iv) of Schedule
14A under the Exchange Act.



The primary responsibility
of the Audit Committee is to oversee our financial reporting process on behalf of the Board of Directors and report the result
of their activities to the Board. Such responsibilities shall include, but shall not be limited to, the selection and, if necessary,
the replacement of our independent auditors and review and discussion with such independent auditors of (i) the overall scope
and plans for the audit, (ii) the adequacy and effectiveness of the accounting and financial controls, including our system to
monitor and manage business risks, and legal and ethical programs, and (iii) the results of the annual audit, including the financial
statements to be included in our annual report on Form 10-K. In this regard, the Audit Committee has:

| | · | Reviewed
                                                                                                              and discussed the
                                                                                                              audited financial
                                                                                                              statements with
                                                                                                              management;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Discussed
                                                                                                              with the independent
                                                                                                              auditors the matters
                                                                                                              required to be discussed
                                                                                                              by the statement
                                                                                                              on Auditing Standards
                                                                                                              No. 61, as amended
                                                                                                              and as adopted by
                                                                                                              the Public Company
                                                                                                              Accounting Oversight
                                                                                                              Board in Rule 3200T;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Received
                                                                                                              the written disclosures
                                                                                                              and the letter from
                                                                                                              the independent
                                                                                                              accountant required
                                                                                                              by applicable requirements
                                                                                                              of the Public Company
                                                                                                              Accounting Oversight
                                                                                                              Board regarding
                                                                                                              the independent
                                                                                                              accountant's communications
                                                                                                              with the audit committee
                                                                                                              concerning independence,
                                                                                                              and has discussed
                                                                                                              with the independent
                                                                                                              accountant the independent
                                                                                                              accountant's independence;
                                                                                                              and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Based
                                                                                                              on the review and
                                                                                                              discussions referred
                                                                                                              to in the first
                                                                                                              three items, has
                                                                                                              recommended to the
                                                                                                              board of directors
                                                                                                              that the audited
                                                                                                              financial statements
                                                                                                              be included in the
                                                                                                              Company's annual
                                                                                                              report on Form 10-K
                                                                                                              for the last fiscal
                                                                                                              year for filing
                                                                                                              with the Commission.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



56







Compliance
With Section 16(a) Of The Exchange Act



Section 16(a) of
the Securities Exchange Act of 1934, as amended, requires our executive officers, directors and persons who own more than ten
percent of our common stock to file initial reports of ownership and changes in ownership with the SEC. Additionally, SEC regulations
require that we identify any individuals for whom one of the referenced reports was not filed on a timely basis during the most
recent fiscal year or prior fiscal years. To the best of our knowledge, based solely on a review of reports furnished to us, each
of the Directors, Officers and 10% Shareholders timely filed any required Form 4’s during fiscal 2011.



CODE OF ETHICS



The Board of Directors
of the Company adopted a Code of Ethics which was effective May 23, 2005, which was filed as Exhibit 14 to the Company’s
Form 10-K/A dated December 31, 2007. A copy of this document is available on our website at www.chanticleerholdings.com,
free of charge, under the Corporate Governance Investors section.



NOMINATING COMMITTEE



We do not currently
have a standing nominating committee, or a committee performing similar functions. The full Board of Directors currently serves
this function.



| | Item 11: | Executive
Compensation
| | -------- | ----------------------



The Compensation
Committee of the Board of Directors deliberates executive compensation matters to the extent they are not delegated to the Chief
Executive Officer.



| | a. | Summary Compensation Table
| | -- | --------------------------



The following table
shows the compensation of the Company’s Chief Executive Officer and each executive officer whose total cash compensation
exceeded $100,000 for the two years ended December 31, 2011.



Annual
Compensation



|Name and Principal Position  |  | Year |      |  | Salary |   |         | Bonus |  |   | Total | 
|---------------------------- |  | ---- | ---- |  | ------ | - | ------- | ----- |  | - | ----- | 
|                             |  |      |      |  |        |   |         |       |  |   |       | 
|Michael D. Pruitt (CEO since |  |      | 2011 |  |        | $ | 168,000 |       |  | $ | -     | 
|June 2005)                   |  |      | 2010 |  |        | $ | 154,000 |       |  | $ | -     | 



Required columns
for stock awards, option awards, non-entity incentive plan compensation, change in pension value and nonqualified deferred compensation
earnings and all other compensation are omitted from the table above as the amounts are all zero.



| | b. | Compensation of directors
| | -- | -------------------------



The Company did not
compensate its directors in 2011.



The Company intends
to pay its Executives and Directors salaries, wages or fees commensurate with experience and industry standards in relationship
to the success of the Company.



57







| | Item 12: | Security Ownership
of Certain Beneficial Owners and Management and Related Stockholder Matters
| | -------- | ----------------------------------------------------------------------------------------------



SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS



The following table indicates all persons
who, as of February 29, 2012, the most recent practicable date, are known by us to own beneficially more than 5% of any class
of our outstanding voting securities. As of February 29, 2012, there were 3,012,121 shares of our common stock issued and 2,498,891
shares of our common stock outstanding. The calculations below are based on the number of shares issued, which includes treasury
stock of 513,230 shares. Except as otherwise indicated below, to the best of our knowledge, each person named in the table has
sole voting and investment power with respect to the securities beneficially owned by them as set forth opposite their name.



|               |  | Name and Address of               |  | Amount and Nature of |         |  |            | 
|-------------- |  | --------------------------------- |  | -------------------- | ------- |  | ---------- | 
|Title of Class |  | Beneficial Owner                  |  | Beneficial Owner     |         |  | % of Class | 
|               |  |                                   |  |                      |         |  |            | 
|Common         |  | Sandor Capital Master Fund LP (1) |  |                      | 298,200 |  |            | 
|               |  |                                   |  |                      |         |  |            | 
|Common         |  | Robert B. Prag (2)                |  |                      | 298,200 |  |            | 



| | (1) | John S. Lemak has investment and voting
                                                            control over the securities held by Sandor Capital Master Fund LP.
                                                            Sandor maintains principal offices at 2828 Routh Street, Suite 500,
                                                            Dallas, TX 75201. The amounts set forth in the table include 174,772
                                                            shares of common stock owned by Sandor, 24,700 shares of common stock
                                                            owned by John S. Lemak and 98,728 shares of common stock underlying
                                                            Class A Warrants owned by Sandor. The amounts set forth in the table
                                                            exclude additional shares underlying Class A Warrants and Class B
                                                            Warrants owned by Sandor and John S. Lemak, which warrants limit exercise
                                                            to that number of shares that, when aggregated with the holder’s
                                                            existing ownership of the Company’s common stock, would result
                                                            in such holder, together with related persons or entities, owning
                                                            more than 9.9% of the Company’s issued and outstanding common
                                                            stock. This information is based solely on information in Schedule
                                                            13G.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Mr. Prag's address is 2455 El Amigo
                                                            Road, Del Mar, CA 92014. The amounts set forth in the table include
                                                            152,000 shares of common stock owned by Mr. Prag, 28,000 shares of
                                                            common stock owned by Del Mar Consulting Group, Inc. Retirement Plan
                                                            Trust 9with respect to which Mr. Prag serves as Trustee), and 115,000
                                                            shares of common stock underlying Class A Warrants and Class B Warrants
                                                            owned by Mr. Prag and Del Mar Consulting Group, Inc. Retirement Plan
                                                            Trust, which warrants limit exercise to that number of shares that,
                                                            when aggregated with the holder’s existing ownership of the
                                                            Company’s common stock, would result in such holder, together
                                                            with related persons or entities, owning more than 9.9% of the Company’s
                                                            issued and outstanding common stock. This information is based solely
                                                            on information in Schedule 13G.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Security
Ownership of Management



The following table indicates the beneficial
ownership of our voting securities of all Directors of the Company and all Executive Officers who are not Directors of the Company,
and all officers and directors as a group, as of February 29, 2012, the most recent practicable date. As of February 29, 2012,
there were 3,012,121 shares of our common stock issued and 2,498,891 shares of our common stock outstanding. The calculations
below are based on the number of shares issued, which includes treasury stock of 513,230 shares. Except as otherwise indicated
below, to the best of our knowledge, each person named in the table has sole voting and investment power with respect to the securities
beneficially owned by them as set forth opposite their name. All options are currently exercisable, unless otherwise indicated.



58







|               |  | Name and Address of             |  | Amount and Nature of |         |  |            | 
|-------------- |  | ------------------------------- |  | -------------------- | ------- |  | ---------- | 
|Title of Class |  | Beneficial Owner                |  | Beneficial Owner     |         |  | % of Class | 
|               |  |                                 |  |                      |         |  |            | 
|Common         |  | Michael D. Pruitt (1)           |  |                      | 404,610 |  |            | 
|               |  | 11220 Elm Lane, Suite 203       |  |                      |         |  |            | 
|               |  | Charlotte, NC 28277             |  |                      |         |  |            | 
|               |  |                                 |  |                      |         |  |            | 
|Common         |  | Michael Carroll (2)             |  |                      | 33,000  |  |            | 
|               |  | 11220 Elm Lane, Suite 203       |  |                      |         |  |            | 
|               |  | Charlotte, NC 28277             |  |                      |         |  |            | 
|               |  |                                 |  |                      |         |  |            | 
|Common         |  | Paul I. Moskowitz (2)           |  |                      | 18,600  |  |            | 
|               |  | 11220 Elm Lane, Suite 203       |  |                      |         |  |            | 
|               |  | Charlotte, NC 28277             |  |                      |         |  |            | 
|               |  |                                 |  |                      |         |  |            | 
|Common         |  | Brian Corbman (2)               |  |                      | 33,100  |  |            | 
|               |  | 11220 Elm Lane, Suite 203       |  |                      |         |  |            | 
|               |  | Charlotte, NC 28277             |  |                      |         |  |            | 
|               |  |                                 |  |                      |         |  |            | 
|Common         |  | Keith Johnson (2)               |  |                      | 6,000   |  |            | 
|               |  | 11220 Elm Lane, Suite 203       |  |                      |         |  |            | 
|               |  | Charlotte, NC 28277             |  |                      |         |  |            | 
|               |  |                                 |  |                      |         |  |            | 
|Common         |  | All officers and directors as a |  |                      | 495,310 |  |            | 
|               |  | Group (5 persons)               |  |                      |         |  |            | 



| | * | Less than 1%.
| | - | -------------



| | (1) | Includes 62,680 shares of common
                                                                  stock held by Avenel Financial Group, Inc., a corporation controlled
                                                                  by Mr. Pruitt. The amounts set forth in the table exclude additional
                                                                  shares underlying Class A Warrants and Class B Warrants owned
                                                                  by Mr. Pruitt and Avenel Financial Group, Inc., which warrants
                                                                  limit exercise to that number of shares that, when aggregated
                                                                  with the holder’s existing ownership of the Company’s
                                                                  common stock, would result in such holder, together with related
                                                                  persons or entities, owning more than 9.9% of the Company’s
                                                                  issued and outstanding common stock.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Includes Class A and Class B
                                                                  warrants as follows.
| | --- | -------------------------------------------------------------------------------------------------------------------

|                  |  | Shares |        |  | Class A  |  |        | Class B  |  |  |        | 
|----------------- |  | ------ | ------ |  | -------- |  | ------ | -------- |  |  | ------ | 
|                  |  | Owned  |        |  | Warrants |  |        | Warrants |  |  | Total  | 
|                  |  |        |        |  |          |  |        |          |  |  |        | 
|Michael Carroll   |  |        | 11,000 |  |          |  | 11,000 |          |  |  | 11,000 | 
|Brian Corbman     |  |        | 11,100 |  |          |  | 11,000 |          |  |  | 11,000 | 
|Paul I. Moskowitz |  |        | 6,200  |  |          |  | 6,200  |          |  |  | 6,200  | 
|Keith Johnson     |  |        | 2,000  |  |          |  | 2,000  |          |  |  | 2,000  | 



Equity
Compensation Plan Information



We do not currently
have an equity compensation plan.



| | Item 13: | Certain Relationships
and Related Transactions, AND DIRECTOR INDEPENDENCE
| | -------- | -------------------------------------------------------------------------



Due to related parties



The Company has received
non-interest bearing loans and advances from related parties. The amounts owed by the Company as of December 31, 2011 and 2010
are as follows:



59







|                           |  | 2011 |        |  | 2010 |  
|-------------------------- |  | ---- | ------ |  | ---- | -
|                           |  |      |        |  |      |  
|Hoot SA III, LLC           |  | $    | -      |  |      | $
|Hoot SA I, LLC             |  |      | 15,409 |  |      |  
|Chanticleer Foundation     |  |      | 10,750 |  |      |  
|Chanticleer Investors, LLC |  |      | 4,045  |  |      |  
|Avenel Financial Group     |  |      | -      |  |      |  
|                           |  | $    | 30,204 |  |      | $



Due from related parties



The Company has earned
income from and made advances to related parties. The amounts owed to the Company at December 31, 2011 and 2010 is as follows:



|                                |  | 2011 |        |  | 2010 |  
|------------------------------- |  | ---- | ------ |  | ---- | -
|                                |  |      |        |  |      |  
|Chanticleer Investors II, LLC   |  | $    | 1,485  |  |      | $
|Chanticleer Investors, LLC      |  |      | -      |  |      |  
|Chanticleer Dividend Fund, Inc. |  |      | 74,281 |  |      |  
|Hoot SA II, LLC                 |  |      | 825    |  |      |  
|Other                           |  |      | -      |  |      |  
|                                |  | $    | 76,591 |  |      | $



Management income from affiliates



The Company had management income from
its affiliates in 2011 and 2010, as follows:



|                                      |  | 2011 |       |  | 2010 |  
|------------------------------------- |  | ---- | ----- |  | ---- | -
|                                      |  |      |       |  |      |  
|Chanticleer Investors, LLC            |  | $    | -     |  |      | $
|Chanticleer Investors II, LLC         |  |      | 1,485 |  |      |  
|Efftec International, Inc.            |  |      | -     |  |      |  
|North American Energy Resources, Inc. |  |      | 1,750 |  |      |  
|                                      |  | $    | 3,235 |  |      | $



Chanticleer Investors LLC



Investors LLC collected
its note receivable and reinvested $3,550,000 in HOA LLC (See Note 4). The Company received $26,500 in management income from
Investors LLC in 2010, before the investment in HOA LLC was completed. There was no management income from Investors LLC in 2011.



Chanticleer Investors II LLC



The Company manages
Investors II and earned management income of $1,485 and $57,718 ($46,547 was collected March 15, 2011 and $11,171 was collected
in 2010) in 2011 and 2010, respectively.



Chanticleer Dividend Fund, Inc. ("CDF")



On November 10, 2010
the Company formed CDF under the general corporation laws of the State of Maryland. CDF filed a registration statement under Form
N-2 to register as a non-diversified, closed-end investment company in January 2011. The Company, through Advisors, will have
a role in management of CDF when its registration statement becomes effective.



60







Hoot SA, LLC; Hoot SA II, LLC; and
Hoot SA III, LLC



The Hoot partnerships
were formed to help finance the first three Hooters restaurants in South Africa.



Efftec International, Inc. ("Efftec")



The Company's CEO
became CEO and the sole director of Efftec during 2010 and the Company received 150,000 common shares and an option to acquire
150,000 shares for management services. The shares and option were initially valued at $22,500, based on the trading price of
Efftec at the time.



North American Energy Resources, Inc.
("NAEY")



The Company's CEO
became CEO and a director of NAEY during 2010 and the Company received 150,000 common shares for management services. The shares
were valued at $10,500, based on the trading price of NAEY at the time. The Company's CEO resigned as CEO of NAEY in December
2010 and remains a director.



During June 2011,
the Company’s CEO contributed 1,790,440 shares of NAEY to the Company which was valued at $125,331 based on the trading
price at the time. Mr. Pruitt did not receive additional compensation as a result of the transfer. At December 31, 2011, the Company
recorded unrealized appreciation of $89,522 based on a market value of $214,853.



Chanticleer Foundation, Inc.



Chanticleer Foundation,
Inc. is a Donor-Advised Fund whose governing body consists of Mr. Pruitt, a director of the Company and an employee of the Company.
The Foundation loaned the Company $10,750 during 2011.



Avenel Financial Group, Inc.



Avenel Financial
Group, Inc. is a company owned by Mr. Pruitt. Advances previously made to the Company were repaid during 2011.



Other



The Company acquired
trading securities from a related party for $26,334 which were sold for $32,917 in 2010.



Director Independence



We undertook a review
of the independence of our directors and, using the definitions and independence standards for directors provided in the rules
of The Nasdaq Stock Market, although not required as the standard for the Company as it is traded on the Over-the-Counter Market
considered whether any director has a material relationship with us that could interfere with his ability to exercise independent
judgment in carrying out his responsibilities. As a result of this review, we determined that Michael Carroll, Brian Corbman,
Paul Moskowitz and Keith Johnson are "independent directors" as defined under the rules of The Nasdaq Stock Market.



| | Item 14: | Principal
Accountant Fees and Services
| | -------- | --------------------------------------



AUDIT FEES: For the
fiscal years ended December 31, 2011 and 2010, Creason & Associates, P.L.L.C. billed the Company for services rendered through
March 16, 2012, for the audit of the Company’s financial statements included in its report on Form 10-K and the reviews
of the financial statements included in its reports on Form 10-Q filed with the SEC as follows (the 2011 period will not include
all billings for the audit):



|                          |  | 2011 |        |  | 2010 |  
|------------------------- |  | ---- | ------ |  | ---- | -
|                          |  |      |        |  |      |  
|Audit and review services |  | $    | 53,000 |  |      | $



61







AUDIT RELATED FEES: None.



TAX FEES: Not applicable.



OTHER FEES: None.



The Audit Committee
reviews, and in its sole discretion pre-approves, our independent registered public accounting firm’s annual engagement
letter, including proposed fees and all audit and non-audit services provide by the independent registered public accounting firm.
All services described above were pre-approved by our Audit Committee. The Board may not engage the independent registered public
accounting firm to perform non-audit services proscribed by law or regulation.



62







Part
IV



| | Item 15: | Exhibits and
Financial Statement Schedules
| | -------- | ------------------------------------------



| | (a) | The following documents are filed
                                                               as part of this report:
| | --- | ------------------------------------------------------------------------------------------------------------------------

| | 1. | Financial Statements – The
                                                             following financial statements of Chanticleer Holdings, Inc. are
                                                             contained in Item 8 of this Form 10-K/A:
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Report
                                                                                                                  of Independent
                                                                                                                  Registered Public
                                                                                                                  Accounting Firms
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Consolidated
                                                                                                                  Balance Sheets
                                                                                                                  at December
                                                                                                                  31, 2011 and
                                                                                                                  2010
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Consolidated
                                                                                                                  Statements of
                                                                                                                  Operations –
                                                                                                                  For the years
                                                                                                                  ended December
                                                                                                                  31, 2011 and
                                                                                                                  2010
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Consolidated
                                                                                                                  Statements of
                                                                                                                  Stockholders’
                                                                                                                  Equity at December
                                                                                                                  31, 2011 and
                                                                                                                  2010
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Consolidated
                                                                                                                  Statements of
                                                                                                                  Cash Flows –
                                                                                                                  For the years
                                                                                                                  ended December
                                                                                                                  31, 2011 and
                                                                                                                  2010
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Notes
                                                                                                                  to the Consolidated
                                                                                                                  Financial Statements
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Financial Statement Schedules were
                                                             omitted, as they are not required or are not applicable, or the required
                                                             information is included in the Financial Statements.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | Exhibits – The following exhibits
                                                             are filed with this report or are incorporated herein by reference
                                                             to a prior filing, in accordance with Rule 12b-32 under the Securities
                                                             Exchange Act of 1934.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Exhibit |  | Description                                                                                                                                                   
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  |                                                                                                                                                               
|3.1(a)  |  | Certificate of Incorporation (2)                                                                                                                              
|3.1(b)  |  | Certificate of Merger, filed May 2, 2005 (3)                                                                                                                  
|3.1(c)  |  | Certificate of Amendment, filed July 16, 2008                                                                                                                 
|3.1(d)  |  | Certificate of Amendment, filed March 18, 2011 (4)                                                                                                            
|3.2     |  | Bylaws (2)                                                                                                                                                    
|4.1     |  | Form of Common Stock Certificate (5)                                                                                                                          
|4.2     |  | Form of Unit Certificate (1)                                                                                                                                  
|4.3     |  | Form of Warrant Certificate (1)                                                                                                                               
|4.4     |  | Form of Warrant Agreement (1)                                                                                                                                 
|4.5     |  | Form of Representative’s Warrant (1)                                                                                                                          
|10.1    |  | Revolving Credit Facility dated August 10, 2011 between the Company and Paragon Commercial Bank (5)                                                           
|10.2    |  | Form of Franchise Agreement between the Company and Hooters of America, LLC (5)                                                                               
|21      |  | Subsidiaries                                                                                                                                                  
|        |  |                                                                                                                                                               
|31.1    |  | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14
    of the Securities Exchange Act of 1934                   
|        |  |                                                                                                                                                               
|32.1    |  | Certification of the Chief Executive Officer and Chief Financial Officer
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350



| | (1) | Incorporated by reference to the Registration Statement on Form S-1 filed on February 3, 2012.         
| | --- | -------------------------------------------------------------------------------------------------------
| | (2) | Incorporated by reference to the Registration Statement on Form 10-SB filed on February 15, 2000.      
| | (3) | Incorporated by reference from Exhibit 2.1 to the Quarterly Report on Form 10-Q, filed August 15, 2011.
| | (4) | Incorporated by reference from Exhibit 3.1 to the Current Report on Form 8-K, filed on March 18, 2011. 
| | (5) | Incorporated by reference to the Registration Statement on Form S-1 filed on December 2, 2011.         



63







SIGNATURES



Pursuant to the requirements
of Section 13 or 15(d) 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 on December 4, 2012.



| | CHANTICLEER HOLDINGS, INC.
| | --------------------------



| | By: | /s/ Michael D. Pruitt      
| | --- | ---------------------------
| |     | Michael D. Pruitt, Chairman
| |     | and Chief Executive Officer



Pursuant to the requirements
of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant
in the capacities and on the dates indicated.



|Date             | Title (Capacity)                      | Signature            
|---------------- | ------------------------------------- | ---------------------
|                 |                                       |                      
|December 4, 2012 | Chairman, Chief Executive Officer,    | /s/ Michael D. Pruitt
|                 |                                       | Michael D. Pruitt    
|                 |                                       |                      
|December 4, 2012 | Chief Financial Officer and Principal | /s/ Eric S. Lederer  
|                 | Accounting Officer                    | Eric S. Lederer      
|                 |                                       |                      
|December 4, 2012 | Director                              | /s/ Michael Carroll  
|                 |                                       | Michael Carroll      
|                 |                                       |                      
|December 4, 2012 | Director                              | /s/ Brian Corbman    
|                 |                                       | Brian Corbman        
|                 |                                       |                      
|December 4, 2012 | Director                              | /s/ Paul I. Moskowitz
|                 |                                       | Paul I. Moskowitz    
|                 |                                       |                      
|December 4, 2012 | Director                              | /s/ Keith Johnson    
|                 |                                       | Keith Johnson        



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