Annual report pursuant to Section 13 and 15(d)

Nature of Business

Nature of Business
12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Business

1. Nature of Business




Chanticleer Holdings, Inc. (the “Company”) is in the business of owning, operating and franchising fast casual dining concepts domestically and internationally. The Company was organized October 21, 1999, under its original name, Tulvine Systems, Inc., under the laws of the State of Delaware. On April 25, 2005, Tulvine Systems, Inc. formed a wholly owned subsidiary, Chanticleer Holdings, Inc., and on May 2, 2005, Tulvine Systems, Inc. merged with, and changed its name to, Chanticleer Holdings, Inc.


The consolidated financial statements include the accounts of Chanticleer Holdings, Inc. and its subsidiaries presented below (collectively referred to as the “Company”):


Name   Jurisdiction of Incorporation   Percent Owned  
American Roadside Burgers, Inc.   DE, USA     100 %
American Burger Ally, LLC   NC, USA     100 %
American Burger Morehead, LLC   NC, USA     100 %
American Burger Prosperity, LLC   NC, USA     50 %
American Roadside Burgers Smithtown, Inc.   DE, USA     100 %
BGR Acquisition, LLC   NC, USA     100 %
BGR Franchising, LLC   VA, USA     100 %
BGR Operations, LLC   VA, USA     100 %
BGR Acquisition 1, LLC   NC, USA     100 %
BGR Annapolis, LLC   MD, USA     100 %
BGR Arlington, LLC   VA, USA     46 %
BGR Columbia, LLC   MD, USA     100 %
BGR Michigan Ave, LLC   DC, USA     100 %
BGR Mosaic, LLC   VA, USA     100 %
BGR Old Keene Mill, LLC   VA, USA     100 %
BGR Washingtonian, LLC   MD, USA     46 %
Capitol Burger, LLC   MD, USA     100 %
BT Burger Acquisition, LLC   NC, USA     100 %
BT’s Burgerjoint Rivergate LLC   NC, USA     100 %
BT’s Burgerjoint Sun Valley, LLC   NC, USA     100 %
LBB Acquisition, LLC   NC, USA     100 %
Cuarto LLC   OR, USA     100 %
LBB Acquisition 1 LLC   OR, USA     100 %
LBB Hassalo LLC   OR, USA     80 %
LBB Platform LLC   OR, USA     80 %
LBB Capitol Hill LLC   WA, USA     50 %
LBB Franchising LLC   NC, USA     100 %
LBB Green Lake LLC   OR, USA     50 %
LBB Lake Oswego LLC   OR, USA     100 %
LBB Magnolia Plaza LLC   NC, USA     50 %
LBB Multnomah Village LLC   OR, USA     50 %
LBB Progress Ridge LLC   OR, USA     50 %
LBB Rea Farms LLC   NC, USA     50 %
LBB Wallingford LLC   WA, USA     50 %
LBB Downtown PDX LLC   OR, USA     100 %
Noveno LLC   OR, USA     100 %
Octavo LLC   OR, USA     100 %
Primero LLC   OR, USA     100 %
Quinto LLC   OR, USA     100 %
Segundo LLC   OR, USA     100 %
Septimo LLC   OR, USA     100 %
Sexto LLC   OR, USA     100 %
Jantzen Beach Wings, LLC   OR, USA     100 %
Oregon Owl’s Nest, LLC   OR, USA     100 %
West End Wings LTD   United Kingdom     100 %


All significant inter-company balances and transactions have been eliminated in consolidation.




As of December 31, 2019, our cash balance was approximately $500,000, our working capital was negative $16.9 million, and we have significant near-term commitments and contractual obligations. The level of additional cash needed to fund operations and our ability to conduct business for the next twelve months will be influenced primarily by the following factors:


  our ability to access the capital and debt markets to satisfy current obligations and operate the business;
  our ability to refinance or otherwise extend maturities of current debt obligations;
  the level of investment in acquisition of new restaurant businesses and entering new markets;
  our ability to manage our operating expenses and maintain gross margins as we grow;
  popularity of and demand for our fast-casual dining concepts; and
  general economic conditions and changes in consumer discretionary income.


We have typically funded our operating costs, acquisition activities, working capital requirements and capital expenditures with proceeds from the issuances of our common stock and other financing arrangements, including convertible debt, lines of credit, notes payable, capital leases, and other forms of external financing.


As we execute our business plan over the next 12 months, we intend to carefully monitor the impact of growth on our working capital needs and cash balances relative to the availability of cost-effective debt and equity financing. In the event that capital is not available, or we are unable to refinance our debt obligations or obtain waivers, we may then have to scale back or freeze our organic growth plans, sell assets on less than favorable terms, reduce expenses, and/or curtail future acquisition plans to manage our liquidity and capital resources. We may also incur financial penalties or other negative actions from our lenders if we are not able to refinance or otherwise extend or repay our current obligations or obtain waivers. These factors raise substantial doubt about our ability to continue as a going concern.


In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, customers, economies, and financial markets globally, potentially leading to an economic downturn. It has also disrupted the normal operations of many businesses, including ours. It is not possible for us to predict the duration or magnitude of the adverse results of the outbreak and its effects on our business or results of operations at this time. A health pandemic is a disease outbreak that spreads rapidly and widely by infection and affects many individuals in an area or population at the same time. Customers might avoid public gathering places in the event of a health pandemic, and local, regional or national governments might limit or ban public gatherings to halt or delay the spread of disease. The conditions may impact our restaurant customer traffic and our ability to adequately staff our restaurants, receive deliveries on a timely basis or perform functions at the corporate level. We also may be adversely affected if jurisdictions in which we have restaurants impose mandatory closures, seek voluntary closures or impose restrictions on operations. Even if such measures are not implemented, the perceived risk of infection or significant health risk may adversely affect our business.


The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.