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Chanticleer Holdings Reports Asset and Revenue Growth and Improvement in Gross Profit Margins for Q4 and Full Year 2013 Financials

CHARLOTTE, NC--(Marketwired - March 31, 2014) - Chanticleer Holdings, Inc. (NASDAQ: HOTR) ("Chanticleer," or the "Company"), owner and operator of multiple restaurant brands internationally and domestically, announces the release of its 2013 financial results for the fourth quarter and full year ended December 31, 2013.

Highlights:

  • Revenue for the fourth quarter 2013 was $3.3 million, compared with $2.0 million in the comparable period in 2012, an increase of 66.8%. For the full year 2013, revenue was $8.2 million compared with $6.9 million in the comparable period in 2012, an increase of 20.4%. Restaurant revenues were primarily responsible for the increase, including additional revenues from the purchase of American Roadside Burgers (ARB) on September 30, 2013, the purchase of the Nottingham (United Kingdom) Hooters in November 2013, the opening of our fifth South African Hooters location in December 2013, and the purchase of a majority interest in Just Fresh (JF) in December 2013.
  • Restaurant gross profit margins for the fourth quarter 2013 were 63.7% compared with 61.4% in the comparable period in 2012. For the full year 2013, gross profit margins were 62.8% compared with 59.1% in 2012.
  • Restaurant same-store net sales, which we define as those open for more than 18 months, were $3.5 million and $3.9 million for the full year of 2013 and 2012, respectively, a decrease of 10.6%. In South African local currency, same-store net sales for the full year of 2013 compared to 2012 increased 4.9%. Same-store net sales were $0.9 million and $1.0 million in the fourth quarter 2013 and 2012, respectively, a decrease of 8.1%. In South African local currency, same-store net sales for the fourth quarter of 2013 compared to 2012 increased 3.9%.
  • Restaurant operating expenses for the fourth quarter 2013 were $2.1 million, or 63.3% of restaurant revenue, compared with $1.1 million, or 58.7% of restaurant revenue for the year-ago fourth quarter. For the full year 2013, restaurant operating expenses were $4.9 million, or 60.3% of restaurant revenue, compared with $3.8 million, or 56.1% for the full year 2012.
  • General and administrative expenses ("G&A") for the fourth quarter 2013 were $1.9 million, or 58.6% of total revenue, compared with $0.6 million or 32.2% of total revenue in the comparable period in 2012. Full-year 2013 G&A was $4.2 million, or 51.3% of total revenue compared with $2.3 million, or 33.7% of total revenue for the full year 2012. Approximately $1.1 million of the G&A in 2013 was non-cash related to issuing common stock and warrants for services.
  • Restaurant EBITDA for the fourth quarter of 2013 and 2012 was approximately $35,000 and $52,000, respectively, a decrease of 33.5%. The Nottingham Hooters and JF restaurants were not part of the Company for the full fourth quarter of 2013. Restaurant EBITDA for the full year 2013 and 2012 was $229,000 and $205,000, respectively, an increase of 11.6%. Our improved gross margins were offset by an increase in operating expenses, including increased occupancy costs and higher payroll costs. EBITDA is a non-GAAP financial measure -- see "Use of Non-GAAP Measures" below and the attached reconciliation. 
  • Net loss for the fourth quarter 2013 was $2.3 million, a loss of $0.61 per share, compared with $879,000, a loss of $0.24 per share for the 2012 fourth quarter. Net loss for the full year was $5.2 million, a loss of $1.19 per share, compared with $3.2 million, or a loss of $1.13 per share, for the full year 2012. Approximately $1.1 million of the net loss in 2013 was non-cash related to issuing common stock and warrants for services.
  • There were 6,287,365 shares of common stock issued and outstanding as of March 15, 2014.
  • Hooters restaurants - the Company owns all or part of the Hooters franchise rights to develop and operate Hooters restaurants in South Africa, Hungary, Poland, five states of Brazil, and parts of the United Kingdom, and has joint ventured with the existing franchisee in Australia. As of December 31, 2013, there were eight restaurants in these territories. An additional three new locations are expected to open in the coming months: two in Australia and one in Brazil. On January 31, 2014, the Company acquired two existing Hooters locations, one in Portland, Oregon and one in Tacoma, Washington, which are the Company's first U.S. locations.
  • New restaurant brands - the Company owns a majority interest in Just Fresh Restaurants, currently with five locations in the Charlotte, NC area, and a sixth location planned to open on April 11, 2014, inside the BB&T Ballpark, home of the Charlotte Knights AAA baseball team. Chanticleer also owns American Roadside Burgers, Inc., with four locations in the Carolinas and one location in Smithtown, New York. On January 31, 2014, the Company acquired Spoon Bar & Kitchen, a fine dining seafood restaurant operated by Chef John Tesar, located in Dallas, TX.

Mike Pruitt, Chairman and Chief Executive Officer, commented, "We surpassed our goal in 2013 of having 10 restaurants to end the year with 18 locations and we have continued to expand our footprint to include our first two U.S. Hooters restaurants and our recently acquired Spoon Bar & Kitchen. With 21 locations to date, our consolidated net revenues were approximately $1.8 million in February 2014, despite dreadful weather for approximately three days at 11 of our U.S. restaurants, as well as February being a short and historically slow month. We continue to make steady progress in our gross profits and our South African Hooters achieved EBITDA positive results in 2013. I continue to believe we will achieve positive EBITDA for the Company by the fourth quarter of 2014."

"We are excited to see successful penetration of the Hooters brand in our existing territories overseas, with Nottingham giving us great momentum to find new Hooters sites in the United Kingdom. We believe we have a great opportunity to expand our other concepts in both domestic and international markets. We look forward to announcing our first quarter 2014 results with all our new restaurants (Spoon and Hooters Pacific Northwest) integrated for two months of the quarter." 

For full disclosure relating to our year-end financial information, please refer to Chanticleer's Annual Report on Form 10-K, filed with the SEC on March 31, 2014, available online at www.sec.gov.

Use of Non-GAAP Measures
Chanticleer Holdings, Inc. prepares its condensed consolidated financial statements in accordance with United States generally accepted accounting principles ("GAAP"). In addition to disclosing financial results prepared in accordance with GAAP, the company discloses information regarding EBITDA, which differs from the term EBITDA as it is commonly used. In addition to adjusting net income (loss) from continuing operations to exclude taxes, interest, and depreciation and amortization, EBITDA also excludes pre-opening costs for our restaurants, non-cash expenses for services, change in fair value of derivative liability and gain on extinguishment of debt. EBITDA is not a measure of performance defined in accordance with GAAP. However, EBITDA is used internally in planning and evaluating the company's operating performance. Accordingly, management believes that disclosure of this metric offers investors, bankers and other stakeholders an additional view of the company's operations that, when coupled with the GAAP results, provides a more complete understanding of the company's financial results.

EBITDA should not be considered as an alternative to net loss or to net cash used in operating activities as a measure of operating results or of liquidity. It may not be comparable to similarly titled measures used by other companies, and it excludes financial information that some may consider important in evaluating the company's performance. A reconciliation of GAAP net income (loss) to EBITDA is included in the accompanying financial schedules.

About Chanticleer Holdings, Inc.
Headquartered in a Charlotte, NC, Chanticleer Holdings, Inc. (HOTR), together with its subsidiaries, owns and operates restaurant brands in the United States and internationally. The Company is a franchisee owner of Hooters® restaurants in international markets including England, South Africa, Hungary, and Brazil and has joint ventured with the current Hooters franchisee in Australia. The Company also owns and operates American Roadside Burgers, Spoon Bar & Kitchen and owns a majority interest in Just Fresh restaurants in the U.S. 
For further information, please visit www.chanticleerholdings.com 
Facebook: www.Facebook.com/ChanticleerHOTR
Twitter: http://Twitter.com/ChanticleerHOTR
Google+: https://plus.google.com/u/1/b/118048474114244335161/118048474114244335161/posts

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify these forward-looking statements by the words "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "target," "aim," "expect," "believe," "intend," "may," "will," "should," "could," or the negative of these words and other comparable words. Forward-looking statements are based on expectations, forecasts, and assumptions by our management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those stated, including, without limitation:

  • Operating losses continuing for the foreseeable future; we may never be profitable;
  • Inherent risks in expansion of operations, including our ability to acquire additional territories, generate profits from new restaurants, find suitable sites and develop and construct locations in a timely and cost-effective way;
  • General risk factors affecting the restaurant industry, including current economic climate, costs of labor and food prices;
  • Intensive competition in our industry and competition with national, regional chains and independent restaurant operators;
  • Our rights to operate and franchise Hooters-branded restaurants are dependent on the Hooters' franchise agreements;
  • Our business depends on our relationship with Hooters;
  • We do not have full operational control over the businesses of our franchise partners;
  • Failure by Hooters to protect its intellectual property rights, including its brand image;
  • Our business has been adversely affected by declines in discretionary spending and may be affected by changes in consumer preferences;
  • Increases in costs, including food, labor and energy prices;
  • Our business and the growth of our Company is dependent on the skills and expertise of management and key personnel;
  • Constraints could effect our ability to maintain competitive cost structure, including, but not limited to labor constraints;
  • Work stoppages at our restaurants or supplier facilities or other interruptions of production;
  • Our food service business and the restaurant industry are subject to extensive government regulation;
  • We may be subject to significant foreign currency exchange controls in certain countries in which we operate;
  • Inherent risk in foreign operation;
  • We may not attain our target development goals and aggressive development could cannibalize existing sales;
  • Current conditions in the global financial markets and the distressed economy;
  • A decline in market share or failure to achieve growth;
  • Unusual or significant litigation, governmental investigations or adverse publicity, or otherwise;
  • Adverse effects on our operations resulting from the current class action litigation in which the Company is one of several defendants;
  • Adverse effects on our results from a decrease in or cessation or clawback of government incentives related to investments; and
  • Adverse effects on our operations resulting from certain geo-political or other events.

Chanticleer cannot be certain that any expectation, forecast, or assumption made in preparing any forward-looking statements will prove accurate, or that any projection will be realized. It is to be expected that there will be differences between projected and actual results. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its web site or otherwise. We undertake no obligation to update the forward-looking statements provided to reflect events or circumstances that occur after the date on which they were made. Further information on our business, including important factors which could affect actual results are discussed in the Company's filings with the SEC, including its Annual Report on Form 10-K under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

                                                                            
                                                                            
                Chanticleer Holdings, Inc. and Subsidiaries                 
                        Consolidated Balance Sheets                         
                         December 31, 2013 and 2012                         
                                                                            
                                                     2013          2012     
                                                 ------------  ------------ 
                     ASSETS                                                 
Current assets:                                                             
  Cash                                           $    442,694  $  1,223,803 
  Accounts receivable                                 227,181       161,073 
  Other receivable                                     50,380        85,473 
  Inventories                                         381,408       227,023 
  Due from related parties                            116,305       117,899 
  Prepaid expenses                                    494,241       170,769 
  Assets of discontinued operations                       924        44,335 
                                                 ------------  ------------ 
    TOTAL CURRENT ASSETS                            1,713,133     2,030,375 
Property and equipment, net                         5,620,189     2,316,146 
Goodwill                                            6,496,756       396,487 
Intangible assets, net                              3,424,632       559,832 
Investments at fair value                              55,112        56,949 
Other investments                                   2,491,963     2,116,915 
Deposits and other assets                             285,821       169,727 
                                                 ------------  ------------ 
    TOTAL ASSETS                                 $ 20,087,606  $  7,646,431 
                                                 ============  ============ 
                                                                            
      LIABILITIES AND STOCKHOLDERS' EQUITY                                  
Current liabilities:                                                        
  Current maturities of long-term debt and notes                            
   payable                                       $    700,168  $    236,110 
  Derivative liability                              2,146,000             - 
  Accounts payable and accrued expenses             2,424,373     1,108,305 
  Other current liabilities                           135,286       361,586 
  Current maturities of capital leases payable         59,162        27,965 
  Deferred rent                                        53,303        10,825 
  Due to related parties                               12,191        13,733 
  Liabilities of discontinued operations                1,500        14,328 
                                                 ------------  ------------ 
    TOTAL CURRENT LIABILITIES                       5,531,983     1,772,852 
Convertible notes payable, net of discount of                               
 $2,583,333                                           416,667             - 
Capital leases payable, less current maturities       105,918        60,518 
Deferred rent                                       1,055,138        98,448 
Deferred tax liabilities                            1,340,000             - 
Other liabilities                                     220,341       186,060 
Long-term debt, less current maturities               178,565             - 
                                                 ------------  ------------ 
    TOTAL LIABILITIES                               8,848,612     2,117,878 
                                                 ------------  ------------ 
Commitments and contingencies                                               
                                                                            
Stockholders' equity:                                                       
  Common stock: $0.0001 par value; authorized                               
   45,000,000 shares; issued and outstanding                                
   5,387,897 and 3,698,896 shares at December                               
   31, 2013 and 2012, respectively                        541           370 
  Additional paid in capital                       25,404,994    14,898,423 
  Other comprehensive (loss) income                   (88,370)     (181,741)
  Non-controlling interest                            394,645        70,198 
  Accumulated deficit                             (14,472,816)   (9,258,697)
                                                 ------------  ------------ 
                                                   11,238,994     5,528,553 
                                                 ------------  ------------ 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 20,087,606  $  7,646,431 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                                                                            
                Chanticleer Holdings, Inc. and Subsidiaries                 
        Consolidated Statements of Operations and Comprehensive Loss        
               For the Years Ended December 31, 2013 and 2012               
                                                                            
                                                       2013         2012    
                                                   -----------  ----------- 
Revenue:                                                                    
  Restaurant sales, net                            $ 8,144,035  $ 6,752,323 
  Management fee income - non-affiliates               103,452      100,000 
                                                   -----------  ----------- 
    Total revenue                                    8,247,487    6,852,323 
Expenses:                                                                   
  Restaurant cost of sales                           3,031,457    2,761,949 
  Restaurant operating expenses                      4,909,580    3,785,034 
  Restaurant pre-opening expenses                       56,902      204,126 
  General and administrative expense                 4,233,629    2,309,405 
  Depreciation and amortization                        622,274      383,454 
                                                   -----------  ----------- 
    Total expenses                                  12,853,842    9,443,968 
                                                   -----------  ----------- 
Loss from operations                                (4,606,355)  (2,591,645)
Other income (expense)                                                      
  Equity in earnings (losses) of investments          (125,017)     (14,803)
  Interest and other income                             82,411           23 
  Interest expense                                    (757,733)    (474,926)
  Change in fair value of derivative liabilities       119,600            - 
                                                   -----------  ----------- 
    Total other expense                               (680,739)    (489,706)
                                                   -----------  ----------- 
Loss from continuing operations before income                               
 taxes                                              (5,287,094)  (3,081,351)
    Provision for income taxes                          40,935       19,205 
                                                   -----------  ----------- 
Loss from continuing operations                     (5,328,029)  (3,100,556)
    Loss from discontinued operations, net of                               
     taxes                                             (25,215)    (293,977)
                                                   -----------  ----------- 
Consolidated net loss                               (5,353,244)  (3,394,533)
    Less: Net loss attributable to non-controlling                          
     interest                                          139,125      227,968 
                                                   -----------  ----------- 
Net loss attributable to Chanticleer Holdings,                              
 Inc.                                              $(5,214,119) $(3,166,565)
                                                   ===========  =========== 
                                                                            
Net loss attributable to Chanticleer Holdings,                              
 Inc.:                                                                      
    Loss from continuing operations                $(5,188,904) $(2,872,588)
    Loss from discontinued operations                  (25,215)    (293,977)
                                                   -----------  ----------- 
                                                   $(5,214,119) $(3,166,565)
                                                   ===========  =========== 
                                                                            
Other comprehensive loss:                                                   
    Unrealized gain (loss) on available-for-sale                            
     securities (none applies to non-controlling                            
     interest)                                           3,984     (261,404)
    Foreign translation gains                           90,384       29,013 
                                                   -----------  ----------- 
    Other comprehensive loss                       $(5,119,751) $(3,398,956)
                                                   ===========  =========== 
                                                                            
Net loss per attributable to Chanticleer Holdings,                          
 Inc. per common share, basic and diluted:                                  
Continuing operations attributable to common                                
 shareholders, basic and diluted                   $     (1.19) $     (1.13)
                                                   ===========  =========== 
Discontinued operations attributable to common                              
 shareholders, basic and diluted                   $     (0.01) $     (0.12)
                                                   ===========  =========== 
Weighted average shares outstanding                  4,365,468    2,541,696 
                                                   ===========  =========== 
                                                                            
                                                                            
                                                                            
                                                                            
                Chanticleer Holdings, Inc. and Subsidiaries                 
                   Consolidated Statements of Cash Flows                    
               For the Years Ended December 31, 2013 and 2012               
                                                                            
                                                       2013         2012    
                                                   -----------  ----------- 
Cash flows from operating activities:                                       
Net loss                                           $(5,328,029) $(3,101,215)
  Less: net loss from discontinued operations          (25,215)    (293,318)
                                                   -----------  ----------- 
Net loss from continuing operations                 (5,353,244)  (3,394,533)
Adjustments to reconcile net loss to net cash used                          
 in operating activities:                                                   
  Depreciation and amortization                        622,274      383,454 
  Equity in losses of investments                      125,017       14,803 
  Common stock issued for services                     569,990       32,400 
  Loss (gain) on sale of investments                         -       16,598 
  Amortization of debt discount                        566,867            - 
  Warrants issued for consulting services              486,272      169,200 
  Warrant liability adjustment                        (119,600)           - 
  Gain on debt extinguishment                          (70,900)           - 
  Increase in amounts due from affiliate                    52      (77,643)
  Increase in accounts receivable                        7,455      (52,359)
  Increase in other receivable                         179,919      (43,364)
  Increase in prepaid expenses and other assets       (165,356)    (125,368)
  Increase in inventory                                  5,966     (121,950)
  Increase (decrease) in accounts payable and                               
   accrued expenses                                    464,932      785,966 
  Increase in deferred rent                            (56,426)      58,886 
                                                   -----------  ----------- 
    Net cash used in operating activities from                              
     continuing operations                          (2,736,782)  (2,353,910)
    Net cash provided by (used in) operating                                
     activities from discontinued operations            32,583      (24,471)
                                                   -----------  ----------- 
    Net cash used in operating activities           (2,704,199)  (2,378,381)
                                                   -----------  ----------- 
                                                                            
Cash flows from investing activities:                                       
  Cash acquired in acquisitions                        243,991            - 
  Investment return of capital                          99,934            - 
  Purchase of investments                             (674,084)  (1,202,936)
  Franchise costs                                      (76,822)    (239,684)
  Purchase of property and equipment                (3,658,224)  (1,173,801)
                                                   -----------  ----------- 
    Net cash used in investing activities from                              
     continuing operations                          (4,065,205)  (2,616,421)
                                                   -----------  ----------- 
                                                                            
Cash flows from financing activities:                                       
  Proceeds from sale of common stock                 3,073,397    7,051,464 
  Loan proceeds                                      3,622,000    2,915,000 
  Loan repayments                                     (756,299)  (3,939,098)
  Capital lease payments                               (45,356)     (45,814)
  Non-controlling interest investment                        -       90,000 
  Other liabilities                                          -      (46,282)
                                                   -----------  ----------- 
    Net cash provided by financing activities from                          
     continuing operations                           5,893,742    6,025,270 
  Effect of exchange rate changes on cash               94,553       28,206 
                                                   -----------  ----------- 
Net increase in cash and cash equivalents             (781,109)   1,058,674 
Cash, beginning of year                              1,223,803      165,129 
                                                   -----------  ----------- 
Cash, end of year                                  $   442,694  $ 1,223,803 
                                                   ===========  =========== 
                                                                            
                                                                            
                                                                            
                                                                            
                 Chanticleer Holdings, Inc. and Subsidiaries                
              Consolidated Statements of Cash Flows, continued              
               For the Years Ended December 31, 2013 and 2012               
                                                                            
                                                        2013         2012   
                                                    -----------  -----------
Supplemental cash flow information:                                         
  Cash paid for interest and income taxes:                                  
    Interest                                        $    92,049  $   273,468
    Income taxes                                         25,928            -
                                                                            
Non-cash investing and financing activities:                                
Convertible notes payable exchanged for common                              
 stock                                              $         -  $ 1,907,238
Common stock issued for Hoot limited partner units            -      986,651
Purchase of equipment using capital leases              121,980            -
                                                                            
Acquisition of subsidiaries:                                                
  Current assets, excluding cash and cash                                   
   equivalents                                      $   475,326  $         -
  Property and equipment                              3,263,146            -
  Goodwill                                            6,100,269            -
  Trade name/trademark                                2,794,443            -
  Deposits and other assets                              98,035            -
  Liabilities assumed                                (2,110,436)           -
  Deferred tax liabilities                           (1,340,000)           -
  Non-controlling interest                             (463,571)           -
  Common stock and warrants issued                   (5,321,203)           -
  Cash paid                                          (3,740,000)           -
                                                    -----------  -----------
    Cash received in excess of cash paid in                                 
     acquisitions                                   $  (243,991) $         -
                                                    ===========  ===========
                                                                            
                                                                            
                                                                            
                                                                            
Reconciliation of net loss                                                  
 from continuing operations                                                 
 to EBITDA                                                                  
Unaudited                                                                   
Three months ended December                                                 
 31, 2013:                                   Restaurants only               
                              South Africa   Hungary      ARB     Nottingham
                              ------------  ---------  ---------  ----------
GAAP net income (loss) from                                                 
 continuing operations             (44,151)   (20,515)  (273,498)    112,305
  Interest expense                   8,353          -          -           -
  Change in fair value of                                                   
   derivative liablility                 -          -          -           -
  Non-cash expenses related                                                 
   to services                           -          -          -           -
  Pre-opening expenses              39,364          -          -           -
  Depreciation and                                                          
   amortization                     97,307     33,671     95,679       1,930
  Income taxes                      13,719          -          -           -
                              ------------  ---------  ---------  ----------
EBITDA                        $    114,592  $  13,156  $(177,819) $  114,235
                              ============  =========  =========  ==========
    Total Restaurants EBITDA                                                
                                                                            
                                                                            
Three months ended December                                                 
 31, 2012:                                                                  
                                                                            
                              South Africa   Hungary                        
                              ------------  ---------                       
GAAP net loss from continuing                                               
 operations                         13,777   (119,441)                      
  Interest expense                  15,824          -                       
  Non-cash expenses related                                                 
   to services                           -          -                       
  Pre-opening costs                   (911)    14,870                       
  Depreciation and                                                          
   amortization                     86,619     29,968                       
  Income taxes                      11,208          -                       
                              ------------  ---------                       
EBITDA                        $    126,517  $ (74,603)                      
                              ============  =========                       
    Total Restaurants EBITDA                $  51,914                       
                                            =========                       
                                                                            
Year ended December 31, 2013:                Restaurants only               
                              South Africa   Hungary      ARB     Nottingham
                              ------------  ---------  ---------  ----------
GAAP net income (loss) from                                                 
 continuing operations            (115,753)  (125,115)  (273,498)    112,305
  Interest expense                  36,460          -          -           -
  Change in fair value of                                                   
   derivative liablility                 -          -          -           -
  Non-cash expenses related                                                 
   to services and warrants              -          -          -           -
  Pre-opening expenses              56,902          -          -           -
  Gain on debt extinguishment      (70,900)         -          -           -
  Depreciation and                                                          
   amortization                    378,410    121,434     95,679       1,930
  Income taxes                      40,935          -          -           -
                              ------------  ---------  ---------  ----------
EBITDA                        $    326,054  $  (3,681) $(177,819) $  114,235
                              ============  =========  =========  ==========
    Total Restaurants EBITDA                                                
                                                                            
                                                                            
Year ended December 31, 2012:                                               
                              South Africa   Hungary                        
                              ------------  ---------                       
GAAP net loss from continuing                                               
 operations                       (181,128)  (264,865)                      
  Interest expense                  53,339          -                       
  Non-cash expenses related                                                 
   to services                           -          -                       
  Pre-opening costs                 37,772    166,354                       
  Depreciation and                                                          
   amortization                    334,520     40,166                       
  Income taxes                      19,205          -                       
                              ------------  ---------                       
EBITDA                        $    263,708  $ (58,345)                      
                              ============  =========                       
    Total Restaurants EBITDA                $ 205,363                       
                                            =========                       
                                                                            
                                                                            
                                                                         
                                                                         
Reconciliation of net loss                                               
 from continuing operations                                              
 to EBITDA                                                               
Unaudited                                                                
Three months ended December                                              
 31, 2013:                    Restaurants only                           
                                     JF          Management     Totals   
                              ----------------  -----------  ----------- 
GAAP net income (loss) from                                              
 continuing operations                 (47,954)  (1,982,241)  (2,046,907)
  Interest expense                           -      310,439      318,792 
  Change in fair value of                                                
   derivative liablility                     -     (195,500)    (195,500)
  Non-cash expenses related                                              
   to services                               -      779,738      779,738 
  Pre-opening expenses                       -            -       39,364 
  Depreciation and                                                       
   amortization                         18,323        2,138      249,048 
  Income taxes                               -            -       13,719 
                              ----------------  -----------  ----------- 
EBITDA                        $        (29,631) $(1,085,426) $  (841,746)
                              ================  ===========  =========== 
    Total Restaurants EBITDA  $         34,533                           
                              ================                           
                                                                         
Three months ended December                                              
 31, 2012:                                                               
                                                                         
                                                 Management     Totals   
                                                -----------  ----------- 
GAAP net loss from continuing                                            
 operations                                        (669,187)    (774,851)
  Interest expense                                   23,759       39,583 
  Non-cash expenses related                                              
   to services                                       42,110       42,110 
  Pre-opening costs                                       -       13,959 
  Depreciation and                                                       
   amortization                                     (18,704)      97,883 
  Income taxes                                            -       11,208 
                                                -----------  ----------- 
EBITDA                                          $  (622,022) $  (570,108)
                                                ===========  =========== 
    Total Restaurants EBITDA                                             
                                                                         
                                                                         
Year ended December 31, 2013: Restaurants only                           
                                     JF          Management     Totals   
                              ----------------  -----------  ----------- 
GAAP net income (loss) from                                              
 continuing operations                 (47,954)  (4,738,889)  (5,188,904)
  Interest expense                           -      721,273      757,733 
  Change in fair value of                                                
   derivative liablility                     -     (119,600)    (119,600)
  Non-cash expenses related                                              
   to services and warrants                  -    1,056,262    1,056,262 
  Pre-opening expenses                       -            -       56,902 
  Gain on debt extinguishment                -            -      (70,900)
  Depreciation and                                                       
   amortization                         18,323        6,498      622,274 
  Income taxes                               -            -       40,935 
                              ----------------  -----------  ----------- 
EBITDA                        $        (29,631) $(3,074,456) $(2,845,298)
                              ================  ===========  =========== 
    Total Restaurants EBITDA  $        229,158                           
                              ================                           
                                                                         
Year ended December 31, 2012:                                            
                                                 Management     Totals   
                                                -----------  ----------- 
GAAP net loss from continuing                                            
 operations                                      (2,426,595)  (2,872,588)
  Interest expense                                  421,587      474,926 
  Non-cash expenses related                                              
   to services                                      201,600      201,600 
  Pre-opening costs                                       -      204,126 
  Depreciation and                                                       
   amortization                                       8,768      383,454 
  Income taxes                                            -       19,205 
                                                -----------  ----------- 
EBITDA                                          $(1,794,640) $(1,589,277)
                                                ===========  =========== 
    Total Restaurants EBITDA                                             
                                                                         
                                                                         
                                                                         

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