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Chanticleer Holdings, Inc. (NASDAQ: HOTR, Target Price: $5.00) Investment Highlights Proposed acquisition of The Burger Joint (BGR) drives growth Chanticleer Holdings, Inc. (NASDAQ: HOTR, Chanticleer), a fast-growing restaurant operator headquartered in Charlotte, NC, announced its intention to acquire BGR: The Burger Joint (BGR), a better burger concept well-known in the Maryland / Washington DC / Virginia area. The is the latest in a series of strategic moves increasing Chanticleers presence in the better burger category an area we see as both having high growth potential and being-well matched for the companys experience. The better burger space is a high growth segment within the $34.5Bn fast casual restaurant industry, with an estimated market size of $2.4Bn. Upon closing, the acquisition will increase Chanticleers restaurant holdings by approximately 20 locations with 80 franchise locations under development, providing a scale that should enable continued cash flow leverage for the company. Chanticleer a unique high growth restaurant business Chanticleer owns and operates 26 restaurants from multiple restaurant brands domestically and internationally, including the Hooters brand, American Burger Company, and Just Fresh. Led by highly experienced management team, Chanticleer has executed on its plan to grow its Hooters footprint at home and abroad while making steady improvements to core profitability. Indeed, in 3Q14 Chanticleer reported revenues that were up over 472% from the year-ago period while achieving its first quarter of management-defined adjusted EBITDA profitability, which includes management fees and dividends to related to its ownership in Hooters of America. Chanticleer is the only publicly traded equity offering exposure to Hooters of America, which has approximately $1Bn in annual revenues operating 430 Hooters restaurants within 28 countries. Chanticleer controls a 3% minority interest in Hooters of America, and received a $0.5mn distribution last August from its interest in Hooters of America. Further, HOTR CEO Mike Pruitt sits on the Hooters of America Board of Directors. We see the companys interest in Hooters of America as a strategic asset, and think that it could be a hidden asset representing just under half of the companys market capitalization. 2015 off to a powerful start Chanticleer has begun 2015 with a flourish. The company has been one of the best performing stocks in our coverage universe, with shares up 22.5% year to date after closing at $2.12 on February 28, 2015. After news was reported of a possible sale of Hooters of America in January, Chanticleer has added several key milestones of its own making, including a capital raise via of rights offering at $2.00 per share, and a bold announcement that the company sought to reach 50 locations by year-end 2015. The company began accepting subscriptions for its rights offering for holders of record on February 26, 2015 and will continue to do so through March 13, 2015. On the unit growth front, with the pending acquisition of BGR, the company is well on its way to achieving its goal of at least 50 units by year-end 2015. We note that our 2015E estimates do not include the acquisition of BGR; which we believe could add at least $10mn to the top line.

Maintaining estimates and price target We are maintaining our price target for Chanticleer at this time. We plan on revisiting our valuation and forecast after the company completes its rights offering, releases 4Q14 results, issues guidance for 2015, and finalizes the BGR acquisition. Our price target of $5.00 represents potential upside of 135.8% from the recent price of $2.12 on March 2, 2015.

Equity |Services/ Res tauran ts

Stock Details (3/2/2015) NASDAQ HOTR

Sector / Industry Services / Restaurants

Price Target $5.00 Recent share price $2.12

Shares o/s (mn) 7.2

Market cap (in $ mn) $15.3

52-week high/low $5.24/$1.40 Source: Bloomberg, SeeThruEquity Research

Key Financials ($mn, unless specified)

FY13 FY14E FY15E

Revenues 8.2 32.2 43.6 EBITDA (4.0) (2.6) 1.4

EBIT (4.6) (4.3) (1.0)

Reported net income (5.2) (5.0) (2.4)

GAAP EPS (1.19) (0.77) (0.28)

Source: SeeThruEquity Research Key Ratios

FY13 FY14E FY15E

Gross margin (%) 63.2 66.6 67.1 Operating Margin (%) (55.9) (13.2) (2.2)

EBITDA margin (%) (48.3) (8.0) 3.3

Net margin (%) (63.2) (15.6) (5.5)

P/Revenue (x) 1.9 0.5 0.4

EV/EBITDA (x) NM NM 16.4

EV/Revenue (x) 2.8 0.7 0.5 Source: SeeThruEquity Research

Share Price Performance ($, LTM)

Source: Reuters

Special Update: Chanticleer Holdings, Inc.

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Powerful Synergies from proposed acquisition of The Burger Joint (BGR) On February 18, 2015, Chanticleer announced plans to acquire The Burger Joint (BGR), a better burger concept

known for its proprietary blend of prime dry-aged burgers frilled over an open flame. BGR was voted the #7 burger chain in the United States by The Daily Meal and MSN.com, and the Number 1 Burger Patty by The Washington Post. In addition to its proprietary patty blend, BGR uses buns bakes fresh by local bakers, and fresh vegetables prepared in the store.

With 20 locations and 80 franchise locations under development, the acquisition of BGR would go a long way towards Chanticleers goal of surpassing 50 corporate locations during 2015. The company currently has nine corporate-owned locations, with a heavy presence in the Maryland / Washington / Virginia area, as well as eleven franchises including one international franchise in Kuwait, and 80 franchises in development, roughly an even split between international and domestic locations.

Chanticleer will purchase BGR for approximately $5mn consisting of cash and stock. The deal is expected to close by the end of March, and BGRs chief executive will stay on with the combined company. The purchase price will be comprised of $4mn in cash and shares of Chanticleer stock equal to $1mn in aggregate.

In our view, BGRs business profile complements Chanticleer extremely well, as Chanticleer has experience taking America concepts abroad as well as growing exposure in the better category through its prior acquisitions of American Burger Company and The Burger Company. The better burger category has performed well for Chanticleer thus far, with sales in its six existing burger restaurant units representing approximately 20% YoY of the companys sales in the past year and contributing positively to Chanticleers pro forma operating profits. Our estimates do not include BGR, but we expect given the unit count and size of the company that it would have the potential to add at least $10mn to the top line.

The market opportunity for better burgers is large and growing quickly. The better burger space is a high growth segment within the $34.5Bn fast casual restaurant industry, with an estimated market size of $2.4Bn. Fast Casual dining blends high quality food with convenience in a more upscale environment than fast-food, at affordable prices. Recent IPOs in the space including Habit Burger (HABT) and Shake Shack (SHAK) prices at greater than 15x 2015E projected EBITDA, and in our view Chanticleer should justify at least these multiples given its powerful growth prospects.

Rights Offering to Fund Dramatic Growth as Chanticleer doubles its restaurant count in 2015

Chanticleer began the subscription period for its rights offering last Thursday, February 26. Eligible shareholders of record will be able to purchase up to 8.5mn shares of Chanticleer stock through the rights offering subscription period, which expires Friday, March 13, 2015. The rights offering price is $2.00, a 10% discount to the recent close of $2.20 on February 28, 2014.

In our view, a successful rights offering would be a significant, positive milestone for the company, as we have felt the biggest potential hurdle for the companys growth plans would be access to continued growth capital enabling Chanticleer management to execute as the company scales.

If fully subscribed, Chanticleer plans to use the proceeds to increase its restaurant unit count from 26 at the end of 2014 to over 50 locations over the next twelve months which would nearly double the total count. This is a significant increase for Chanticleer, one that has the potential to enable the company to expand margins meaningfully as it reaps the benefits of scale.

Although the current valuation appears low for Chanticleer to offer new equity, in our opinion, the offering will enable to aggressively pursue what appears to be very attractive opportunities to invest growth capital. Further, by pursuing a

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rights offering, the company should be able to raise up to $17mn in new capital while preserving its healthy net operating tax loss carry-forward (NOL) balance of $18mn.

Potential proceeds from rights offering to accelerate growth

Gross Proceeds from the rights offering could possibly be as much as $17mn for Chanticleer, assuming an additional 8.5mn shares with an exercise price of $2.00. We calculate the new shares outstanding after the offering will be approximately 16.1mn.

We expect the proceeds will most likely be used to fund the BGR acquisition, for general corporate purposes, to fund internal growth opportunities, and to make future acquisitions.

We note that according to its S-1, if HOTR is able to raise at least $7.5mn from the rights offering, then management expects it will have sufficient proceeds to make an additional, smaller acquisition in the better burger space, as well as opening costs for at least three new international Hooters locations. We would expect any proceeds beyond that to be directed towards reducing debt.

Chanticleer ended the year with 26 restaurant locations, up from 18 in 2013 and six in 2012, per the chart included. But with estimated proceeds from a fully subscribed rights offering, we expect Chanticleer can meet its plans to nearly double its restaurant unit count to 50 over the next twelve months.

We were pleased with the companys selection of BGR as a potential acquisition target. Given the success the company has had in the better burger space which now represents 20% of sales we think the acquisition dovetails nicely with Chanticleers internal efforts, and will serve to accelerate the companys presence in this attractive category. This is a profitable and growing space for Chanticleer, and we believe the acquisition will add scale and earnings leverage for the company. We note that the company has already proven it can digest acquisition in this space, and has a best in breed division head in Rich Adams, who previously held senior executive roles at Bojangles. Moreover the better burger category is the fastest growing section of the $72Bn burger market and is well-suited for Chanticleers expertise.

We would also expect Chanticleer to use proceeds from the offering to increase its presence in its core international Hooters restaurant brand. The company has new locations planned in Brisbane, Australia, Port Elizabeth, South Africa, and New Castle, United Kingdom.

Maintaining target of $5.00 Our target remains unchanged at $5.00 per share. This represents upside of 135.8% from the recent price of $2.12 on

March 2, 2015. Our 2015E estimates do not include the impact of the proposed BGR acquisition. We plan to review our forecast for HOTR following 4Q14 results, the completion of the rights offering, and management guidance.

HOTR stock has been a strong performer in our coverage universe thus far during 2015, with shares up 22.5% to $2.12 versus $1.73 at 2014 year end.

We view the companys fundraising and proposed acquisition of BGR as significant positive milestones for the company and expect to revisit our price target and estimates when the company reports fiscal 2014 results and issues guidance for 2015.

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Management Team Michael Pruitt Chairman, Chief Executive Officer and President 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 business development company. 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 the company 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. 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 and President of RCG Companies, Inc. (later changed to One Travel), a publicly traded holding company 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, the Coastal Education Foundation Board and the Athletic Committee of the Board of Trustees. He also sits on the Board of Chanticleer Holdings, Inc. (HOTR). Alex Hemingway Director of Chanticleer Europe Alex brings domestic and international executive management experience to the team and a proven track record of success in the Central European QSR industry. Between 19992005, Alex was President and Chief Executive of Central European Franchise Group (CEFG), the owner and operator of the Pizza Hut and Kentucky Fried Chicken brands in Hungary as well as three local national brands. Both brands boasted the highest customer feedback scores in the region for YUM! Restaurants International. While managing CEFG, Mr. Hemingway was approached by Orient Rt., Central Europes largest restaurant company with 130+ operating units based in Budapest, to be its Chief Executive Officer. Between the two companies Alex has had over 180 units and 5000 people under his employ. Alex founded and served as the Director of the Fast Food Association of Hungary. He currently serves on the Board of Supervisors of the Budapest Honved Football Club and local charitable foundations. Eric Lederer Chief Financial Officer Eric joined Chanticleer Holdings in February 2011. Mr. Lederer has served as the Companys Controller since February, 2011 and was appointed CFO in June 2012. From December 2005 through January 2011, Eric was the Controller of PokerTek, Inc. (NASDAQ, PTEK), a licensed gaming company that develops and distributes electronic table games, where he was responsible for day-to-day accounting functions and preparing SEC filings. Richard Adams President and COO of American Burger Company Richard Adams serves as President and COO of American Burger Company for Chanticleer. Rich has over 35 years of experience in the restaurant industry. He is a former Regional Vice President of Bojangles' Restaurants, where he was instrumental in driving successful a turnaround. Rich also served as a former area Vice President for a leading Burger King Franchisee with over 100 locations.

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About Chanticleer Holdings, Inc. Headquartered in 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 Australia, South Africa, and Europe, and two Hooters restaurants in the United States. The company also owns and operates American Burger Company and owns a majority stake in Just Fresh Restaurants in the US.

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Contact:

Ajay Tandon Director of Research SeeThruEquity, LLC www.seethruequity.com (646) 495-0939 ajay@seethruequity.com

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