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Chanticleer Holdings Reports 2014 Second Quarter Earnings

22.9% Restaurant Revenue Increase and 32.9% Increase in Restaurant EBITDA Quarter-Over-Quarter

CHARLOTTE, NC--(Marketwired - August 14, 2014) - Chanticleer Holdings, Inc. (NASDAQ: HOTR) ("Chanticleer," or the "Company"), owner and operator of multiple restaurant brands internationally and domestically, announces its financial results for the second quarter ended June 30, 2014 ("Q2").

Restaurant revenue for Q2 2014 increased to $6.82 million, compared to $1.64 million in the comparable period in 2013, and increased 22.9% quarter-over-quarter from $5.55 million in the previous quarter ended March 31, 2014 ("Q1"). Restaurant revenue for the six months ended June 30, 2014 increased to $12.37 million, compared to $3.28 million in the comparable period in 2013, an increase of 276.6%.The sequential increase from Q1 2014 as well as the year-to-date increases are attributable mostly to our acquisitions of the Hooters restaurants in the Pacific Northwest on January 31, 2014 and the increase in our ownership in our Hooters restaurant in Campbelltown, Australia on April 1, 2014 (collectively, the "2014 Acquisitions").

Restaurant cost of sales for Q2 2014 were 36.0% compared to 38.7% in the comparable period in 2013 and 35.8% in Q1 2014. Restaurant cost of sales for the six months ended June 30, 2014 were 35.9% compared to 38.5% in the comparable period in 2013. The Company anticipates continuing quarter-over-quarter gross profit margin decreases across its restaurant territories and brands throughout the remainder of 2014. 

Restaurant operating expenses for Q2 2014 were $4.01 million, or 58.8% of restaurant revenue, compared to $932,250, or 56.8% of restaurant revenue, in the comparable period in 2013 and 59.2% in Q1 2014. Restaurant operating expenses for the six months ended June 30, 2014 were $7.29 million, or 59.0% of restaurant revenue, compared to $1.91 million, or 58.2% of restaurant revenue, in the comparable period in 2013. The increases in restaurant operating expenses in 2014 are attributable largely to the 2014 Acquisitions. General and administrative expenses ("G&A") for Q2 2014 were $1.25 million, or 18.0% of total revenue, compared to $645,648, or 38.8% of total revenue, in the comparable period in 2013. G&A for the six months ended June 30, 2014 were $2.86 million, or 22.8% of total revenue, compared to $1.37 million, or 41.0% of total revenue, in the comparable period in 2013. The dollar increase in G&A was primarily due to increased payroll, professional and consulting fees related to our growth both for the Company and its subsidiaries.

Restaurant EBITDA, a non-GAAP measure,* for Q2 2014 increased to $451,776, compared to $74,707 in the comparable period in 2013, and increased 32.9% sequentially from $339,926 in Q1 2014. Restaurant EBITDA for the six months ended June 30, 2014 increased to $791,702, compared to $111,349 in the comparable period in 2013.

The Company had an increase in quarter-over-quarter net loss to $1.54 million in Q2 from a net loss of $1.45 million in Q1. The Company had a decrease in net loss per share sequentially, to a net loss of $0.22 per share in Q2 from a net loss of $0.24 per share in Q1. The Company had a net loss of $2.99 million (net loss of $0.47 per share) and a net loss of $1.50 million (net loss of $0.39 per share) for the six months ended June 30, 2014 and 2013, respectively. The Company incurred approximately $261,000 of pre-opening expenses in Q2 2014, primarily attributable to two of our restaurant sites in Australia. One of the Australia locations has since opened in Surfers Paradise and the other location in Townsville is expected to open in late September 2014. Management is hopeful that the Company will have positive adjusted EBITDA, a non-GAAP measure,* in the fourth quarter of 2014, although there is no assurance this will occur.

To date, Chanticleer has twenty-five restaurants worldwide, including its most recent opening of a Hooters restaurant in Surfers Paradise, Australia and the acquisition of 60% ownership interest of Australia Hooters franchisee, TMIX Management Australia Pty, Ltd, which includes Hooters restaurants in Parramatta and Penrith, both suburbs of Sydney. The Company continues to build its portfolio of brands/concepts, expecting four additional restaurants by 2014 year end, through organic growth or acquisitions. 

Mike Pruitt, Chairman and Chief Executive Officer, commented, "We are pleased with our current growth rate, already exceeding full year 2013 restaurant revenue in just the first six months of 2014. Our brands continue to improve quarter-over-quarter led by our Hooters South Africa market, Hooters Nottingham and Just Fresh. We are excited to see the growth in our Company with our current restaurant portfolio averaging $700,000 in net sales per week for the last several weeks, highlighted by our Surfers Paradise location which has been top three international Hooters location each of the first four weeks of being open. With our top-line growth and continued operating improvements, we are closer to our goal of being adjusted EBITDA positive by year-end." 

For full disclosure relating to our second quarter financial information, please refer to Chanticleer's Quarterly Report on Form 10-Q, filed with the SEC on August 14, 2014, available online at www.sec.gov.

*Adjusted EBITDA and restaurant EBITDA are non-GAAP financial measures - see "Use of Non-GAAP Measures" below and see the reconciliation of GAAP to adjusted EBITDA and restaurant EBITDA in the table accompanying this release.

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 adjusted EBITDA and restaurant EBITDA, which differ 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, adjusted EBITDA and restaurant EBITDA also exclude pre-opening costs for our restaurants, non-cash expenses for services, change in fair value of derivative liability and gain on extinguishment of debt. Adjusted EBITDA and restaurant EBITDA are not measures of performance defined in accordance with GAAP. However, adjusted EBITDA and restaurant EBITDA are used internally in planning and evaluating the company's operating performance. Accordingly, management believes that disclosure of these metrics 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.

Adjusted EBITDA and restaurant EBITDA should not be considered as alternatives 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 adjusted EBITDA and restaurant 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 Australia, England, South Africa, Hungary, and Brazil, and recently acquired two Hooters restaurants in the United States. 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                 
                   Condensed Consolidated Balance Sheets                    
                                                                            
                                                  June 30,     December 31, 
                                                    2014           2013     
                                               -------------  ------------- 
                    ASSETS                      (Unaudited)                 
Current assets:                                                             
  Cash                                         $     273,378  $     442,694 
  Accounts receivable                                118,354        227,181 
  Other receivable                                    45,210         50,380 
  Inventories                                        475,459        381,408 
  Due from related parties                           113,481        116,305 
  Prepaid expenses and other current assets          552,490        495,165 
                                               -------------  ------------- 
    TOTAL CURRENT ASSETS                           1,578,372      1,713,133 
Property and equipment, net                       12,697,117      5,620,189 
Goodwill                                           9,182,241      6,496,756 
Intangible assets, net                             3,608,516      3,424,632 
Investments at fair value                             35,362         55,112 
Other investments                                  1,550,000      2,491,963 
Deposits and other assets                            517,526        285,821 
                                               -------------  ------------- 
    TOTAL ASSETS                               $  29,169,134  $  20,087,606 
                                               =============  ============= 
                                                                            
     LIABILITIES AND STOCKHOLDERS' EQUITY                                   
Current liabilities:                                                        
  Current maturities of long-term debt and                                  
   notes payable                               $   1,959,579  $     835,454 
  Current maturities of convertible note                                    
   payable, net of discount of $210,083              289,917              - 
  Derivative liability                             1,734,500      2,146,000 
  Accounts payable and accrued expenses            3,572,145      2,425,873 
  Current maturities of capital leases payable        58,630         59,162 
  Deferred rent                                      111,722         53,303 
  Loan payable                                     1,571,646              - 
  Due to related parties                              12,191         12,191 
                                               -------------  ------------- 
    TOTAL CURRENT LIABILITIES                      9,310,330      5,531,983 
Convertible notes payable, net of discount of                               
 $ 2,083,333 and $2,583,333, respectively            916,667        416,667 
Capital leases payable, less current                                        
 maturities                                           73,033        105,918 
Deferred rent                                      1,852,611      1,055,138 
Deferred tax liabilities                           1,275,317      1,340,000 
Long-term debt, less current maturities              180,874        398,906 
                                               -------------  ------------- 
    TOTAL LIABILITIES                             13,608,832      8,848,612 
                                               -------------  ------------- 
Commitments and contingencies                                               
                                                                            
Stockholders' equity:                                                       
  Common stock: $0.0001 par value; authorized                               
   45,000,000 shares; issued and outstanding                                
   6,499,433 and 5,387,897 shares at June 30,                               
   2014 and December 31, 2013, respectively              652            541 
  Additional paid in capital                      31,159,996     25,404,994 
  Other comprehensive loss                           (30,339)       (88,370)
  Accumulated deficit                            (17,334,191)   (14,472,816)
  Non-controlling interest                         1,764,184        394,645 
                                               -------------  ------------- 
    TOTAL STOCKHOLDERS' EQUITY                    15,560,302     11,238,994 
                                               -------------  ------------- 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $  29,169,134  $  20,087,606 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                Chanticleer Holdings, Inc. and Subsidiaries                 
              Condensed Consolidated Statements of Operations               
                                (Unaudited)                                 
                                                For the Three Months Ended  
                                                         June 30,           
                                                    2014           2013     
                                               -------------  ------------- 
Revenue:                                                                    
  Restaurant sales, net                        $   6,818,932  $   1,641,043 
  Gaming sales, net                                   75,724              - 
  Management fee income - non-affiliates              25,151         25,000 
                                               -------------  ------------- 
    Total revenue                                  6,919,807      1,666,043 
Expenses:                                                                   
  Restaurant cost of sales                         2,454,626        635,348 
  Restaurant operating expenses                    4,012,399        932,250 
  Restaurant pre-opening expenses                    260,981         10,201 
  General and administrative expenses              1,245,660        645,648 
  Depreciation and amortization                      412,487        129,876 
                                               -------------  ------------- 
    Total expenses                                 8,386,153      2,353,323 
                                               -------------  ------------- 
Loss from operations                              (1,466,346)      (687,280)
Other income (expense)                                                      
  Equity in losses of investments                          -        (18,806)
  Realized gains                                       4,127              - 
  Miscellaneous income                                 4,552          1,263 
  Change in fair value of derivative                                        
   liabilities                                       272,100              - 
  Interest expense                                  (350,760)       (18,443)
                                               -------------  ------------- 
    Total other expense                              (69,981)       (35,986)
                                               -------------  ------------- 
Loss from operations before income taxes          (1,536,327)      (723,266)
  Expense for income taxes                             1,379         12,106 
                                               -------------  ------------- 
Net loss                                          (1,537,706)      (735,372)
  Less: Net loss attributable to non-                                       
   controlling interest                              126,642         28,428 
                                               -------------  ------------- 
Net loss attributable to Chanticleer Holdings,                              
 Inc.                                          $  (1,411,064) $    (706,944)
                                               =============  ============= 
                                                                            
Other comprehensive income (loss):                                          
  Unrealized loss on available-for-sale                                     
   securities (none applies to non-controlling                              
   interest)                                                                
                                               $      (3,809) $     (13,202)
  Foreign translation income                          15,419         41,400 
                                               -------------  ------------- 
    Other comprehensive loss                   $  (1,399,454) $    (678,746)
                                               =============  ============= 
                                                                            
Net loss attributable to Chanticleer Holdings,                              
 Inc. per common share, basic and diluted:     $       (0.22) $       (0.19)
                                               =============  ============= 
Weighted average shares outstanding, basic and                              
 diluted                                           6,329,406      3,701,928 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                Chanticleer Holdings, Inc. and Subsidiaries                 
              Condensed Consolidated Statements of Operations               
                                (Unaudited)                                 
                                                 For the Six Months Ended   
                                                         June 30,           
                                                    2014           2013     
                                               -------------  ------------- 
Revenue:                                                                    
  Restaurant sales, net                        $  12,365,870  $   3,283,165 
  Gaming income, net                                 131,235              - 
  Management fee income - non-affiliates              50,151         50,000 
                                               -------------  ------------- 
    Total revenue                                 12,547,256      3,333,165 
Expenses:                                                                   
  Restaurant cost of sales                         4,437,907      1,263,236 
  Restaurant operating expenses                    7,294,226      1,912,405 
  Restaurant pre-opening expenses                    260,981         10,201 
  General and administrative expenses              2,860,453      1,365,848 
  Depreciation and amortization                      777,375        244,100 
                                               -------------  ------------- 
    Total expenses                                15,630,942      4,795,790 
                                               -------------  ------------- 
Loss from operations                              (3,083,686)    (1,462,625)
Other income (expense)                                                      
  Equity in losses of investments                    (40,694)       (33,053)
  Gain on extinguishment of debt                           -         70,900 
  Miscellaneous income                                 7,838          3,825 
  Realized gains                                     101,472              - 
  Change in fair value of derivative                                        
   liabilities                                       704,200              - 
  Interest expense                                  (687,541)       (55,386)
                                               -------------  ------------- 
    Total other income (expense)                      85,275        (13,714)
                                               -------------  ------------- 
Loss from operations before income taxes          (2,998,411)    (1,476,339)
    (Provision) expense for income taxes              (7,509)        21,197 
                                               -------------  ------------- 
Consolidated net loss                             (2,990,902)    (1,497,536)
    Less: Net loss attributable to non-                                     
     controlling interest                            129,528         52,759 
                                               -------------  ------------- 
Net loss attributable to Chanticleer Holdings,                              
 Inc.                                          $  (2,861,374) $  (1,444,777)
                                               =============  ============= 
                                                                            
Other comprehensive loss (income):                                          
    Unrealized loss on available-for-sale                                   
     securities (none applies to non-                                       
     controlling interest)                                                  
                                               $     (15,527) $     (36,966)
    Foreign translation income (loss)                 51,165         54,916 
                                               -------------  ------------- 
Other comprehensive loss                       $  (2,825,736) $  (1,426,827)
                                               =============  ============= 
                                                                            
Net loss per attributable to Chanticleer                                    
 Holdings, Inc. per common share, basic and                                 
 diluted:                                      $       (0.47) $       (0.39)
                                               =============  ============= 
Weighted average shares outstanding, basic and                              
 diluted                                           6,152,931      3,700,420 
                                               =============  ============= 
                                                                            
                                                                            

 

                                
                                
Reconciliation                                                           
 of net loss to                                                          
 Adjusted EBITDA                                                         
Unaudited                                                                
Three months                                                             
 ended June 30,                                                          
 2014:                           Restaurants only                        
                   South                                                 
                  Africa     Hungary       ARB      Nottingham Australia 
                 ---------  ----------  ----------  ---------- --------- 
GAAP net income                                           
 (loss)          $(108,124) $  (34,621) $ (392,808) $   54,830 $(280,568)
G&A to                                                                   
 management        177,548      27,212     125,102      70,516    28,295 
                 ---------  ----------  ----------  ---------- --------- 
GAAP net income                                                          
 (loss)             69,424      (7,409)   (267,706)    125,346  (252,273)
  Interest                                                               
   expense          12,795                                               
   (income)                          -         477          32         - 
  Change in fair                                                         
   value of                                                              
   derivative                                                            
   liablility            -           -           -           -         - 
  Non-cash                                                               
   expenses                                                              
   related to                                                            
   services              -           -           -           -         - 
  Pre-opening                                                            
   expenses         12,515           -           -           -   247,918 
  Depreciation                                                           
   and                                                                   
   amortization     92,609      25,697     132,936       3,000    21,960 
  Income taxes      22,238           -           -      17,274         - 
                 ---------  ----------  ----------  ---------- ---------                                             
Adjusted EBITDA  $ 209,581  $   18,288  $ (134,293) $  145,652 $  17,605 
                 =========  ==========  ==========  ========== ========= 
  Total                                                                  
   Restaurants                                                           
   EBITDA                                                                
  Change in                                                              
   EBITDA from                                                           
   Q1 - total                                                            
   restaurants                                                           
                                                                         
  Change in                                                              
   EBITDA from                                                           
   Q1 -                                          
   restaurants   $ 103,572  $   19,661  $    4,709  $   23,290 $  17,605 
                                                                         
Three months                                                             
ended June 30,                                                           
2013:                                                                    
                                                                         
                   South                                                 
                  Africa     Hungary                                     
                 ---------  ----------                                   
GAAP net income                                                   
 (loss)          $(122,536) $  (76,728)                                  
G&A to                                                                   
 management         71,119      39,985                                   
                 ---------  ----------                                   
GAAP net income                                                          
 (loss)            (51,417)    (36,743)                                  
  Interest                                                               
   expense          11,769           -                                   
  Pre-opening                                                            
   costs            10,201           -                                   
  Depreciation                                                           
   and                                                                   
   amortization     97,081      31,710                                   
  Income taxes      12,106           -                                   
                 ---------  ----------                                   
Adjusted EBITDA  $  79,740  $   (5,033)                                  
                 ---------  ----------                                   
  Total                                                                  
   Restaurants                                                           
   EBITDA                                                                
                                                                         
                                                                         
                                                                         
Reconciliation                                                              
 of net loss to                                                             
 Adjusted EBITDA                                                            
Unaudited                                                                   
Three months                                                                
 ended June 30,                                                    
 2014:                             Restaurants only                                                     
                            Hoot Pac                                        
                    JF         NW        Spoon     Management     Totals    
                 --------  ----------  ----------  -----------  ----------- 
GAAP net income                                                     
 (loss)          $  7,549  $  (49,308  $  (68,800) $  (665,856) $(1,537,706)
G&A to                                                                      
 management        92,362      72,012       6,000     (599,047)           - 
                 --------  ----------  ----------  -----------  ----------- 
GAAP net income                 
 (loss)            99,911      22,704     (62,800)  (1,264,903) $(1,537,706)
  Interest                                                                  
   expense                                                                  
   (income)             4           -           -      337,452      350,760 
  Change in fair                                                            
   value of                                                                 
   derivative                                                               
   liablility           -           -           -     (272,100)    (272,100)
  Non-cash                                                                  
   expenses                                                                 
   related to                                                               
   services             -           -           -      124,275      124,275 
  Pre-opening                                                               
   expenses           548           -           -            -      260,981 
  Depreciation                                                              
   and                                                                      
   amortization    47,660      56,501      30,415        1,709      412,487 
  Income taxes          -           -           -      (38,133)       1,379 
                 --------  ----------  ----------  -----------  ----------- 
Adjusted EBITDA  $148,123  $   79,205  $  (32,385) $(1,111,700) $  (659,924)
                 ========  ==========  ==========  ===========  =========== 
  Total                                                                     
   Restaurants                                                              
   EBITDA                              $  451,776                           
  Change in                                                                 
   EBITDA from                                                              
   Q1 - total                                                               
   restaurants                         $  111,850                           
                                                                            
  Change in                                                                 
   EBITDA from                                                              
   Q1 -                                                              
   restaurants   $(13,586) $  (17,152) $  (26,249) $   166,574  $   278,424 
                                                                            
Three months                                                                
ended June 30,                                                              
2013:                                                                       
                                                                            
                                                   Management     Totals    
                                                   -----------  ----------- 
GAAP net income                                        
 (loss)                                            $  (536,108) $  (735,372)
G&A to                                                                      
 management                                           (111,104)           - 
                                                   -----------  ----------- 
GAAP net income                                                             
 (loss)                                               (647,212     (735,372)
  Interest                                                                  
   expense                                               6,673       18,442 
  Pre-opening                                                               
   costs                                                     -       10,201 
  Depreciation                                                              
   and                                                                      
   amortization                                          1,085      129,876 
  Income taxes                                               -       12,106 
                                                   -----------  ----------- 
Adjusted EBITDA                                    $  (639,454) $  (564,747)
                                                   -----------  ----------- 
  Total                                                                     
   Restaurants                                                              
   EBITDA                              $  74,707                            
                                       ----------                           
                                                                            
                                                                            
                                                                           
Six months ended                                                           
 June 30, 2014:                       Restaurants only                     
                    South                                                  
                   Africa     Hungary       ARB      Nottingham  Australia 
                 ---------  ---------  -----------  ----------- ---------- 
GAAP net loss    $(198,902) $(112,366) $  (809,636) $   105,015 $ (280,568)
G&A to                                                                     
 management        257,573     79,888      271,529      123,839     28,295 
                 ---------  ---------  -----------  ----------- ---------- 
GAAP net loss       58,671    (32,478)    (538,107)     228,854   (252,273)
Interest expense                                                           
 (income)           25,273          -          903            -          - 
Change in fair                                                             
 value of                                                                  
 derivative                                                                
 liablility              -          -            -            -          - 
Non-cash                                                                   
 expenses                                                                  
 related to                                                                
 services                -          -            -            -          - 
Pre-opening                                                                
 expenses           12,515          -            -            -    237,918 
Depreciation and                                                           
 amortization      195,117     49,393      263,909        6,000     21,960 
Income taxes        24,014          -            -       33,160          - 
                 ---------  ---------  -----------  ----------- ---------- 
Adjusted EBITDA  $ 315,590  $  16,915  $  (273,295) $   268,014 $    7,605 
                 =========  =========  ===========  =========== ========== 
Total                                                                      
 Restaurants                                                               
 EBITDA          $       -  $       -  $         -  $         -            
                                                                           
                                                                           
Six months ended                                                           
 June 30, 2013:                       Restaurants only                     
                    South                                                  
                   Africa     Hungary                                      
                 ---------  ---------                                      
Net loss from                                                              
 continuing                                                                
 operations      $(194,026) $(155,031)                                     
G&A to                                                                     
 management                                                                
 segment           157,347     79,246                                      
                 ---------  ---------                                      
GAAP net loss      (36,679)   (75,785)                                     
Interest expense    22,490          -                                      
Pre-opening                                                                
 expenses           10,201          -                                      
Gain on debt                                                               
 extinguishment    (70,900)                                                
Depreciation and                                                           
 amortization      184,953     55,872                                      
Income taxes        21,197          -                                      
                 ---------  ---------                                      
Adjusted EBITDA  $ 131,262  $ (19,913)                                     
                 =========  =========                                      
Total                                                                      
 Restaurants                                                               
 EBITDA                                                                    
                                                                           
                                                                           
Six months ended                                                           
 June 30, 2014:                                                            
                             Hoot Pac                                      
                      JF        NW        Spoon    Management     Totals   
                  --------- ---------  ---------  -----------  ----------- 
GAAP net loss     $  56,960 $ (38,057) $(101,213) $(1,612,135) $(2,990,902)
G&A to                                                                     
 management         159,105   119,952     12,000   (1,052,181)           - 
                  --------- ---------  ---------  -----------  ----------- 
GAAP net loss       216,065    81,895    (89,213)  (2,661,430) $(2,988,016)
Interest expense                                                           
 (income)                 -         -          -      661,414      687,590 
Change in fair                                                             
 value of                                                                  
 derivative                                                                
 liablility               -         -          -     (704,200)    (704,200)
Non-cash                                                                   
 expenses                                                                  
 related to                                                                
 services                 -         -          -      375,507      375,507 
Pre-opening                                                                
 expenses               548         -          -            -      250,981 
Depreciation and                                                           
 amortization        93,219    93,667     50,692        3,418      777,375 
Income taxes              -         -          -      (64,683)      (7,509)
                  --------- ---------  ---------  -----------  ----------- 
Adjusted EBITDA   $ 309,832 $ 175,562  $ (38,521) $(2,389,974) $(1,608,272)
                  ========= =========  =========  ===========  =========== 
Total                                                                      
 Restaurants                                                               
 EBITDA           $       - $       -  $ 781,702  $         -              
                                       =========                           
                                                                           
Six months ended                                                           
 June 30, 2013:                                                            
                                                   Management     Totals   
                                                  -----------  ----------- 
Net loss from                                                              
 continuing                                                                
 operations                                       $(1,148,479) $(1,497,536)
G&A to                                                                     
 management                                                                
 segment                                             (236,593)           - 
                                                  -----------  ----------- 
GAAP net loss                                      (1,385,072)  (1,497,536)
Interest expense                                       32,896       55,386 
Pre-opening                                                                
 expenses                                                   -       10,201 
Gain on debt                                                               
 extinguishment                                                    (70,900)
Depreciation and                                                           
 amortization                                           3,275      244,100 
Income taxes                                                -       21,197 
                                                  -----------  ----------- 
Adjusted EBITDA                                   $(1,348,901) $(1,237,552)
                                       ---------  ===========  =========== 
Total                                                                      
 Restaurants                                                               
 EBITDA                                $ 111,349                           
                                       =========                           

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@ThingsExpo Stories
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happens, where data lives and where the interface lies. For instance, it's a mix of architectural styles ...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and assessments, including a decade of leading incident response and digital forensics. He is co-author of t...
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrategies, will examine why IT must finally fulfill its role in support of its SBUs or face a new round of...
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, described an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-device experiences grounded in people's real needs and desires.
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps, abiding by privacy concerns and making the concept a reality. These challenges can't be addressed w...
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. According to a recent IDG Research Services Survey this rate of traffic will only grow. What's driving t...
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) i...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
Bit6 today issued a challenge to the technology community implementing Web Real Time Communication (WebRTC). To leap beyond WebRTC’s significant limitations and fully leverage its underlying value to accelerate innovation, application developers need to consider the entire communications ecosystem.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.