2 Table of Contents

OnTable August 6, 2004, we closed a transaction with Sovereign Roadhouse LLC, a wholly-owned subsidiary of Sovereign Investment Company, (“Sovereign”) involving the sale and leaseback of eleven restaurant properties that we had previously owned. The sale price for the eleven properties was $21.8 million. The properties are being leased from Sovereign under lease agreements that extend for 20 years and include four five-year renewal options. We used approximately $18.1 million of the net proceeds from the sale to pay expenses related to the transaction and approximately $24.6 million of secured debt, which was repaid at a discount (resulting in a gain on extinguishment of debt of approximately $7.1 million). The net gain from the debt repayment will be reflected in our consolidated financial statements in the second quarter of fiscal 2005. We also realized a gain on the sale of the properties of approximately $1.7 million, which will be recorded as a reduction of occupancy and other expense over the life of the leases. The remaining net proceeds from the sale, of approximately $3.7 million, will be used for working capital, including new marketing initiatives to promote our existing restaurants. See Note 20 of Notes to Consolidated Financial Statements and Item 7. “Management’s Discussion of Financial Condition and Results of Operations.” Contents

•Table The efforts we make from time to time (including advertising and promotional programs) to increase our sales, and the success or failure of those programs; • The results of our continual efforts to manage our labor costs, food costs, other restaurant costs and corporate expenses; • Our ability to acquire an adequate supply of food products at acceptable prices, and events that affect the availability and pricing of food products (such as instances of mad cow disease); • Our ability to recruit, train and retain qualified management personnel and to obtain sufficient numbers of qualified restaurant employees; • The level of competition from existing or new competitors in the markets in which our restaurants are located; • Trends in consumer preferences, tastes and eating habits and competition for consumer dollars, both from restaurants similar to our restaurants and from restaurants generally; and • U. S. domestic economic conditions, particularly in the markets in which we operate, and the impact of international conflicts on domestic economic conditions.Contents

OurTable operations depend upon frequent deliveries of quality food products. We are routinely exposed to the risks that shortages or interruptions in supply can occur and adversely affect the availability, quality and cost of these critical food products. Regional weather conditions may also adversely affect product supply and quality. We have in the past experienced difficulty in obtaining adequate supplies of food products, or at a cost that allowed such products to be sold on a profitable basis. There can be no assurance that future food supply shortages or interruptions, especially with respect to steak products, might not have a material adverse effect on our sales, operations and profitability. Contents

WETable AREof DEPENDENT UPON OUR EXECUTIVE OFFICERS AND KEY EMPLOYEES. Contents

TheTable federal Americans with Disabilities Act prohibits discrimination on the basis of disability in public accommodations and employment. We are required to comply with the Americans with Disabilities Act and regulations relating to accommodating the needs of the disabled in connection with the construction of new facilities and with significant renovations of existing facilities, which will over time require an incremental capital investment by us. Contents

OurTable commonof stock is currently quoted on the “pink sheets.” The fact that our common stock is not listed on the NASDAQ stock market or on a stock exchange is likely making trading our shares difficult for broker-dealers, shareholders and investors. It may also make it more difficult for us to raise additional equity capital in the future. While we hope to relist our common stock on a nationally recognized market in the future, there can be no assurance that our common stock will qualify for trading or quotation on a nationally recognized market in the future. Contents

TheTable 68 company-owned Roadhouse Grill restaurants that were open for the entire 52 weeks in the fiscal year ended April 25, 2004 (fiscal 2004) generated average net sales of approximately $2.0 million, average restaurant-level cash flow (restaurant net sales less cost of restaurant sales, excluding pre-opening expenses) of $159,000 and average operating income (restaurant-level cash flow less depreciation and amortization) of $60,000. Contents

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OhioTable franchisee. In March 2002, we entered into a Master Development Agreement with NAHI, Inc., granting the exclusive right to build five restaurants in five years in the Cincinnati/Tri State area of Ohio and Kentucky. In order to maintain these exclusive rights, the franchisee must comply with the terms of the agreement including, but not limited to, opening one restaurant per year. As of April 25, 2004, the franchisee has not complied with the development schedule. However, we have not taken any action in regards to terminating the agreement to date, although we reserve the right to do so. Currently, there is one restaurant open pursuant to this Master Development Agreement. Contents

BANKRUPTCY Table of Contents

PARTTable II of Contents

26 Table of Contents

SeeTable Item 12. of Contents

29 Table of Contents

RECENTTable EVENTS of Contents

PROPERTYTable ANDof EQUIPMENT Contents

RESULTSTable OFof OPERATIONS Contents

Pre-openingTable expenses. We recorded $0.1 million in pre-opening expenses during each of fiscal year 2004 and 2003 relating to the opening of two new restaurants in April and June 2003. Contents

ExtraordinaryTable gain. We recognized an extraordinary gain during fiscal year 2003 of $1.8 million relating to the forgiveness of debt resulting from the Chapter 11 reorganization. The debt forgiveness is primarily comprised of obligations that were canceled as a result of the bankruptcy proceedings. No extraordinary gain was recorded during fiscal year 2004. Contents

OccupancyTable and other. Occupancy and other costs decreased $3.0 million, or 8.0%, to $34.6 million for fiscal year 2003 from $37.6 million for fiscal year 2002. As a percentage of sales, occupancy and other was 24.5% for fiscal year 2003 versus 23.7% for fiscal year 2002. The increase as a percentage of sales is due to the fixed nature of certain components of occupancy and other costs, such as rent expense, as well as an increase in marketing and advertising expenses incurred, which represented 2.4% of total revenues in fiscal year 2003 as compared to 1.6% in fiscal year 2002 and an increase in general and employers’ practice liability expenses which increased from 0.5% of revenues in fiscal year 2002 to 0.9% of revenues in fiscal year 2003. Contents

IncomeTable tax (benefit) expense. We recorded an income tax benefit of $1.2 million for fiscal year 2003, compared to an income tax expense of approximately $0.1 million for fiscal year 2002. The credit recorded in fiscal year 2003 was due to the recording of a federal income tax refund, partially offset by state income and franchise taxes. The expense recorded in fiscal 2002 was due to state income and franchise taxes. We did not recognize a tax benefit relating to the operating loss for fiscal year 2003 or fiscal year 2002 because management believes that it is not likely that all of our deferred tax assets will be realized in the future. Contents

39 Table of Contents

TotalTable other expense. Based on the current debt and capital lease obligations outstanding, the significant debt payments made in fiscal 2004, and the debt payments made in connection with the recent sale and leaseback transaction, we presently anticipate that total other expense, which is primarily comprised of interest expense, will decrease significantly in fiscal 2005 and will range between $1.3 million and $1.5 million in fiscal 2005. Contents

OtherTable commitmentsof represent minimum amounts due to certain vendors under contractual agreements. Amounts reflected above could change as additional commitments may be made, cancellation provisions may be exercised by us or by our creditors, or agreements may be modified as warranted by changes in business or operational needs. Amounts due under long-term debt agreements may be accelerated to the extent that we realize excess cash flow as described in Note 7 to the Consolidated Financial Statements. Contents

WeTable expect that our primary source of working capital for future periods will be cash flow from operations, proceeds from the sale/leaseback, additional advance sales of food and beverage credits and possible additional debt and/or equity financing. Contents

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45 Table of Contents

ITEMTable 8.of FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAContents

AymanTable Sabi has been our President and Chief Executive Officer since February 1998. He served as Chairman of our Executive Committee from November 1997 to February 1998. Mr. Sabi became a director in February 1997. Mr. Sabi has served as the Chairman and Chief Executive Officer of SABi International Developments, Inc., a trading, contracting and investment company which owns, operates and invests in various restaurant and retail concepts, both domestically and internationally since 1989. Contents

ForTable biographicalof information about Messrs. Sabi and Lee, see “Executive Officers” above. Contents

(1)Table Allof Options awarded under the 2003 Stock Option Plan.Contents

NoTable option granted under the plan is assignable or transferable, other than by will or by the laws of descent and distribution. During the lifetime of an optionee, an option is exercisable only by the optionee. The expiration date of an option is determined by the plan’s administrators at the time of the grant, but in no event may an option be exercised after the expiration of 10 years from the date of grant. The vesting schedule for an option will be determined by the plan administrators and will be set forth in a written agreement between us and the optionee. The plan’s administrators may, in their sole discretion, accelerate the date on which any option may be exercised. In the event of certain transactions, including certain changes in control, certain mergers and reorganizations, and certain dispositions of substantially all our assets, the plan administrator’s have the discretion to provide on a case-by-case basis that the option will automatically become exercisable or will terminate. If the option is terminated upon a change of control, the optionee will have the right prior to the change of control to exercise any vested option. Contents

COMPENSATIONTable COMMITTEEof INTERLOCKS AND INSIDER PARTICIPATION Contents

SecurityTable Ownership of Principal Shareholders Contents

EquityTable Compensationof Plan Information Contents

Audit-RelatedTable Fees of Contents

FeesTable billedof by Grant Thornton for tax services, including tax compliance and tax consulting, were approximately $31,000 for fiscal year 2004 and $209,000 for fiscal year 2003. Contents

(a)Table The following documents are filed as part of this Form 10-K.Contents

62 Table of Contents

ROADHOUSETable GRILL, INC. By: /s/ Michael C. Brant Michael C. Brant Executive Vice President of Finance and Chief Financial OfficerContents

REPORTTable OFof INDEPENDENT REGISTED PUBLIC ACCOUNTING FIRM Contents

F-1 Table of Contents

F-2 Table of Contents

F-3 Table of Contents

ROADHOUSETable GRILL,of INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY For the Fifty-Two Weeks Ended April 25, 2004, April 27, 2003, and April 28, 2002 ($ in thousands) Contents

TheTable Consolidated Financial Statements contained herein have been prepared on a going concern basis, which assumes continuity of operations and realization of assets and satisfaction of liabilities in the ordinary course of business, and in accordance with SOP 90-7. The ability of the Company to continue as a going concern is predicated upon, among other things, the Company’s ability to generate cash flow from operations to service debt and pay capital and operating lease obligations, the ability to otherwise meet its operating expenses, and the ability to obtain sufficient financing or other resources to satisfy future obligations to the extent not covered by cash flow from operations. Contents

Thereafter,Table Restaurants Acquisition I, Inc., an entity affiliated with the Petitioning Creditors, filed a competing plan of reorganization, dated July 15, 2002 (the “R

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(MARK ONE)


(MARK ONE)

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the Fiscal Year Ended April 24, 2005

		OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the transition period from to

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended April 25, 2004

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to _________

Commission File Number: 0-28930

ROADHOUSE GRILL, INC.

(Exact Name of Registrant as Specified in its Charter)

Florida		65-0367604
(State or Other Jurisdiction of		(I.R.S. Employer Identification No.)
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
Incorporation or Organization)

2703-A GATEWAY DRIVE, POMPANO BEACH, FL 33069 (Address of Principal Executive Offices and Zip Code)

(Address of Principal Executive Offices and Zip Code)

Registrant’s telephone number, including area code (954) 957-2600

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


Title of Each Class		Name of Each Exchange on Which Registered

NONE		NOT APPLICABLE

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

COMMON STOCK, PAR VALUE $0.03 PER SHARE
(Title of Class)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [Xþ ] No ~~[ ]~~o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes ~~[ ]~~o No ~~[X]~~þ

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [Xþ ] No ~~[ ]~~o

The number of shares of the registrant’s common stock outstanding as of August 612, ~~2004~~2005 was 29,220,663.

DOCUMENTS INCORPORATED BY REFERENCE

None.

ROADHOUSE GRILL, INC.

FORM 10-K FISCAL YEAR ENDED APRIL 2524, ~~2004~~2005

INDEX

		Page
PART I
Item 1.	Business		6
Item 2.	Properties		2322
Item 3.	Legal Proceedings		2422
Item 4.	Submission of Matters to a Vote of Security Holders		2522
PART II
Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters		2623
Item 6.	Selected Financial Data		2825
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		3027
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk		4641
Item 8.	Financial Statements and Supplementary Data		4742
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		4742
Item 9A.	Controls and Procedures		4742
PART III
Item 10.	Directors and Executive Officers of the Registrant		4843
Item 11.	Executive Compensation		5045
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		5450
Item 13.	Certain Relationships and Related Transactions		5652
Item 14.	Principal Accountant Fees and Services		5753
PART IV
Item 15.	Exhibits, Financial Statement Schedules and Reports on Form 8-K		5955
SIGNATURES
Trademark License Agreement
Employee Severance Agreement - Ayman Sabi
Purchase Agreement
Amended & Restated Retention & Severance Agreement - Michael Brant
Sec. 302 Chief Executive Officer Certification
Employee Severance Agreement - Kok Kay (Alain) Lee
Sec. 302 Chief Financial Officer Certification
Employee Severance Agreement - Mark Rogers
Sec. 906 Chief Executive Officer Certification
Employee Severance Agreement - David Foulke
Sec. 906 Chief Financial Officer Certification
Employee Severance Agreement - Dorothy Blalock
Employee Severance Agreement - Kenneth Fordik
2005 Special Incentive Compensation Plan
Loan Agreement
Line of Credit Promissory Note
Security Agreement
Section 302 CEO Certification
Section 302 CFO Certification
Section 906 CEO Certification
Section 906 CFO Certification

FORWARD LOOKING STATEMENTS

This report contains “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements concern expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Statements preceded by, followed by, or that include the words “believes,” “expects,” “anticipates,” or similar expressions are generally considered to be forward-looking statements. Specifically, this report contains forward-looking statements regarding, among other matters, our strategies, plans, objectives, expectations, future market position, operations, cash flow, margins, revenue, profitability, restaurant-level economics, liquidity and capital resources.

Forward looking statements contained in this report are not guarantees of future performance and involve certain risks, uncertainties and assumptions, all of which are difficult to predict. We wish to caution readers that certain important factors have affected in the past and may affect in the future our actual results, and such factors could cause actual results to differ significantly from those expressed or implied in any forward looking statement contained in this report. Important factors that could cause actual results to differ materially from those expressed or implied by the forward looking statements in this report include, but are not limited to, the following:

• Our having sufficient working capital to meet our future operating and capital requirements; • Our ability to ~~manage our debt and~~ comply with the terms of our debt instruments, operating leases, ~~and~~ capital leases and vendor contracts; • Our ability to increase our sales and manage our labor costs, food costs, other restaurant costs and corporate expenses, and our ability to operate our business on a cash flow positive and profitable basis; • Our ability to acquire an adequate supply of food products at acceptable prices, and events that affect the availability and pricing of food products (such as instances of mad cow disease); • Our ability to recruit, train and retain qualified management personnel and to obtain a sufficient number of qualified restaurant employees; • Trends in consumer preferences, tastes and eating habits and competition for consumer dollars, both from restaurants similar to our restaurants and from restaurants generally; • The level of competition from restaurants that operate in the markets in which we operate; • U. S. domestic economic conditions and the impact of international conflicts on domestic economic conditions; • The impact of seasonality on our business, resulting from having ~~more~~33 ~~than~~of ~~half~~our 67 Company-owned restaurants in Florida; • Our exposure to the impact of hurricanes and other tropical storms as a result of the heavy concentration of our restaurants in ~~Florida~~the southeastern United States; • Our ability to maintain financial and accounting controls, management controls, and adequate reporting systems and procedures; • Increases in interest rates; • The future relisting of our common stock on a recognized securities market and the development of a market for our common stock; • Our ability to develop our restaurant concept and business beyond our existing configuration of restaurants, including the availability of financing to support future growth, our ability to find suitable locations for new restaurants and the costs associated with opening new restaurants; and • To the extent that we decide to further franchise our restaurant concept, our ability to locate suitable franchisees in markets which we do not serve (both nationally and internationally) and the ability of those franchisees to develop, open and successfully operate restaurants in those markets.

• Increases in interest rates; • The future relisting of our common stock on a recognized securities market and the development of a market for our common stock; • Our ability to develop our restaurant concept and business beyond our existing configuration of restaurants, including the availability of financing to support future growth, our ability to find suitable locations for new restaurants and the costs associated with opening new restaurants; and • To the extent that we decide to further franchise our restaurant concept, our ability to locate suitable franchisees in markets which we do not serve (both nationally and internationally) and the ability of those franchisees to develop, open and successfully operate restaurants in those markets.

The forward looking statements contained in this report reflect our current view about future events and are subject to risks, uncertainties and assumptions. The important factors described above, as well as the factors described elsewhere in this report, could cause the assumptions underlying our forward looking statements to be incorrect and thereby cause our actual results to differ materially from those expressed in or implied by our forward looking statements. We undertake no obligation to revise any of the forward looking statements contained in this report, which speak only as of the date hereof. Readers of this report are therefore cautioned not to place undue reliance on these forward looking statements.

PART I

ITEM 1. BUSINESS

GENERAL

We operate, franchise and license high-quality, full-service casual dining restaurants under ~~the~~ the name “Roadhouse Grill.” WeAs ~~currently~~of ~~operate~~April 24, 692005, there were 68 Company-owned Roadhouse Grill restaurants, 3433 of which are located in Florida and the balance of which are located in Alabama, Arkansas, Georgia, Louisiana, Mississippi, New York, North Carolina, Ohio, and South Carolina. Subsequent ~~There~~to ~~are~~April 24, ~~also~~2005, 11one ~~Roadhouse~~restaurant ~~Grill~~was ~~restaurants~~closed ~~currently~~upon inthe ~~operation that~~termination ~~are~~of ~~operated~~the byrelated ~~franchisees and licensees~~lease. ~~Franchised and licensed restaurants are~~ ~~located~~We inalso ~~Malaysia~~have ~~(3),~~12 ~~Brasilia,~~franchised ~~Brazil~~or ~~(1),~~licensed ~~Las Vegas, Nevada (1), Cincinnati, Ohio (1) and Italy (5)~~restaurants.

~~Our~~ During ~~primary~~the last few years, our restaurant business ishas ~~the~~been ~~operation~~hampered ofby ~~full-service,~~heavy ~~casual~~debt ~~dining~~and ~~restaurants~~shortages of working capital to operate our business. ~~Roadhouse~~We ~~Grill~~have ~~restaurants~~also ~~offer~~experienced a ~~diverse,~~continuing decline ~~moderately~~in ~~priced lunch~~restaurant ~~and~~sales ~~dinner~~due ~~menu~~to, ~~highlighting~~among ~~exhibition~~other ~~cooking~~issues, our lack of ~~steaks~~resources ~~and~~to ~~other~~adequately market ~~grilled~~our ~~entrees.~~restaurants, Incompetition ~~addition~~in tothe ~~steaks~~markets where we operate and ~~other~~economic ~~grilled~~conditions ~~items~~generally. Further, ~~our restaurants~~we ~~feature~~have ~~daily~~experienced ~~fresh~~substantial ~~baked~~food ~~yeast~~cost ~~rolls~~increases, ~~free~~primarily ~~peanuts~~driven ~~and~~by ~~certain~~higher beef ~~appetizers~~prices, asonly ~~signature~~a ~~items.~~portion ~~Guest~~of ~~satisfaction~~which ~~comes~~we ~~from~~have abeen ~~pleasant~~able to pass on to our customers. All of these ~~restaurant~~factors ~~atmosphere~~have incaused ~~which~~us ~~high-quality~~to ~~food~~report ~~and~~significant ~~beverages~~net ~~are~~losses ~~served~~from atoperations during the last few years ~~competitive~~and ~~prices.~~had ~~The~~a ~~key~~material ~~elements~~negative ~~that~~impact ~~define~~on ~~the~~our ~~Roadhouse~~working ~~Grill~~capital ~~concept~~and cash position. ~~are:~~

• During ~~Premium~~the ~~Quality~~last ~~Grilled~~year, ~~Entrees~~we ~~and~~have arevamped ~~Diverse~~our ~~Menu.~~menu, ~~Roadhouse~~made ~~Grill~~additional ~~restaurants~~investments ~~offer~~in athe ~~wide~~recruiting and ~~variety~~training of ~~steaks,~~our ~~chicken,~~restaurant ~~seafood~~managers and ~~other~~directors ~~entrees, many~~ of ~~which~~operations, ~~are~~entered ~~grilled~~into ~~in an exhibition style kitchen. • High Price/Value to Guests. Roadhouse Grill restaurants strive to provide~~ a ~~high~~long-term program ~~price/value~~with ~~dining experience for our guests by offering~~ a ~~broad,~~loyalty ~~moderately priced menu~~ and ~~serving~~rewards ~~high~~company ~~quality generous portions. • Attentive, Friendly Service. We believe~~ that ~~a distinctive, enjoyable dining experience is made possible through excellent service. Accordingly,~~ we ~~seek~~believe towill ~~hire~~help ~~restaurant managers and other restaurant personnel who possess strong initiative and the ability~~ to ~~provide~~market ~~quality~~our ~~and personalized service. • Spacious~~restaurants, taken ~~Open~~steps ~~Layout. Roadhouse Grill restaurants are designed~~ to ~~have~~reduce aour ~~fun~~costs and ~~casual~~attempted ~~atmosphere. The interior of each restaurant is large, open and visually appealing, with exposed ceilings designed~~ to ~~create~~pass a ~~casual~~portion ~~ambiance.~~of •the ~~Broad~~increased ~~Customer~~food ~~Appeal.~~costs ~~The~~on ~~Roadhouse Grill concept is designed~~ to our ~~appeal to a broad range of~~ customers, ~~including~~all ~~business~~in ~~people,~~an ~~couples,~~effort ~~singles and, particularly, families. We believe that~~ to bereturn ~~attractive~~our tocompany ~~families, a concept must be appealing~~ to ~~both children and parents~~profitability. ~~Consequently,~~There ~~Roadhouse~~can ~~Grill~~be ~~restaurants~~no ~~furnish~~assurance that ~~children~~we ~~with~~will ~~coloring~~become ~~menus,~~profitable ~~balloons~~in and a free souvenir cup. In addition, each restaurant offers a special “Kids’ Menu” featuring an assortment of entrees. For adults, each Roadhouse Grill restaurant offers alcoholic beverages from its full-service bar, which is separated from the ~~dining area~~future.

6 Our primary business is the operation of full-service, casual dining restaurants. Roadhouse Grill restaurants offer a diverse, moderately priced lunch and dinner menu highlighting exhibition cooking of steaks and other grilled entrees. In addition to steaks and other grilled items, our restaurants feature daily fresh baked yeast rolls, free peanuts and certain appetizers as signature items. Guest satisfaction comes from a pleasant restaurant atmosphere in which high-quality food and beverages are served at competitive prices. The key elements that define the Roadhouse Grill concept are:

~~Table~~• Premium Quality Grilled Entrees and a Diverse Menu. Roadhouse Grill restaurants offer a wide variety of ~~Contents~~steaks, chicken, seafood and other entrees, many of which are grilled in an exhibition style kitchen. • High Price/Value to Guests. Roadhouse Grill restaurants strive to provide a high price/value dining experience for our guests by offering a broad, moderately priced menu and serving high quality generous portions. • Attentive, Friendly Service. We believe that a distinctive, enjoyable dining experience is made possible through excellent service. Accordingly, we seek to hire restaurant managers and other restaurant personnel who possess strong initiative and the ability to provide quality and personalized service. • Spacious, Open Layout. Roadhouse Grill restaurants are designed to have a fun and casual atmosphere. The interior of each restaurant is large, open and visually appealing, with exposed ceilings designed to create a casual ambiance.

~~RECENT EVENTS~~5

~~RISK~~• ~~FACTORS~~ Broad Customer Appeal. The Roadhouse Grill concept is designed to appeal to a broad range of customers, including business people, couples, singles and, particularly, families. We believe that to be attractive to families, a concept must be appealing to both children and parents. Consequently, Roadhouse Grill restaurants furnish children with coloring menus, balloons and a free souvenir cup. In addition, each restaurant offers a special “Kids’ Menu” featuring an assortment of entrees. For adults, each Roadhouse Grill restaurant offers alcoholic beverages from its full-service bar, which is separated from the dining area.

WEENGAGEMENT ~~HAVE~~OF ~~EXPERIENCED~~INVESTMENT ~~SIGNIFICANT~~BANKING ~~LOSSES FROM OPERATIONS AND CASH FLOW PROBLEMS~~FIRM ~~IN THE PAST.~~

We On ~~emerged~~April 25, ~~from~~2005, awe ~~Chapter 11~~engaged ~~reorganization~~the ~~proceeding~~investment onbanking ~~September 20, 2002.~~firm ~~See~~of ~~Note~~J. 2H. ofChapman, ~~Notes~~L.L.C. to ~~Consolidated~~explore strategic ~~Financial~~alternatives ~~Statements~~ for ~~information about~~the ~~our~~Company. ~~Chapter 11~~J. ~~proceeding~~H. ~~During~~Chapman, ~~the~~which ~~last~~was ~~three~~founded ~~fiscal~~in ~~years,~~1982 ~~our~~and ~~net~~is ~~losses~~headquartered ~~were~~in ~~$6.0 million~~Rosemont, ~~$11.2 million and $21.4 million. Further~~Illinois, weis ~~have experienced~~the ~~substantial~~leading ~~cash~~investment ~~flow~~banking ~~problems~~firm specializing in the food ~~past,~~industry. ~~and~~With ~~may~~the doassistance soof ~~again~~J. ~~in the future~~H. ~~There~~Chapman, ~~can~~we beare noexploring ~~assurance~~potential strategic options that wemay ~~will~~ be ~~able~~available to ~~achieve~~us. ~~and sustain~~However, ~~profitable~~to ~~and~~date, ~~cash~~no ~~flow~~agreements ~~positive~~have ~~operations~~been executed.

~~OUR~~SALE/LEASEBACK ~~PROFITABILITY IS DEPENDENT IN LARGE MEASURE ON FOOD AND SUPPLY COSTS WHICH~~TRANSACTION ~~ARE NOT WITHIN OUR CONTROL.~~

~~Our~~ On ~~ability~~August 6, to2004, ~~operate~~we ~~our~~entered ~~business~~into on a ~~profitable~~sale/leaseback ~~and~~for ~~cash~~11 ~~flow~~restaurant ~~positive~~properties with ~~basis~~Sovereign isRoadhouse ~~dependent~~LLC, ina ~~part~~wholly-owned onsubsidiary ~~our~~of ~~ability~~Sovereign toInvestment ~~deal~~Company ~~with~~(“Sovereign”). The ~~changes~~sale inprice ~~food~~for ~~costs and~~the ~~matters~~11 ~~that~~properties ~~effect~~was ~~the~~$21.8 million. ~~supply~~The ofproperties ~~necessary~~have ~~food~~been ~~products~~leased toback ~~our~~under ~~restaurants.~~lease ~~Various~~agreements ~~factors,~~that ~~many~~extend offor ~~which~~20 years ~~are~~and ~~beyond~~include ~~our~~four ~~control,~~five-year ~~affect~~renewal ~~food~~options. We used ~~costs~~approximately ~~and~~$18.3 million of the ~~availability~~net ofproceeds ~~certain~~from ~~food~~the ~~products,~~sale ~~including~~to ~~climatic~~repay approximately $24.6 million ~~changes~~of secured debt, ~~disease~~which orwas ~~illness~~repaid inat ~~beef~~a ~~cattle~~discount (~~such~~resulting asin ~~mad~~a ~~cow~~gain ~~disease)~~on ~~that~~extinguishment ~~could~~of debt of ~~impact~~approximately ~~supply~~$7.1 million) inand ~~the~~to ~~marketplace,~~pay ~~and~~transaction ~~government~~expenses ~~regulations.~~relating ~~Specifically,~~to wethe sale/leaseback. The ~~are~~net ~~dependent~~gain infrom the ~~operation~~debt ofrepayment is reflected in our ~~business~~consolidated onstatement ~~frequent,~~of ~~timely~~operations ~~deliveries~~for the offiscal ~~beef,~~year ~~poultry~~ended April 24, ~~seafood~~2005. ~~and~~We ~~produce,~~also ~~which~~realized ~~subjects~~a ~~our~~gain ~~business~~on tothe sale of the ~~risks~~ properties of approximately ~~possible~~$1.7 million, ~~shortages~~which oris ~~interruptions~~recorded inas ~~supply~~unearned ~~caused~~revenue byin ~~adverse~~the ~~weather~~consolidated orbalance sheet ~~other~~as ~~conditions~~of ~~which~~April 24, ~~could~~2005 ~~adversely~~and ~~affect~~will ~~the~~be ~~availability~~recorded ~~and~~as ~~costs~~a reduction of ~~these~~ ~~items.~~occupancy ~~These~~and ~~factors~~other ~~have~~expense inover the life ~~past~~of ~~and~~the ~~could~~leases. inThe remaining net proceeds from the ~~future~~sale ~~materially~~of approximately $3.5 million were ~~affect~~used ~~our~~for ~~business~~general ~~and~~corporate ~~results~~purposes, ofincluding ~~operations~~working capital to meet our ordinary course expenses.

~~OUR OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY~~ LOAN FROM ~~QUARTER~~MAJORITY ~~TO QUARTER DUE~~SHAREHOLDER ~~TO VARIOUS FACTORS BEYOND OUR CONTROL, INCLUDING SEASONALITY.~~

~~Our~~ On August 10, ~~operating~~2005, ~~results~~we ~~have~~obtained ina ~~the~~$1,250,000 ~~past~~loan ~~and~~from ~~are~~our ~~likely in the future to~~majority ~~fluctuate~~shareholder. ~~seasonally~~The ~~because~~loan ofis ~~the~~being ~~geographic~~used ~~concentration~~for ofworking ~~our~~capital ~~operations~~ in ~~Florida, where 34 of~~ our business. ~~restaurants~~See ~~are located~~Item 7. ~~Restaurant~~“Management’s ~~sales~~Discussion ~~in our~~and ~~Florida~~Analysis ~~restaurants~~of ~~generally~~Financial ~~increase~~Condition ~~from~~and ~~November~~Results ~~through April, the peaks~~ of Operations — Liquidity ~~the~~and ~~Florida~~Capital ~~tourism~~Resources” ~~season,~~ and Note 22 ~~generally~~of ~~decrease~~Notes ~~from~~to ~~May~~Consolidated ~~through~~Financial ~~October~~Statements. ~~Further, the results of~~

7RISK FACTORS

~~Table~~WE ofHAVE ~~Contents~~EXPERIENCED SIGNIFICANT LOSSES FROM OPERATIONS AND CASH FLOW PROBLEMS IN THE LAST THREE YEARS.

~~operations~~ We ofemerged ~~our~~from ~~Florida~~a ~~restaurants~~Chapter 11 ~~and~~reorganization ~~thereby~~proceeding ~~our~~on ~~overall~~September 20, ~~results~~2002. ~~of operations~~See ~~have~~Note in2 ~~the~~of Notes ~~past and may continue in the future~~ to beConsolidated ~~materially adversely~~Financial ~~affected~~Statements byfor ~~declines~~information inabout ~~tourism~~our inChapter 11 ~~Florida,~~proceeding. ~~downturns in~~ During the ~~Florida economy~~last orthree byfiscal ~~hurricanes~~years, orour ~~other~~net ~~adverse~~losses ~~weather~~were ~~conditions~~$2.4 million, ~~in Florida~~$6.0 million ~~To offset these seasonal trends~~ and to$11.2 million. ~~attempt~~Net losses tofrom ~~reduce~~operations ~~the~~were ~~decline~~$7.5 million in ~~sales during~~fiscal ~~the off-season~~2005, we$3.0 million ~~generally~~in ~~run~~fiscal ~~special~~2004 ~~promotions for our customers during off-peak periods~~ and ~~incentive contests for our employees~~$12. ~~Also,~~1 ~~adverse~~million ~~publicity~~ in ~~Florida~~fiscal ~~relating~~2003. toFurther, ~~Roadhouse~~we ~~Grill restaurants could~~ have a ~~more~~experienced ~~pronounced~~substantial ~~effect~~cash onflow ~~our~~problems ~~results~~in ~~of operations than might be~~ the ~~case if~~past, ~~our~~and ~~restaurants~~may ~~were broadly dispersed geographically. Although we currently~~ have ~~more~~such ~~restaurants~~problems ~~outside~~again ~~Florida~~in ~~than~~the ~~inside~~future. ~~Florida,~~There ~~our~~can ~~non-Florida restaurants~~be ~~are~~no ~~more~~assurance ~~broadly~~that ~~disbursed~~we ~~among~~will abe ~~wide~~able ~~geographic~~to achieve ~~area,~~ and ~~therefore~~ ~~have~~sustain ~~not~~profitable ~~materially~~and ~~affected~~cash ~~the~~flow ~~historical~~positive ~~seasonality of our business~~operations.

~~In addition to seasonality, our quarterly and annual operating results and~~6 ~~our comparable restaurant sales may fluctuate significantly from period to~~ ~~period as a result of a variety of factors, including:~~

InOUR ~~addition,~~PROFITABILITY ~~our~~IS ~~quarterly~~DEPENDENT orIN ~~annual~~LARGE ~~results~~MEASURE ~~may~~ON beFOOD ~~affected~~AND bySUPPLY ~~costs associated~~COSTS ~~with~~WHICH ~~the~~ARE ~~opening~~NOT ofWITHIN ~~new restaurants during any period. We typically~~OUR ~~incur the most significant portion of preopening expenses associated with a newly opened restaurant within the two months immediately preceding and the month of the opening of the new restaurant~~CONTROL. ~~Further, we believe that the labor~~ and operating costs associated with a newly opened restaurant for the first several months of operation are materially greater than those expected after that time, both in aggregate dollars and as a percentage of revenues. Accordingly, the volume and timing of new restaurant openings has had in the past and may have in the future a meaningful impact on preopening expenses and labor and operating costs from period to period.

8 Our ability to operate our business on a profitable and cash flow positive basis is dependent in part on our ability to deal with changes in food costs and matters that affect the supply of necessary food products to our restaurants. Various factors, many of which are beyond our control, affect the pricing and availability of certain food products, including climatic changes, disease or illness in beef cattle (such as mad cow disease) that could impact supply in the marketplace, and government regulations. Specifically, we are dependent in the operation of our business on frequent, timely deliveries of beef, poultry, seafood and produce, which subjects our business to the risks of possible shortages or interruptions in supply caused by adverse weather or other conditions which could adversely affect the availability and costs of these items. These factors have in the past and could in the future materially affect our business and results of operations.

~~Table~~OUR ofOPERATING ~~Contents~~RESULTS MAY FLUCTUATE SIGNIFICANTLY FROM QUARTER TO QUARTER DUE TO VARIOUS FACTORS BEYOND OUR CONTROL, INCLUDING SEASONALITY.

~~OUR~~ Our ~~BUSINESS~~operating ISresults ~~IMPACTED~~have BYin ~~THE~~the ~~INTENSE~~past ~~COMPETITION~~and INare ~~THE~~likely ~~FULL~~in ~~SERVICE~~the ~~CASUAL~~future to fluctuate seasonally ~~DINING~~because ~~SECTOR~~of ~~AND~~the INgeographic ~~THE~~concentration ~~RESTAURANT~~of ~~INDUSTRY~~our ~~GENERALLY~~operations in Florida, where 33 of our restaurants are located. Restaurant sales in our Florida restaurants generally increase from November through April, the peaks of the Florida tourism season, and generally decrease from May through October. Further, the results of operations of our Florida restaurants and thereby our overall results of operations have in the past and may continue in the future to be materially adversely affected by declines in tourism in Florida, downturns in the Florida economy or by hurricanes or other adverse weather conditions in Florida. To offset these seasonal trends and to attempt to reduce the decline in sales during the off-season, we generally run special promotions for our customers during off-peak periods and incentive contests for our employees. Also, adverse publicity in Florida relating to Roadhouse Grill restaurants could have a more pronounced effect on our results of operations than might be the case if our restaurants were broadly dispersed geographically. Although we currently have more restaurants outside Florida than inside Florida, our non-Florida restaurants are more broadly disbursed among a wide geographic area, and therefore have not materially affected the historical seasonality of our business.

~~The~~ In ~~restaurant~~addition ~~industry,~~to ~~particularly the full-service casual dining segment~~seasonality, isour ~~highly~~quarterly ~~competitive.~~and Weannual ~~compete~~operating ~~with~~results aand ~~broad~~our ~~range of restaurants,~~comparable ~~including~~restaurant ~~national~~sales ~~and~~may ~~regional~~fluctuate ~~casual~~significantly ~~dining~~from ~~chains~~period asto ~~well~~period as ~~locally-owned restaurants,~~a ~~some~~result of ~~which~~a ~~operate~~variety ~~with concepts similar to ours. We believe~~of ~~that the competitive~~ factors ~~that are used by consumers to differentiate among restaurants include price~~, ~~service, location, concept and food quality,~~ including ~~taste, freshness, and nutritional value. We believe that we compete~~: effectively in our markets. However, many of our competitors possess substantially greater financial, marketing, personnel and other resources than we do and have greater brand name recognition than we do. We also compete with other restaurants and restaurant chains for sites for new restaurants and for employees.

We• ~~believe~~The ~~that~~efforts ~~the~~we ~~full-service~~make ~~casual~~(including ~~dining~~advertising ~~segment~~and ispromotional ~~likely~~programs) to ~~continue~~ toincrease ~~attract~~our asales, ~~significant~~and ~~number~~the ofsuccess ~~new~~or ~~entrants.~~failure Inof ~~addition,~~those ~~the full-service~~programs; ~~restaurant~~• ~~industry~~The isresults ~~characterized by the frequent introduction~~ of ~~new~~our ~~food~~continual ~~products,~~efforts ~~which~~to ~~are~~manage ~~accompanied~~our bylabor ~~substantial~~costs, ~~promotional campaigns.~~food ~~In recent years~~costs, ~~numerous~~other ~~companies~~restaurant incosts ~~the~~and ~~full-service~~corporate ~~casual restaurant~~expenses; ~~industry~~• ~~have~~Our ~~introduced~~ability ~~products intended~~ to ~~capitalize~~acquire onan ~~growing consumer~~adequate ~~preference~~supply ~~for~~of food products ~~which~~at ~~are,~~acceptable ~~or are perceived to be~~prices, ~~healthful,~~ ~~nutritious, low in calories, low in carbohydrates~~ and~~/or~~ ~~low~~events ~~in fat content. We believe~~ that weaffect ~~will~~the beavailability ~~subject~~and topricing ~~increasing~~of ~~competition~~food ~~from companies whose~~ products or(such ~~marketing~~as ~~strategies~~instances ~~address~~of ~~these~~mad ~~consumer preferences,~~cow ~~and~~disease); we• ~~may~~Our ~~need~~ability to ~~modify~~recruit, ortrain ~~refine~~and ~~elements~~retain ofqualified ~~our~~management ~~business~~personnel ~~in order~~and to ~~effectively~~obtain ~~compete~~sufficient ~~with~~numbers ~~popular~~of ~~new~~qualified restaurant ~~formats~~employees; or• ~~concepts that~~The ~~develop~~level ~~from~~of ~~time~~competition tofrom ~~time.~~existing ~~There~~or ~~can~~new becompetitors noin ~~assurance~~the ~~that~~markets ~~we will be successful~~ in ~~implementing~~which ~~any~~our ~~such~~restaurants ~~modifications.~~ are located;

~~WE ARE DEPENDENT UPON SUPPLY AND QUALITY OF FOOD PRODUCTS.~~7

~~OUR~~• ~~BUSINESS~~Trends ISin ~~AFFECTED~~consumer BYpreferences, ~~LITIGATION~~tastes ~~AND~~and ~~PUBLICITY~~eating ~~CONCERNING~~habits ~~FOOD~~and ~~QUALITY~~competition for consumer dollars, ~~HEALTH~~ ~~AND~~both ~~OTHER~~from ~~ISSUES~~restaurants ~~WHICH~~similar ~~CAN~~to ~~CAUSE~~our ~~GUESTS~~restaurants TOand ~~AVOID~~from ~~OUR~~restaurants ~~RESTAURANTS~~generally; ~~AND WHICH~~and ~~CAN~~• ~~RESULT~~U. INS. ~~LIABILITIES~~domestic economic conditions, particularly in the markets in which we operate, and the impact of international conflicts on domestic economic conditions.

~~Health~~ In ~~concerns~~addition, ~~including~~our ~~adverse~~quarterly ~~publicity~~or ~~concerning~~annual ~~food-related illness,~~results ~~whether~~may orbe ~~not~~affected ~~specifically~~by ~~related~~costs toassociated ~~our~~with ~~restaurants, could cause~~the ~~guests~~opening toof ~~avoid~~new ~~certain restaurant groups including our~~ restaurants, ~~thereby having~~during aany ~~negative impact on our sales~~period. We ~~may~~have ~~also~~historically beincurred the ~~subject~~most ofsignificant ~~complaints~~portion orof ~~litigation~~preopening ~~from~~expenses ~~guests~~associated ~~alleging~~with ~~food-related~~a ~~illness,~~newly ~~injuries suffered~~opened onrestaurant ~~our~~within ~~premises~~the ortwo ~~other~~months immediately ~~food~~preceding ~~quality,~~and ~~health~~the ormonth ~~operational~~of ~~concerns. A~~the ~~lawsuit~~opening orof ~~claim~~the ~~could~~new ~~result~~restaurant. inFurther, anwe ~~adverse~~believe ~~decision against us~~ that ~~could~~ ~~have~~the alabor ~~material~~and ~~adverse~~operating ~~effect~~costs onassociated ~~our~~with ~~business~~a ~~and~~newly ~~results~~opened ofrestaurant ~~operations.~~for Wethe first several ~~may~~months ~~also~~of beoperation ~~subject~~are tomaterially ~~litigation~~greater ~~which,~~than ~~regardless~~those ofexpected ~~the~~after ~~outcome~~that time, ~~could result~~both in ~~adverse~~aggregate dollars ~~publicity.~~and ~~Adverse~~as ~~publicity~~a ~~resulting~~percentage ~~from~~of ~~such~~revenues. ~~allegations may~~Accordingly, ~~materially~~the ~~adversely~~volume ~~affect~~and ~~our~~timing ~~business, regardless~~ of ~~whether~~new ~~such~~restaurant ~~allegations~~openings ~~are~~has ~~true~~had orin ~~whether~~the wepast ~~are~~and ~~ultimately~~may ~~held~~have ~~liable.~~in ~~Such litigation,~~the ~~adverse~~future ~~publicity~~a ormeaningful ~~damages~~impact ~~could~~on ~~have~~preopening ~~a material adverse effect~~expenses onand ~~our~~labor ~~business,~~and ~~competitive~~operating ~~position~~costs ~~and~~from ~~results~~period ofto ~~operations~~period.

9OUR BUSINESS IS IMPACTED BY THE INTENSE COMPETITION IN THE FULL SERVICE CASUAL DINING SECTOR AND IN THE RESTAURANT INDUSTRY GENERALLY.

~~Table~~ The restaurant industry, particularly the full-service casual dining segment, is highly competitive. We compete with a broad range of ~~Contents~~restaurants, including national and regional casual dining chains as well as locally-owned restaurants, some of which operate with concepts similar to ours. We believe that the competitive factors that are used by consumers to differentiate among restaurants include price, service, location, concept and food quality, including taste, freshness, and nutritional value. We believe that we compete effectively in our markets. However, many of our competitors possess substantially greater financial, marketing, personnel and other resources than we do and have greater brand name recognition than we do. We also compete with other restaurants and restaurant chains for sites for new restaurants and for employees.

WE We ~~COULD~~believe ~~FACE~~that ~~LABOR~~the ~~SHORTAGES~~full-service casual dining segment is likely to continue to attract a significant number of new entrants. In addition, ~~INCREASED~~the ~~LABOR~~full-service ~~COSTS~~restaurant industry is characterized by the frequent introduction of new food products, ~~AND~~which ~~OTHER~~are ~~ADVERSE~~accompanied ~~EFFECTS~~by OFsubstantial ~~VARYING~~promotional ~~LABOR~~campaigns. ~~CONDITIONS~~In recent years, numerous companies in the full-service casual restaurant industry have introduced products intended to capitalize on growing consumer preference for food products which are, or are perceived to be, healthful, nutritious, low in calories, low in carbohydrates and/or low in fat content. We believe that we will be subject to increasing competition from companies whose products or marketing strategies address these consumer preferences, and we may need to modify or refine elements of our business in order to effectively compete with popular new restaurant formats or concepts that develop from time to time. There can be no assurance that we will be successful in implementing any such modifications.

~~The~~WE ~~success~~ARE ofDEPENDENT ~~our~~UPON ~~restaurants~~SUPPLY ~~depends,~~AND inQUALITY ~~large~~OF ~~part,~~FOOD ~~on the efforts, abilities, experience and reputations of the general managers and chefs at each of our restaurants~~PRODUCTS. ~~Our inability to recruit and retain qualified individuals~~ may delay the opening of new restaurants or result in higher employee turnover in existing restaurants, which could materially and adversely affect our results of operations or business. Our success also depends, in part, upon our ability to attract, motivate and retain a sufficient number of qualified employees, including restaurant managers, kitchen staff and wait staff. Qualified individuals needed to fill these positions are in short supply. A significant delay in finding qualified employees or high turnover among existing employees could cause our business and results of operations to suffer. Also, competition for qualified employees could require us to pay higher wages to attract sufficient qualified employees. Further, a number of our employees are subject to various minimum wage requirements. The federal minimum wage has remained at $5.15 per hour since September 1, 1997. Any minimum wage increase may have a material adverse effect on our business, financial condition, results of operations or cash flows.

WE Our ~~MAY~~operations ~~NOT~~depend BEupon ~~ABLE~~frequent TOdeliveries ~~SUCCESSFULLY~~of ~~EXPAND~~quality INfood ~~THE~~products. ~~FUTURE~~We are routinely exposed to the risks that shortages or interruptions in supply can occur and adversely affect the availability, quality and cost of these critical food products. Regional weather conditions may also adversely affect product supply and quality. We have in the past experienced difficulty in obtaining adequate supplies of food products, or at a cost that allowed such products to be sold on a profitable basis. There can be no assurance that future food supply shortages or interruptions, especially with respect to steak products, might not have a material adverse effect on our sales, operations and profitability.

~~We opened only one company-owned restaurant in fiscal 2004 and no~~8 additional company-owned restaurants are currently expected to be opened in fiscal 2005. Our ability to expand our restaurant operations will depend, in large measure on our ability to generate sufficient income from operations, as well as having sufficient debt and/or equity financing available on acceptable terms, to fund the costs of developing additional company-owned restaurants. Further, even if we have the funding required to open new company-owned restaurants in the future, our ability to successfully open new restaurants will be affected by various factors, including the need to locate suitable restaurant sites, the negotiation of favorable lease arrangements for such sites, the management of the costs of development of the new restaurants, our ability to secure the approvals and permits necessary to open new restaurants and our ability to successfully retain quality restaurant management and restaurant personnel to staff the new restaurant. Finally, even if new restaurants are opened, there may be delays in the opening of such restaurants that could affect our expectations regarding the impact of such restaurants on our consolidated sales and operating results and there can be no assurance that any restaurants we open will operate profitably and be cash flow positive.

WeOUR ~~are~~BUSINESS ~~and~~COULD ~~will~~BE ~~continue~~AFFECTED toBY beLITIGATION ~~dependent~~AND onPUBLICITY ~~the~~CONCERNING ~~services~~FOOD ~~of our executive officers and key employees~~QUALITY, ~~including~~HEALTH ~~Ayman Sabi, our Chief Executive Officer.~~AND ~~The~~OTHER ~~loss~~ISSUES ofWHICH ~~Mr. Sabi’s~~CAN ~~services,~~CAUSE orGUESTS ~~the~~TO ~~loss~~AVOID ofOUR ~~the~~RESTAURANTS ~~services~~AND ofWHICH ~~our~~CAN ~~other executive~~RESULT ~~officers~~IN ~~or our key employees, could have a material adverse effect on our business, and there can be no assurance that an adequate replacement could be found if the services of Mr~~LIABILITIES. ~~Sabi, our other executive officers or our~~ ~~key employees were unavailable.~~

~~OUR~~ Health ~~FAILURE~~concerns, TOincluding ~~COMPLY~~adverse ~~WITH~~publicity ~~GOVERNMENTAL~~concerning ~~REGULATIONS~~food-related ~~COULD~~illness, ~~HARM~~whether ~~OUR~~or ~~BUSINESS~~not specifically ~~AND~~related to our restaurants, could cause guests to avoid certain restaurant groups ~~REPUTATION~~including ~~AND~~our ~~ADVERSELY~~restaurants, ~~AFFECT~~thereby ~~OUR~~having ~~OPERATIONS~~a negative impact on our sales. We may also be the subject of complaints or litigation from guests alleging food-related illness, injuries suffered on our premises or other food quality, health or operational concerns. A lawsuit or claim could result in an adverse decision against us that could have a material adverse effect on our business and results of operations. We may also be affected by adverse litigation and publicity regardless of the outcome. Any such litigation, adverse publicity or damages could have a material adverse effect on our business, competitive position and results of operations.

~~Our~~WE ~~business~~COULD isFACE ~~subject~~LABOR ~~to federal~~SHORTAGES, ~~state~~INCREASED ~~and~~LABOR ~~local regulations with respect to~~COSTS, ~~among~~AND ~~other~~OTHER ~~matters,~~ADVERSE ~~building,~~EFFECTS ~~fire,~~OF ~~health,~~VARYING ~~sanitation and safety.~~LABOR ~~Further, our development of future restaurants will be subject to laws, rules and regulations concerning land use, building, zoning and environmental matters~~CONDITIONS.

10 The success of our restaurants depends, in large part, on the efforts, abilities, experience and reputations of the general managers and chefs at each of our restaurants. Our inability to recruit and retain qualified individuals may delay the opening of new restaurants or result in higher employee turnover in existing restaurants, which could materially and adversely affect our results of operations or business. Our success also depends, in part, upon our ability to attract, motivate and retain a sufficient number of qualified employees, including restaurant managers, kitchen staff and wait staff. Qualified individuals needed to fill these positions are in short supply. A significant delay in finding qualified employees or high turnover among existing employees could cause our business and results of operations to suffer. Also, competition for qualified employees could require us to pay higher wages to attract sufficient qualified employees. Further, a number of our employees are subject to various minimum wage requirements. The federal minimum wage has remained at $5.15 per hour since September 1, 1997. However, Florida and New York (two of the markets in which we operate) have recently increased their minimum wage to $6.15 and $6.00, respectively. As such, since we generally cannot pass these increased costs to consumers, a minimum wage increase may adversely affect financial condition, results of operations or cash flows.

~~Table~~WE ofMAY ~~Contents~~NOT BE ABLE TO EXPAND OUR RESTAURANT CHAIN IN THE FUTURE WITHOUT THE AVAILABILITY OF SUBSTANTIAL ADDITIONAL CAPITAL.

~~Various~~ We ~~federal~~opened ~~and~~only ~~state~~one ~~labor~~Company-owned ~~laws~~restaurant ~~govern~~in ~~our~~fiscal ~~operations~~2004 and ~~our~~none in fiscal 2005. No ~~relationship~~additional ~~with~~Company-owned restaurants are currently expected to be opened in fiscal 2006. Our ability to expand our ~~employees,~~restaurant ~~including~~operations ~~minimum~~will ~~wage~~depend, ~~overtime~~in large measure, ~~safety~~on ~~and~~our ability to ~~working~~generate ~~conditions~~sufficient income from operations, ~~fringe~~as ~~benefit~~well ~~and~~as ~~citizenship~~having ~~requirements.~~sufficient Indebt and/or equity ~~particular,~~financing weavailable ~~are~~on ~~subject~~acceptable terms, to fund the ~~regulations~~costs of ~~the~~developing ~~Immigration~~additional ~~and~~Company-owned ~~Naturalization Service (INS)~~restaurants. ~~Given~~As of the ~~location~~date of ~~many~~this ofForm 10-K, such funding is not available. Further, our ability to successfully open new restaurants will be affected by various factors, including the ~~even~~need ifto welocate ~~operate~~suitable ~~those~~restaurant ~~restaurants~~sites, inthe ~~strict~~negotiation ~~compliance~~of ~~with~~favorable ~~INS~~lease arrangements for such ~~requirements~~sites, ~~our~~the ~~employees~~management ~~may~~of ~~not~~the ~~all~~costs ~~meet~~of ~~federal~~development ~~citizenship~~of orthe ~~residency requirements~~new restaurants, ~~which~~our ~~could~~ability ~~lead~~to secure the approvals and permits necessary to ~~disruptions~~open innew restaurants and our ~~work~~ability ~~force~~to successfully retain quality restaurant management and restaurant personnel to staff the new restaurant. ~~Further~~Finally, even ~~material~~if ~~increases~~new restaurants are opened, there may be delays in ~~unemployment~~the ~~tax~~opening ~~rates,~~of ~~minimum~~such ~~wage~~restaurants ~~requirements,~~that ~~sales~~could ~~taxes~~affect orour expectations regarding the ~~cost~~impact of ~~compliance~~such ~~with~~restaurants on our consolidated sales and operating results and there can be no assurance that any ~~applicable~~restaurants ~~law~~we oropen ~~regulation~~will ~~could~~operate ~~materially~~profitably and ~~adversely~~be ~~affect~~cash ~~our~~flow ~~business~~positive.

~~Sales of alcoholic beverages account for approximately 10% of our~~9 revenues. Since we sell alcoholic beverages, we are required to comply with the alcohol licensing requirements of the various government agencies, including states and municipalities where our restaurants are located. Alcoholic beverage control regulations require each Roadhouse Grill restaurant to apply to a state authority and, in certain locations, county and/or municipal authorities for a license or permit to sell alcoholic beverages on the premises and to provide service for extended hours. Typically, licenses must be renewed annually and may be revoked or suspended for cause at any time. If a liquor license for any restaurant were lost, revenues for that restaurant would be adversely affected. Alcoholic beverage control regulations relate to numerous aspects of our restaurants, including minimum age of patrons consuming and employees serving alcoholic beverages, hours of operation, advertising, wholesale purchasing, inventory control, and handling, storage and dispensing of alcoholic beverages. Our restaurant operations are also subject to “dram-shop” statutes, which generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person. Any liability under such statutes could have a material adverse effect on our results of operations and financial condition. While we carry liquor liability coverage as part of our existing comprehensive general liability insurance, there can be no assurance that our insurance coverages will be adequate.

~~Finally,~~WE inARE ~~connection~~DEPENDENT ~~with~~UPON ~~our~~OUR ~~franchise~~EXECUTIVE ~~operations,~~OFFICERS weAND ~~are~~KEY ~~required to comply with Federal Trade Commission and state laws and regulations that govern the offer, sale and termination of franchises and the refusal to renew franchises~~EMPLOYEES.

We ~~believe~~are ~~that~~and wewill ~~operate~~continue ~~our~~to ~~business~~be ~~within~~dependent on the ~~requirements~~services of ~~applicable~~ ~~federal,~~our ~~state~~executive officers and ~~local~~key employees. ~~laws~~The ~~and~~loss ~~regulations.~~of ~~However,~~the services of our ~~failure to~~executive ~~operate~~officers inor ~~accordance~~our ~~with~~key ~~any~~employees orcould ~~all~~have ofa material ~~such~~adverse ~~regulations,~~effect oron anour ~~allegation that~~business, weand ~~are~~there ~~operating~~can inbe ~~violation~~no ofassurance ~~such~~that ~~regulations,~~adequate ~~even~~replacements could be found if itour ~~turns~~current ~~out~~executive officers and key employees ~~not~~were tounavailable. beIn ~~true~~that regard, ~~could~~we ~~have~~recently aentered ~~material~~into ~~adverse~~certain agreements ~~impact~~with on our ~~business,~~executive ~~financial position~~officers orand ~~results~~certain of ~~operations~~our key employees. See Item 11. “Executive Compensation.”

WEOUR ~~ARE~~FAILURE ~~SELF-INSURED~~TO INCOMPLY ~~CERTAIN~~WITH OFGOVERNMENTAL ~~OUR~~REGULATIONS ~~INSURANCE~~COULD ~~COVERAGES~~HARM OUR BUSINESS AND ~~HAVE~~REPUTATION ~~EXPERIENCED~~AND ~~INCREASED~~ADVERSELY ~~INSURANCE~~AFFECT ~~COSTS~~OUR OPERATIONS.

We Our ~~maintain~~business ~~insurance~~is subject to ~~cover~~federal, ~~the~~state ~~potential~~and ~~liabilities~~local ~~associated~~regulations with ~~a number~~respect ofto, ~~the~~among ~~risks~~other matters, ~~that~~building, wefire, ~~may~~health, ~~encounter~~sanitation inand ~~our business operations~~safety. ~~These include property and flood coverage~~Further, ~~auto,~~our ~~workers’~~development ~~compensation,~~of ~~general~~future ~~liability~~restaurants ~~and~~will ~~umbrella,~~be ~~directors~~subject ~~and~~to ~~officers liability~~laws, ~~employers~~rules ~~practice liability~~ and ~~crime~~regulations ~~insurance.~~concerning ~~Many~~land ~~of the policies~~use, ~~such as property~~building, ~~flood~~zoning and ~~directors~~environmental ~~and officers liability, include~~matters.

11 Various federal and state labor laws govern our operations and our relationship with our employees, including minimum wage, overtime, safety and working conditions, fringe benefit and citizenship requirements. In particular, we are subject to the regulations of the Immigration and Naturalization Service (INS). Given the location of many of our restaurants, even if we operate those restaurants in strict compliance with INS requirements, our employees may not all meet federal citizenship or residency requirements, which could lead to disruptions in our work force. Further, material increases in unemployment tax rates, minimum wage requirements, sales taxes or the cost of compliance with any applicable law or regulation could materially and adversely affect our business.

~~Table~~ Sales of ~~Contents~~alcoholic beverages account for approximately 9% of our revenues. Since we sell alcoholic beverages, we are required to comply with the alcohol licensing requirements of the various government agencies, including states and municipalities where our restaurants are located. Alcoholic beverage control regulations require each Roadhouse Grill restaurant to apply to a state authority and, in certain locations, county and/or municipal authorities for a license or permit to sell alcoholic beverages on the premises and to provide service for extended hours. Typically, licenses must be renewed annually and may be revoked or suspended for cause at any time. If a liquor license for any restaurant were lost, revenues for that restaurant would be adversely affected. Alcoholic beverage control regulations relate to numerous aspects of our restaurants, including minimum age of patrons consuming and employees serving alcoholic beverages, hours of operation, advertising, wholesale purchasing, inventory control, and handling, storage and dispensing of alcoholic beverages. Our restaurant operations are also subject to “dram-shop” statutes, which generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person. Any liability under such statutes could have a material adverse effect on our results of operations and financial condition. While we carry liquor liability coverage as part of our existing comprehensive general liability insurance, there can be no assurance that our insurance coverage will be adequate.

~~deductibles~~ The ~~ranging~~federal ~~from~~Americans ~~$100,000~~with toDisabilities ~~$250,000~~Act ~~per~~prohibits ~~claim.~~discrimination ~~For~~on ~~many~~the ~~policy~~basis of ~~years,~~disability ~~under~~in ~~workers’~~public ~~compensation,~~accommodations ~~employers practice liability~~ and ~~general liability~~employment. ~~coverage,~~We we are ~~effectively~~required ~~self-insured up~~ to ~~varying self-insurance~~comply ~~retention~~with ~~limits~~the ~~set on an individual claim basis ranging up to~~Americans ~~$300,000~~with ~~per~~Disabilities ~~claim~~Act and onregulations anrelating ~~aggregate~~to ~~basis.~~accommodating Wethe ~~are~~needs ~~also~~of ~~self-insured~~the disabled in ~~regard~~connection towith the ~~medical~~construction ~~insurance~~of ~~benefits~~new ~~that~~facilities ~~we provide to our managers~~ and ~~certain~~ ~~other~~with ~~employees.~~significant ~~These~~renovations ~~employees~~of ~~who elect to receive medical~~existing ~~insurance~~facilities, ~~benefits~~which ~~are~~will ~~required~~over totime ~~contribute~~require aan ~~portion~~incremental ofcapital ~~the~~investment ~~cost~~by ~~of providing the insurance benefits~~us.

~~Due~~ Finally, toin ~~the~~connection ~~trends~~with ~~currently~~our ~~being~~franchise ~~experienced in the insurance industry~~operations, we ~~believe~~are ~~that~~required ~~insurance costs will continue~~ to ~~represent~~comply awith ~~significant~~Federal ~~expense~~Trade toCommission us and ~~may~~state ~~increase~~laws inand ~~the~~regulations ~~future.~~that Wegovern ~~continually~~the ~~evaluate our options relating to controlling these costs~~offer, ~~including~~sale ~~changes in insurance carriers~~ and ~~brokers,~~termination ~~modifications to certain~~ of ~~the provisions of our~~ ~~policies~~franchises ~~(including deductibles~~ and ~~self-insured retention limits) and changes in~~ the ~~portion~~refusal ofto ~~costs~~renew ~~incurred in providing coverage for our employees that are paid by the employees who participate in the particular insurance plan~~franchises.

~~OUR COMMON STOCK IS QUOTED ON THE PINK SHEETS, AND INVESTORS MAY FIND IT~~10 ~~DIFFICULT TO SELL OUR COMMON STOCK.~~

~~Because~~ We ~~our~~believe ~~shares~~that ~~are~~we ~~traded~~operate onour ~~the~~business ~~pink~~within ~~sheets~~the ~~and~~requirements ~~trade~~of ~~below~~applicable $1federal, ~~per~~state ~~share,~~and welocal ~~are~~laws ~~also~~and ~~subject to SEC rules concerning the trading of so-called “penny stocks~~regulations.” ~~Under these rules~~However, ~~broker-dealers~~our ~~who~~failure ~~sell~~to ~~securities~~operate ~~governed by~~in ~~the~~accordance ~~rule~~with toany ~~persons~~or ~~who~~all ~~are~~of such ~~not~~regulations, ~~established~~or ~~customers~~an orallegation ~~accredited investors~~that ~~must~~we ~~make~~are aoperating ~~special~~in ~~suitability~~violation ~~determination~~of ~~and~~such ~~must~~regulations, ~~receive~~even ~~the~~if ~~purchaser’s~~it ~~written~~turns ~~consent~~out not to ~~the~~be ~~transaction~~true, ~~prior~~could tohave ~~the~~a ~~sale.~~material ~~These~~adverse ~~rules may~~impact ~~deter~~on ~~broker-dealers~~our ~~from~~business, ~~recommending~~financial position or ~~trading~~results ~~our~~of ~~stock~~operations.

~~APPROXIMATELY~~WE ~~66.5%~~ARE OFSELF-INSURED ~~OUR~~IN ~~OUTSTANDING~~CERTAIN ~~COMMON~~OF ~~STOCK~~OUR ISINSURANCE ~~HELD BY ONE SHAREHOLDER, WHICH WILL LIMIT OTHER SHAREHOLDERS’ ABILITY TO INFLUENCE CORPORATE MATTERS~~COVERAGES.

At We ~~April 25,~~maintain ~~2004,~~insurance ~~Berjaya~~to ~~Group~~cover ~~(Cayman)~~the ~~Limited,~~potential ~~the~~liabilities ~~ultimate~~associated ~~parent~~with a number of the risks ~~which~~that iswe ~~Berjaya~~may ~~Group~~encounter ~~Berhad,~~in aour ~~diversified~~business ~~holding~~operations. ~~company~~These ~~headquartered~~include ~~in Malaysia~~property and flood coverage, ~~beneficially~~auto, workers’ ~~owned~~compensation, ~~directly~~general orliability ~~indirectly~~and umbrella, ~~approximately~~directors ~~66.5%~~and ofofficers liability, employers ~~our~~practice ~~outstanding~~liability ~~common~~and ~~stock~~crime insurance. ~~See~~Many ~~Item 12.~~of ~~“Security~~the ~~Ownership~~policies, ofsuch ~~Certain Beneficial~~as ~~Owners~~property, flood and directors ~~Management~~ and ~~Related~~officers ~~Stockholder~~liability, ~~Matters.”~~include Asdeductibles ~~a result~~ranging from $100,000 ~~Berjaya~~to is$125,000 ~~able~~per claim. In relation to ~~control~~workers’ ~~major~~compensation, ~~decisions~~prior ofto ~~corporate~~calendar ~~policy~~2003, ~~elect~~we were effectively self-insured up ~~our~~to ~~entire~~varying ~~board~~self-insurance ofretention ~~directors~~limits ~~and~~set ~~determine~~on ~~the~~an ~~outcome~~individual ofclaim ~~any~~basis ~~major~~ranging up to $300,000 ~~transaction~~per orclaim ~~other~~and ~~matters~~on ~~submitted~~an toaggregate ~~our~~basis. ~~shareholders~~Since calendar 2003, ~~including~~we ~~potential~~have had fixed cost coverage for ~~mergers~~workers’ orcompensation. ~~acquisitions,~~For employer’s practice liability and ~~amendments~~general liability coverage, we are effectively self-insured up to ~~our~~varying ~~articles~~self-insurance ofretention ~~incorporation. Shareholders~~limits ~~other~~set ~~than~~on ~~Berjaya~~an ~~are~~individual ~~therefore~~claim basis ~~likely~~ranging up to ~~have~~$150,000 ~~little~~per orclaim ~~no influence~~and on ~~decisions~~an ~~regarding~~aggregate ~~such matters~~basis. ~~Third~~We ~~parties~~are ~~may~~also beessentially ~~discouraged~~self-insured ~~from~~in ~~making~~regard ato ~~tender~~the ~~offer~~medical orinsurance ~~bid~~benefits that we provide to ~~acquire~~our usmanagers ~~because~~and certain ofother ~~this~~employees. These employees who elect to receive medical insurance benefits are ~~concentration~~required to contribute a portion of ~~ownership~~the cost of providing the insurance benefits.

12 Due to the trends currently being experienced in the insurance industry, we believe that insurance costs will continue to represent a significant expense to us and may increase in the future. We continually evaluate our options relating to controlling these costs, including changes in insurance carriers and brokers, modifications to certain of the provisions of our policies (including deductibles and self-insured retention limits) and changes in the portion of costs incurred in providing coverage for our employees that are paid by the employees who participate in the particular insurance plan.

~~Table~~OUR ofCOMMON ~~Contents~~STOCK IS QUOTED ON THE PINK SHEETS, AND INVESTORS MAY FIND IT DIFFICULT TO SELL OUR COMMON STOCK.

~~COMPANY~~ Our common stock is currently quoted on the “pink sheets.” The fact that our common stock is not listed on the NASDAQ stock market or on a stock exchange is likely making trading our shares difficult for broker-~~OWNED~~dealers, ~~RESTAURANT~~shareholders ~~OPERATIONS~~and investors. It may also make it more difficult for us to raise additional equity capital in the future. While we hope to relist our common stock on a nationally recognized market in the future, there can be no assurance that our common stock will qualify for trading or quotation on a nationally recognized market in the future.

~~MENU~~ Because our shares are traded on the pink sheets and trade below $1 per share, we are also subject to SEC rules concerning the trading of so-called “penny stocks.” Under these rules, broker-dealers who sell securities governed by the rule to persons who are not established customers or accredited investors must make a special suitability determination and must receive the purchaser’s written consent to the transaction prior to the sale. These rules may deter broker-dealers from recommending or trading our stock.

~~The~~APPROXIMATELY ~~Roadhouse Grill menu, which was revised and expanded in June 2003, features aged USDA Choice steaks and prime rib, beef ribs, chicken and seafood, all of which are grilled to order~~66.5% ~~Our~~OF ~~steaks~~OUR ~~are~~OUTSTANDING ~~aged~~COMMON ~~both~~STOCK ~~before~~IS ~~and~~HELD ~~after being~~BY ~~cut~~ONE ~~and trimmed. The menu features over sixty items~~SHAREHOLDER, ~~including~~WHICH 11WILL ~~cuts~~LIMIT ofOTHER ~~steak~~SHAREHOLDERS’ ~~ranging~~ABILITY ~~from~~TO 6INFLUENCE ~~oz.~~CORPORATE ~~to 18 oz~~MATTERS. ~~We are known for our “Roadie,” a bourbon~~ marinated sirloin, our prime rib and award-winning baby-back ribs. In addition to grilled selections, our menu offers a variety of specialty drinks, a pasta dish, several seafood dishes, a wide variety of appetizers, sandwiches, and salads, including signature items such as our Roadhouse cheese wraps, and a variety of desserts, most notably the “messy sundae.” Each entree is served with a choice of a house salad or Caesar salad, a choice of baked sweet potato, baked potato, home fries, french fries or rice pilaf, homemade yeast rolls and peanuts.

~~Roadhouse~~ At ~~Grill restaurants are open seven days a week for lunch and dinner and offer full bar service. Entrée prices range from $6.99 to $19.49. From 11:00~~April ~~a.m.~~24, ~~to 3:00 p.m. Monday through Friday~~2005, inBerjaya ~~addition~~Group to(Cayman) ~~our full menu~~Limited, ~~each~~the ~~Roadhouse~~ultimate ~~Grill~~parent ~~offers a selection~~ of 15which ~~lunch~~is ~~menu items ranging~~Berjaya ~~from~~Group ~~charbroiled~~Berhad, ~~steak~~a ~~salad~~diversified toholding ~~southern~~company ~~fried~~headquartered ~~chicken~~in ~~tenders~~Malaysia, ~~and~~beneficially ~~french fries~~owned, asdirectly or ~~well as daily specials~~indirectly, ~~all~~approximately ~~prepared~~66.5% toof ~~order~~our ~~quickly~~outstanding ~~and~~common ~~priced at $7~~stock.99 orSee ~~less~~Item 12. “Security Ownership of

~~UNIT ECONOMICS~~11

~~Our~~Certain ~~average~~Beneficial ~~cash~~Owners ~~investment~~and ~~for~~Management ~~these~~and 68Related ~~restaurants~~Stockholder ~~was approximately $1~~Matters.~~6 million,~~” ~~including~~As ~~building~~a ~~structures~~result, Berjaya ~~(where~~is ~~applicable),~~able ~~building~~to ~~or leasehold~~control ~~improvements~~major ~~and~~decisions ~~equipment~~of ~~and~~corporate ~~fixtures~~policy, ~~but~~elect ~~excluding~~our ~~land~~entire ~~and~~board of directors ~~pre-opening~~and ~~costs.~~determine ~~Restaurant-level~~the ~~economics~~outcome ~~are~~of ~~affected~~any tomajor ~~the~~transaction ~~extent~~or ~~that we~~other ~~construct~~matters ~~free-standing~~submitted ~~units~~to onour ~~company-owned~~shareholders, including orpotential ~~leased~~mergers ~~land~~or acquisitions, ~~rather~~and ~~than leasing~~amendments ~~existing~~to ~~buildings.~~our Inarticles ~~such~~of ~~cases,~~incorporation. Shareholders ~~initial~~other ~~development~~than ~~costs~~Berjaya are ~~substantially~~ ~~greater~~therefore ~~and~~likely ~~occupancy~~to ~~costs~~have ~~(other~~little ~~than~~or ~~depreciation)~~no ~~are~~influence on decisions ~~substantially~~regarding ~~less~~such ~~than~~matters ~~when~~and wepotential ~~lease~~transactions ~~existing~~might ~~buildings.~~not Weoccur ~~cannot~~because ~~predict~~Berjaya ifopposes them, ~~average~~even ~~unit-level~~if ~~economics~~our ~~would~~Board beor ~~altered~~our ~~significantly~~other ifstockholders inbelieve ~~the~~them ~~future the~~to ~~mix~~be ofbeneficial. ~~restaurants~~Third ~~placed~~parties inmay ~~leased~~also be ~~buildings~~discouraged ~~compared~~from tomaking ~~free-standing buildings~~a ontender ~~company-owned~~offer or ~~leased~~bid ~~land~~to ~~were~~acquire tous ~~change~~because ~~materially~~of ~~from~~this ~~our current~~concentration ~~mix~~of ownership.

13COMPANY-OWNED RESTAURANT OPERATIONS

~~Table of Contents~~MENU

~~RESTAURANT~~ The ~~LOCATIONS~~Roadhouse Grill menu, which was revised in March 2005, features aged USDA Choice steaks and prime rib, beef ribs, chicken and seafood, all of which are grilled to order. Our steaks are aged both before and after being cut and trimmed. The menu features over sixty items, including 10 cuts of steak ranging from 6 oz. to 20 oz. We are known for our “Roadie,” a bourbon marinated sirloin, our prime rib and award-winning baby-back ribs. In addition to grilled selections, our menu offers a variety of specialty drinks, a pasta dish, several seafood dishes, a wide variety of appetizers, sandwiches, and salads, and a variety of desserts, most notably the “messy sundae.” Most entrees are served with a choice of a house salad or Caesar salad, a choice of baked sweet potato, baked potato, french fries or rice pilaf, homemade yeast rolls and peanuts.

~~The~~ Roadhouse ~~following~~Grill ~~table~~restaurants ~~sets~~are ~~forth~~open ~~the~~seven ~~location~~days ofa week for lunch and dinner and offer full bar service. Entrée prices range from $10.49 to $23.99. From 11:00 a.m. to 3:00 p.m. Monday through Friday, in addition to our full menu, each Roadhouse Grill offers a selection of ~~our~~16 ~~company-owned~~lunch menu ~~restaurants~~items ~~open~~ranging from a cajun prime rib sandwich to southern fried chicken tenderloins with home style tater chips, as ofwell ~~April 25~~as daily specials, ~~2004:~~all prepared to order quickly and priced at $8.79 or less.

	Number of
Location	Restaurants
Florida		34
Georgia		9
New York		6
Louisiana		2
South Carolina		2
Alabama		2
Mississippi		3
Ohio		8
Arkansas		1
North Carolina		2
Total		69

RESTAURANT LOCATIONS

~~RESTAURANT~~ The ~~OPERATIONS~~following ~~AND~~table ~~MANAGEMENT~~sets forth the location of each of our Company-owned restaurants open as of April 24, 2005:

Restaurant Personnel. We believe that excellent service contributes significantly to a distinctive, enjoyable dining experience. Accordingly, we seek to hire individuals who possess strong initiative and the ability to provide quality and personalized service. Roadhouse Grill attempts to foster the individuality of its employees, encouraging them to interact with customers on a friendly, casual basis. We recruit both experienced restaurant managers from outside the company and promote qualified employees from within the company. We seek to retain high-quality restaurant managers and personnel by providing them with opportunities for promotion and financial incentives based on individual restaurant performance. These financial incentives include a bonus plan that enables each restaurant manager to earn a portion of a bonus pool by achieving certain predetermined performance goals. To further enhance the “team” concept, restaurant managers also have an opportunity for financial incentives based on our consolidated company-wide financial results.


	Number of
Location	Restaurants
Florida		33
Georgia		9
Ohio		8
New York		6
Mississippi		3
Louisiana		2
South Carolina		2
Alabama		2
North Carolina		2
Arkansas		1


Total		68

~~Roadhouse~~ One ~~Grill~~restaurant ~~restaurants~~in ~~generally~~Ohio ~~operate~~was ~~with~~closed ain ~~general~~July 2005 ~~manager, a dining room manager, a kitchen manager and one or two assistant managers, depending~~ upon ~~volume.~~termination ~~The general manager~~ of ~~each restaurant has primary responsibility for managing~~ the ~~day-to-day~~related ~~operations of the restaurant in accordance with our company-wide standards~~lease. ~~The general manager and kitchen~~ ~~manager of each restaurant generally are responsible for interviewing, hiring and training restaurant staff. Each restaurant has a staff of approximately 60 to 70 employees.~~

~~We devote a significant amount of time and resources to restaurant~~12 management and staff training. Each new manager participates in an eight-week training program, which is conducted both at designated training restaurants and our corporate office, before assuming an assistant manager position (or, in some instances, a kitchen manager position) at a Roadhouse Grill restaurant. This program is designed to provide training in all areas of restaurant operations, including food preparation and service, alcoholic beverage

~~Table~~RESTAURANT ofOPERATIONS ~~Contents~~AND MANAGEMENT

Restaurant Personnel. We believe that excellent service, ~~company~~contributes ~~philosophy,~~significantly ~~operating~~to ~~standards~~a distinctive, ~~policies~~enjoyable ~~and~~dining ~~procedures~~experience. Accordingly, we seek to hire individuals who possess strong initiative and ~~business~~the ~~management~~ability to provide quality and ~~administration~~personalized ~~techniques~~service. ~~These~~Roadhouse ~~new~~Grill attempts ~~managers~~to ~~are also~~foster ~~trained~~the ~~and~~individuality ~~evaluated~~of inits ~~regards~~employees, encouraging them to ~~behavioral~~interact ~~skills~~with ~~and~~customers on ~~other~~a ~~topics~~friendly, tocasual basis. We recruit both experienced restaurant managers from outside the ~~ensure~~Company ~~they~~and ~~possess~~promote qualified employees from within the ~~ability~~Company. We seek to ~~succeed~~retain inhigh-quality restaurant ~~managing~~managers ~~one~~and ofpersonnel ~~our~~by ~~restaurants~~providing them with opportunities for promotion and financial incentives based on individual restaurant performance. These financial incentives include a bonus ~~The~~plan ~~managers~~that enables each restaurant manager and hourly employee to earn a portion of a bonus pool by achieving certain predetermined performance goals. To further enhance the ~~training~~“team” concept, restaurant ~~conduct~~managers ~~weekly~~also ~~evaluations~~have ofan ~~each~~opportunity for financial incentives based on our consolidated ~~manager~~Company-wide ~~trainee~~financial results.

In Roadhouse ~~connection~~Grill ~~with~~restaurants ~~the~~generally ~~opening~~operate ofwith a ~~new~~general ~~restaurant~~manager, wea ~~send~~dining anroom ~~experienced~~manager, a ~~training~~kitchen ~~team~~manager toand ~~train~~one ~~and~~or ~~assist~~two ~~the~~assistant ~~new~~managers, ~~restaurant~~depending ~~employees~~upon volume. The ~~training team~~general ~~generally~~manager ~~arrives at~~ of each restaurant ~~two~~has ~~weeks~~primary ~~prior~~responsibility for managing the day-to-day ~~opening~~operations ~~and~~of the restaurant ~~remains~~in ~~for~~accordance ~~four~~with ~~weeks~~our ~~after~~Company-wide ~~opening~~standards. ~~Typically,~~The ~~the~~ general manager, ~~the dining room manager~~ and ~~the~~ kitchen manager of each restaurant ~~new~~generally are responsible for interviewing, hiring and training restaurant ~~are~~staff. Each ~~individuals~~restaurant ~~who~~has ~~have~~a ~~been~~staff ~~managers~~of atapproximately an60 ~~existing~~to ~~Roadhouse~~70 ~~Grill restaurant~~employees.

~~The~~ We ~~development~~devote ~~and~~a ~~success~~significant amount of ~~our~~time ~~restaurants~~and ~~depends,~~resources to restaurant management and staff training. Each new manager participates in ~~part~~a six-week training program, onwhich ~~the~~is conducted both at ~~efforts,~~designated ~~abilities,~~training ~~experience~~restaurants and ~~reputations~~our ofcorporate ~~the~~office, ~~general~~before ~~managers~~assuming ~~and~~an assistant manager ~~chefs~~position (or, in some instances, a kitchen manager position) at ~~our~~a ~~restaurants~~Roadhouse Grill restaurant. ~~Our~~This program ~~inability~~is designed to ~~recruit~~provide ~~and~~training ~~retain~~in ~~high-quality personnel~~all ~~may~~areas ~~delay~~of ~~the~~restaurant ~~opening~~operations, ofincluding ~~new~~food preparation ~~restaurants~~and orservice, ~~result~~alcoholic inbeverage ~~higher~~service, ~~employee turnover~~company inphilosophy, ~~existing~~operating ~~restaurants~~standards, policies ~~which~~and ~~could~~procedures, ~~materially~~and business management and ~~adversely~~administration ~~affect~~techniques. These new managers ~~our~~are ~~results~~also oftrained ~~operations~~and orevaluated ~~business.~~in ~~Competition~~regards ~~for~~to ~~qualified~~behavioral ~~employees could~~skills ~~require~~and usother topics to ~~pay~~ensure ~~higher~~they possess ~~wages~~the ability to ~~attract~~succeed ~~sufficient~~in ~~qualified~~managing ~~employees~~one of our restaurants. The managers of the training restaurant conduct weekly evaluations of each manager trainee.

Additionally, our restaurant operations are overseen by our Vice President of Operations and by our ~~nine~~eleven directors of operations, each of whom is responsible for supervising the operations of ~~six~~four to ten restaurants.

~~Purchasing.~~ In Toconnection ~~better~~with ~~insure~~the ~~uniform~~opening ~~quality~~of ~~and~~a ~~obtain~~new ~~competitive prices~~restaurant, we ~~contract~~send ~~centrally~~an ~~for~~experienced ~~most~~training ~~restaurant~~team ~~food~~to train ~~products~~ and ~~other supplies.~~assist ~~Individual restaurants decide~~ the ~~amount~~new ofrestaurant ~~each~~employees. ~~item~~The ~~they~~training ~~require and~~team ~~place~~generally ~~orders~~arrives ~~directly~~at ~~with our distributors several times a week. Managers~~each ~~also~~restaurant ~~arrange~~two ~~for~~weeks ~~produce~~prior ~~items~~ to beopening ~~provided by local vendors that meet our quality standards. Corporate management closely monitors prices~~ and ~~other supply~~remains ~~contract terms~~ for ~~locally~~four ~~and~~weeks ~~centrally~~after ~~contracted items~~opening. ~~Because~~Typically, of the general ~~volume~~manager, ofthe ~~our~~dining ~~aggregate~~room ~~orders~~manager and the ~~volume~~kitchen manager of ~~supplies~~each ~~delivered~~new torestaurant ~~each~~are ~~individual~~individuals ~~restaurant,~~who wehave ~~believe~~been ~~that~~managers weat ~~are~~an ~~able~~existing toRoadhouse ~~obtain~~Grill ~~favorable prices for our supplies~~restaurant.

~~Our~~ Purchasing. ~~profitability~~To isbetter ~~dependent~~insure inuniform ~~part~~quality onand ~~our~~obtain ~~ability~~competitive toprices, ~~anticipate~~we ~~and~~contract ~~react~~centrally tofor ~~changes~~most inrestaurant food products and ~~supply~~other ~~costs~~supplies. ~~Various~~Individual ~~factors~~restaurants ~~beyond~~decide ~~our control,~~the ~~including~~amount ~~climatic~~of ~~changes,~~each ~~disease~~item orthey ~~illness~~require inand ~~beef~~place ~~cattle~~orders ~~that~~directly ~~could~~with ~~impact supply~~our indistributors ~~the~~several ~~marketplace~~times ~~and~~a week. ~~government~~Managers ~~regulations,~~also ~~may~~arrange ~~affect~~for ~~food~~produce ~~costs. Specifically,~~items ~~our~~to ~~dependence~~be onprovided ~~frequent,~~by ~~timely~~local ~~deliveries~~vendors ofthat ~~beef,~~meet ~~poultry,~~our ~~seafood~~quality ~~and~~standards. ~~produce~~Corporate ~~subjects~~management usclosely tomonitors ~~the~~prices ~~risks~~and ofother ~~possible~~supply ~~shortages~~contract orterms ~~interruptions~~for inlocally ~~supply~~and ~~caused~~centrally bycontracted ~~adverse~~items. ~~weather~~Because orof ~~other~~the ~~conditions~~volume ~~which could~~of ~~adversely~~our ~~affect~~aggregate ~~the~~orders ~~availability~~ and ~~cost~~the volume of ~~any~~supplies ~~such~~delivered ~~items.~~to ~~Our failure~~each orindividual ~~inability~~restaurant, towe ~~deal~~believe ~~with~~that ~~these~~we ~~increases~~are orable ~~shortages~~to ~~could materially~~obtain ~~and~~favorable ~~adversely~~prices ~~affect~~for our ~~business and result of operations~~supplies.

In During ~~addition, during~~ fiscal ~~2004~~2005, we purchased approximately 8182% of our food and other restaurant supplies from two distributors. Our dependence on a small number of suppliers subjects us to the risk of possible ~~shortages or~~ interruptions in supply if one of these distributors is not able to provide food and supplies to our restaurants in a timely manner. However, we believe that the benefits of working with a small number of high-quality, financially stable vendors and realizing the benefits of primarily centralized distribution offsets the risks associated with this supplier dependence.

~~Hours of Operation. Roadhouse Grill restaurants are open seven days a~~13 ~~week, typically from 11:00 a.m. to 10:00 p.m. Sunday through Thursday and from 11:00 a.m. to 11:00 p.m. on Friday and Saturday.~~

~~Table~~shortages or interruptions in supply if one of ~~Contents~~these distributors is not able to provide food and supplies to our restaurants in a timely manner. However, we believe that the benefits of working with a small number of high-quality, financially stable vendors and realizing the benefits of primarily centralized distribution offsets the risks associated with this supplier dependence.

~~Reporting~~ Hours ~~and Financial Controls. We maintain reporting, financial and accounting controls for each~~ of ~~our restaurants through the use of centralized accounting and management information systems~~Operation. WeRoadhouse ~~have~~Grill also developed and continue to enhance corporate policies and procedures designed to maintain consistency in our operations and to strengthen internal accounting controls. Through the review of periodic financial information, on-site visits to our restaurants ~~and~~are ~~other~~open ~~means,~~seven wedays ~~continually~~a ~~evaluate compliance with our policies and procedures. In addition~~week, ~~each~~typically ~~of our restaurants is equipped with~~from 11:00 a.m. ~~computerized accounting system that allows restaurant management~~ to ~~efficiently~~ manage labor, food cost and other direct operating expenses, that provide corporate management rapid access to financial data and that reduces time devoted by our restaurant managers to administrative responsibilities10:00 p. ~~Guest~~m. ~~counts,~~Sunday ~~sales,~~through ~~cash~~Thursday ~~deposits~~ and ~~labor cost information are collected daily~~ from ~~each restaurant~~11:00 a. ~~Physical inventories of all food and beverage items are performed weekly~~m. ~~Each~~to ~~restaurant manager prepares a restaurant level weekly profit and loss statement, and at the end of each accounting period, operating statements are prepared for each location~~11:00 p.m. ~~The~~on ~~weekly~~Friday and accounting period operating statements are reviewed at both the corporate level and restaurant level for variances from expected results to allow for any corrective actions to be taken as quickly as possibleSaturday.

~~ADVERTISING~~ Reporting ~~AND~~and ~~MARKETING~~Financial Controls. We maintain reporting, financial and accounting controls for each of our restaurants through the use of centralized accounting and management information systems. We have also developed and continue to enhance corporate policies and procedures designed to maintain consistency in our operations and to strengthen internal accounting controls. Through the review of periodic financial information, on-site visits to our restaurants and other means, we continually evaluate compliance with our policies and procedures. In addition, each of our restaurants is equipped with a computerized accounting system that allows restaurant management to efficiently manage labor, food cost and other direct operating expenses, that provide corporate management rapid access to financial data and that reduces time devoted by our restaurant managers to administrative responsibilities. Guest counts, sales, cash deposits and labor cost information are collected daily from each restaurant. Physical inventories of all food and beverage items are performed weekly. Each restaurant manager prepares a restaurant level weekly profit and loss statement, and at the end of each accounting period, operating statements are prepared for each location. The weekly and accounting period operating statements are reviewed at both the corporate level and restaurant level for variances from expected results to allow for any corrective actions to be taken as quickly as possible.

~~Our~~ADVERTISING ~~motto~~AND ~~is: “Roadhouse Grill...Eat, Drink and be Yourself.” We attempt~~MARKETING to build brand-awareness by providing a distinctive dining experience that results in a significant number of new customers being attracted through word of mouth, as well as by traditional marketing efforts and promotional activities. We believe that clustering multiple restaurants in target markets helps build brand-awareness and increases the efficiencies in our marketing efforts. We also utilize radio, billboard and print advertising to promote our restaurants and build brand-awareness. In addition, beginning in fiscal 2004, we used a program with a rewards and loyalty company to market our restaurants. Further, we market at the restaurant level through sponsorship of community charity activities, sporting events, festivals and Chamber of Commerce events. For fiscal years 2004, 2003 and 2002, advertising and marketing expense relating to Roadhouse Grill restaurants amounted to approximately 2.4%, 2.4% and 1.7% of total revenues, respectively. Excluding the expense related to our program with the rewards and loyalty company, advertising and marketing expense amounted to 1.5% of total revenues in fiscal 2004.

~~Over~~ Our ~~the~~motto ~~last~~is: ~~few~~“Roadhouse ~~years~~Grill...Eat, ~~because~~Drink and be Yourself.” We attempt to build brand-awareness by providing a distinctive dining experience that results in a significant number of new customers being attracted through word of mouth, as well as by traditional marketing efforts and promotional activities. We believe that clustering multiple restaurants in target markets helps build brand-awareness and increases the efficiencies in our ~~financial~~marketing ~~condition~~efforts. We also utilize radio, billboard and print advertising to promote our restaurants and build brand-awareness. In addition, beginning in fiscal 2004, we ~~have~~used ~~not~~a program with a rewards and ~~been~~loyalty ~~able~~company to ~~invest~~market inour ~~marketing~~restaurants. ~~initiatives~~Further, we market at the ~~same~~restaurant level asthrough local ~~many~~store marketing efforts including sponsorship of ~~our competitors.~~community ~~However~~charity activities, ~~during~~sporting events, and festivals. For fiscal years 2005, we2004, ~~expect~~and 2003, advertising and marketing expense relating to ~~use~~Roadhouse ~~some~~Grill restaurants amounted to approximately 2.2%, 2.4%, and 2.4% of total revenues, respectively. Excluding the ~~working capital~~expense ~~available~~related to usour ~~from~~program with the ~~sale/leaseback~~rewards ~~transaction~~and ~~described~~loyalty company, ~~above~~advertising and marketing expense amounted to 1.5% of total revenues in each of fiscal ~~under~~years ~~“Recent~~2005 ~~Events”~~and 2004. Over the last few years, because of our financial condition, we have not been able to invest in ~~additional~~ marketing initiatives at the same level as many of our competitors.

RESTAURANT INDUSTRY AND COMPETITION

The restaurant industry is highly competitive. We compete with a broad range of restaurants, including national and regional casual dining chains as well as locally-owned restaurants, some of which operate with concepts similar to ours. A number of our competitors have been in existence longer than us and have substantially greater financial, marketing and other resources and wider geographical diversity than we do. The entrance of new competitors into our market areas or the expansion of operations by existing competitors could have a material adverse effect on our future results of operations and financial condition. There is no assurance that we will be able to compete successfully in the markets in which we operate. In addition, we compete with other restaurant companies and retailers for sites, labor and, in many ~~cases,~~ customers. We believe that the key competitive factors in the restaurant industry are price, quality of food and service, location and concept. To the extent that one or more of our competitors becomes more

1614

cases, customers. We believe that the key competitive factors in the restaurant industry are price, quality of food and service, location and concept. To the extent that one or more of our competitors becomes more successful with respect to any of the key competitive factors, then our business could be materially adversely affected.

The restaurant industry has few non-economic barriers to entry and is affected by changes in consumer tastes as well as national, regional and local economic conditions, demographic trends, traffic patterns, and the type, number and location of competing restaurants. There are various other factors which generally affect competitors in the restaurant industry. Dependence on fresh meats and produce also subjects restaurant companies to the risk that shortages or interruptions of supply could adversely affect the availability, quality or cost of ingredients. In addition, factors such as inflation, increased food, labor and employee benefit costs and the availability of qualified management and hourly employees also may adversely affect us and our restaurant competitors. The significant investment in and long-term commitment that we make to each of our restaurant sites limits our ability to respond quickly or effectively to changes in local competitive conditions or other changes that could affect our operations. The success of our restaurant concept will also be dependent on the performance of franchisee-owned restaurants over which we have limited control.

SEASONALITY

Our operating results fluctuate seasonally because of our geographic concentration in Florida, where we have 3433 of our 6967 ~~company~~Company-owned restaurants. Our restaurant sales generally increase from November through April, the peak period of the Florida tourism season, and generally decrease from May through October. In addition, because of our present geographic concentration, our results of operations have been and may continue to be materially adversely affected by a decline in tourism in Florida, downturns in Florida’s economy or by hurricanes or other adverse weather conditions in Florida. To offset this seasonal trend and to attempt to reduce the decline in sales during the off-season, we run special promotions for our customers, incentive contests for our employees and otherwise focus marketing initiatives on increasing sales during these off-season periods.

GOVERNMENT REGULATION

Our business is subject to federal, state and local regulations with respect to, among other matters, building, fire, health, sanitation and safety. Further, our development of future restaurants will be subject to laws, rules and regulations concerning land use, building, zoning and environmental matters.

Various federal and state labor laws govern our operations and our relationship with our employees, including minimum wage, overtime, safety and working conditions, fringe benefit and citizenship requirements. In particular, we are subject to the regulations of the Immigration and Naturalization Service (INS). Given the location of many of our restaurants, even if we operate those restaurants in strict compliance with INS requirements, our employees may not all meet federal citizenship or residency requirements, which could lead to disruptions in our work force. Further, material increases in unemployment tax rates, minimum wage requirements, sales taxes or the cost of compliance with any applicable law or regulation could materially and adversely affect our business.

Sales of alcoholic beverages account for approximately 109% of our revenues. Since we sell alcoholic beverages, we are required to comply with the alcohol licensing requirements of the various government agencies, including states and municipalities where our restaurants are located. ~~Alcoholic~~ Alcoholic beverage control regulations require each Roadhouse Grill restaurant to apply to a state authority and, in certain locations, county and/or municipal authorities for a license or permit to sell alcoholic beverages on the premises and to provide service for extended hours. Typically, licenses must be renewed annually and may be revoked or

1715

~~provide service for extended hours. Typically, licenses must be renewed annually and may be revoked or~~ suspended for cause at any time. If a liquor license for any restaurant were lost, revenues for that restaurant would be adversely affected. Alcoholic beverage control regulations relate to ~~numerous~~ numerous aspects of our restaurants, including minimum age of patrons consuming and ~~employees~~ employees serving alcoholic beverages, hours of operation, advertising, wholesale purchasing, inventory control, and handling, storage and dispensing of alcoholic beverages. Our restaurant operations are also subject to “dram-shop” statutes, which generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person. Any liability under such statutes could have a material adverse effect on our results of operations and financial condition. While we carry liquor liability coverage as part of our existing comprehensive general liability insurance, there can be no assurance that our insurance ~~coverages~~coverage will be adequate.

The federal Americans with Disabilities Act prohibits discrimination on the basis of disability in public accommodations and employment. We are required to comply with the Americans with Disabilities Act and regulations relating to accommodating the needs of the disabled in connection with the construction of new facilities and with significant renovations of existing facilities, which will over time require an additional incremental capital investment by us.

Our operations are subject to various local, state and federal laws regulating the discharge of pollutants into the environment. We believe that our operations are in material compliance with applicable environmental laws and regulations, and we conduct environmental audits of all proposed ~~restaurant~~ restaurant sites in order to determine whether there is any evidence of contamination prior to purchasing or entering into a lease with respect to such sites. However, there can be no assurance that we will not incur material environmental liability in connection with any of our owned or ~~leased~~ leased properties.

Finally, in connection with our franchise operations, we are required to comply with Federal Trade Commission and state laws and regulations that govern the offer, sale and termination of franchises and the refusal to renew franchises.

We believe that we operate our business within the requirements of applicable federal, state and local laws and regulations. However, our failure to operate in accordance with any or all of such regulations, or an allegation that we are operating in violation of such regulations, even if it turns out not to be true, could have a material adverse impact on our business, financial position or results of operations.

INSURANCE

We maintain insurance to cover the potential liabilities associated with a number of the risks that we encounter in our business operations. These include property and flood coverage, auto, workers’ compensation, general liability and umbrella, directors and officers liability, employers ~~practice~~ practice liability and crime insurance. Many of the policies, such as property, flood ~~and~~ and directors and officers liability include deductibles ranging from $100,000 to $~~250~~125,000 per claim. In ~~For~~relation ~~many~~to ~~policy~~workers’ ~~years~~compensation, ~~under~~prior to calendar 2003, we were effectively self-insured up to varying self-insurance retention limits set on an individual claim basis ranging up to $300,000 per claim and on an aggregate basis. Since calendar 2003, we have had fixed cost coverage for workers’ compensation, . For employers’ practice liability and general liability coverage, we are ~~effectively~~ effectively self-insured up to varying self-insurance retention limits set on an individual ~~claim~~ claim basis ranging up to $~~300~~150,000 per claim and on an aggregate basis. We are also essentially self-insured in regards to the medical insurance benefits that we provide to our managers and certain other employees. These employees who elect to receive medical insurance benefits are required to contribute a portion of the cost of providing the insurance benefits. Total insurance ~~costs~~ costs incurred by us for fiscal ~~2004~~2005, ~~2003~~2004 and ~~2002~~2003 were $53.04 million, $65.30 million and $36.5 3 million, respectively.

1816

Due to the trends currently being experienced in the insurance industry, we believe that insurance costs will continue to represent a significant expense to us and may increase in the future. Management is continuing to evaluate options relating to controlling these costs including changes in our insurance carriers and brokers, modifications to certain of the provisions of ~~our~~ our policies including deductibles and self-insured retention limits and changes in the portion of costs incurred in providing coverage for our employees that are allocated to the employees who participate in the plan.

EMPLOYEES

At April 2524, ~~2004~~2005, we employed 4,~~545~~232 persons, of whom 43,~~240~~908 were restaurant employees, ~~263~~ 270 were restaurant management and supervisory personnel, and 4254 were corporate personnel. Restaurant employees include both full-time and part-time workers and substantially all are paid on an hourly basis. None of our employees are covered by collective bargaining agreements, and we have ~~never~~ never experienced an organized work stoppage, strike or labor dispute. We believe that our relationship with our employees is satisfactory.

TRADEMARKS AND SERVICE MARKS

Roadhouse Grill has registered the “Roadhouse Grill” service mark and other designs and slogans with the U.S. Patent and Trademark Office and with the respective trademark offices in other countries. Roadhouse Grill has certain other foreign trademarks in various stages of the registration process; however, due to our financial condition, until recently we had temporarily ceased the registration process in several countries. However, we expect to resume such process on a case-by-case basis in certain countries in the future.

We believe that our trademarks and service marks have significant value and are essential to our ability to create demand for and awareness of our restaurants. There can be no assurance, however, that our marks would be upheld if challenged or that we would not be prevented from using our marks. We also rely on trade secrets and proprietary know-how, and we employ various ~~methods~~ methods to protect our concepts and recipes. However, these methods may not completely protect us.

EXPANSION PLANS FOR COMPANY OWNED RESTAURANTS

Expansion Strategy. Due to capital constraints, we have determined that it is not feasible at this time for us to significantly expand the Roadhouse Grill concept through the opening of a significant number of additional ~~company~~Company-owned restaurants. We opened one ~~company~~Company-owned restaurant in fiscal 2004 (in June 2003). However, no ~~other~~ new ~~company~~Company-owned ~~restaurant~~restaurants were opened in fiscal 2005 and no openings are currently planned for fiscal ~~2005~~2006. Subject to the operating results of our existing restaurants, the availability of adequate financing and the identification of ~~suitable~~ suitable locations, we will make a determination as to the number of restaurants to open in future years. Our focus during fiscal ~~2005~~2006 will be on managing our existing restaurants in the United States, ~~expanding the number of franchised locations~~ and returning our business to profitability. ~~Management~~ believes that opportunities exist that would enable us to expand our franchised operations in that regard. Management also believes that this type of growth opportunity will require significantly lower capital resources than building the Roadhouse Grill concept through opening significant numbers of additional company-owned stores.

Factors affecting development of ~~company~~Company-owned restaurants. If and when we decide to open additional ~~company~~Company-owned restaurants, our ability to successfully open such new restaurants will depend on a number of factors, many of which may be beyond our control, including our having financing available to open such restaurants and our ability to locate suitable restaurant sites; negotiate acceptable lease or purchase terms; obtain required governmental approvals and construct the new restaurants in a timely manner; attract, train and retain qualified and experienced personnel and management. Due to these factors and others discussed in this Form 10-K, there can be no assurance that we will be able to develop or operate additional restaurants.

1917

a We ~~number~~believe ofthat ~~factors,~~the ~~many~~site ofselection ~~which~~process ~~may~~is becritical ~~beyond~~to ~~our~~the ~~control,~~long-term ~~including~~success of any ~~our~~restaurant, ~~having~~and, ~~financing~~accordingly, ~~available~~when towe open ~~such~~a ~~restaurants~~Company-owned ~~and~~restaurant ~~our~~we ~~ability~~devote tosignificant time ~~locate~~and ~~suitable~~effort ~~restaurant~~to ~~sites;~~the ~~negotiate~~investigation ~~acceptable~~and ~~lease~~evaluation orof ~~purchase~~potential ~~terms;~~locations. Among the factors ~~obtain~~considered ~~required~~in ~~governmental~~the ~~approvals~~site ~~and~~selection ~~construct~~process ~~the~~are ~~new~~market ~~restaurants~~demographics in(including apopulation, age and ~~timely~~median ~~manner~~household income); ~~attract,~~traffic ~~train~~patterns and ~~retain~~activity; ~~qualified~~site visibility, accessibility and parking; ~~experienced~~and ~~personnel~~proximity to residential developments, office complexes, hotels, retail establishments and ~~management~~entertainment areas. ~~Due~~Another important factor is the convenience of the potential location to both ~~these~~lunch ~~factors~~and dinner guests and ~~others~~the ~~discussed~~occupancy incost ~~this~~of ~~report,~~the proposed site. Our development strategy ~~there~~has ~~can~~been beto nocluster ~~assurance~~restaurants in markets that can support them with cost-effective media advertising. In addition, we ~~will~~believe bethat ~~able~~clustering tomultiple ~~develop~~units orallows ~~operate~~more ~~additional~~efficient supervision of the restaurants. In connection with the site selection process, potential restaurant sites are identified by our personnel and by consultants and independent real estate brokers.

We When ~~believe that the site selection process is critical to the long-term success of any restaurant, and, accordingly, when~~ we ~~open~~have adeveloped ~~company-owned restaurant~~new werestaurants ~~devote significant time and effort to the investigation and evaluation of potential locations. Among the factors considered~~ in ~~the~~existing ~~site selection process are market demographics (including population~~buildings, ~~age~~construction ~~and~~has ~~median~~taken ~~household~~approximately ~~income);~~90 ~~traffic patterns and activity; site visibility, accessibility and parking; and proximity~~ to ~~residential~~120 days ~~developments,~~after ~~office complexes,~~required ~~hotels,~~construction ~~retail~~permits ~~establishments~~have ~~and~~been ~~entertainment areas~~obtained. ~~Another~~Construction ~~important factor is the convenience~~ of ~~the~~restaurants ~~potential~~on ~~location~~vacant toland ~~both~~is ~~lunch~~a ~~and dinner~~longer ~~guests~~process and ~~the~~has ~~occupancy~~generally ~~cost~~ranged offrom ~~the~~120 ~~proposed~~to ~~site~~180 days. Our ~~development strategy~~experience to date has been tothat ~~cluster~~obtaining ~~restaurants~~construction inpermits ~~markets~~has ~~that~~generally ~~can~~taken ~~support~~from ~~them~~30 ~~with~~to ~~cost-effective media advertising~~180 days. InWe ~~addition,~~have wepreviously ~~believe~~engaged ~~that~~outside ~~clustering multiple~~general ~~units~~contractors ~~allows~~for ~~more~~construction ~~efficient supervision~~ of ~~the~~ our restaurants. ~~In connection~~and ~~with~~expect ~~the~~to ~~site~~continue ~~selection~~this ~~process,~~practice ~~potential~~for ~~restaurant~~the ~~sites~~future ~~are identified~~if ~~by our personnel~~ and bywhen ~~consultants~~we ~~and~~develop ~~independent real estate~~additional ~~brokers~~Company-owned restaurants.

~~When~~ Our weprototypical ~~have~~restaurant ~~developed~~format ~~new~~is ~~restaurants~~approximately in6,800 ~~existing~~square ~~buildings,~~feet ~~construction has~~with ~~taken~~seating for approximately 90260 toguests. ~~120 days~~Our ~~after~~restaurants ~~required~~currently ~~construction~~range ~~permits~~in ~~have been~~size ~~obtained.~~from ~~Construction~~5,000 ofto ~~restaurants~~12,000 onsquare feet, ~~vacant~~with ~~land~~seating isfor abetween ~~longer~~190 ~~process and~~to ~~has~~398 ~~generally~~guests. ~~ranged~~We ~~from~~use ~~120~~a tostandardized ~~180 days.~~design ~~Our~~in ~~experience~~constructing restaurants, towith ~~date~~modifications ~~has~~made ~~been that~~for ~~obtaining~~each ~~construction~~particular ~~permits~~site ~~has~~and ~~generally~~are ~~taken~~assisted ~~from~~by 30outside architects toin ~~180 days. We~~the ~~engage~~design ~~outside~~of ~~general~~individual ~~contractors~~restaurants. ~~for~~We ~~construction~~also ofmake our ~~restaurants~~standardized ~~and expect~~design available to ~~continue~~our ~~this~~franchisees ~~practice~~and ~~for~~have ~~the~~final ~~foreseeable~~right ~~future~~of ifapproval ~~and~~on ~~when~~the ~~we develop~~design ~~additional~~of ~~company-owned~~each ~~restaurants~~franchised restaurant.

~~Our~~FRANCHISED ~~prototypical~~AND ~~restaurant~~LICENSED ~~format is approximately 6,800 square feet with~~RESTAURANTS seating for approximately 260 guests. Our restaurants currently range in size from 5,000 to 12,000 square feet, with seating for between 190 to 398 guests. We use a standardized design in constructing restaurants, with modifications made for each particular site and are assisted by outside architects in the design of individual restaurants. We also make our standardized design available to our franchisees and have final right of approval on the design of each franchised restaurant.

We ~~believe that our restaurants~~ have alimited ~~comfortable~~franchise ~~atmosphere~~operations ~~and~~as ~~are visually~~of ~~appealing~~the ~~with~~date ~~exposed~~of ~~ceilings~~this ~~and~~Form ~~brick~~10-K, and ~~lapboard~~franchise ~~cedar~~fees ~~walls~~and ~~decorated~~royalties ~~with~~were ~~colorful~~less ~~murals~~than ~~and~~1% ~~neon~~of ~~signs.~~our ~~The~~revenues ~~typical~~for ~~interior~~each ~~also includes~~of ~~multi-level~~the ~~seating,~~last athree ~~full-service~~fiscal ~~bar~~years. However, ~~an exhibition grill and~~we ~~display~~believe ~~kitchen.~~that ~~The~~opportunities ~~exterior~~exist ofto ~~each~~expand ~~restaurant~~our ~~features~~franchised ~~rough-sawed siding~~restaurants, a ~~wrap-around~~and ~~wood~~we ~~plank~~hope ~~porch,~~to apursue ~~tin~~these opportunities ~~roof trimmed~~ in ~~neon~~the ~~and an oversized “Roadhouse Grill” sign~~future. InThere ~~addition~~can tobe ~~the~~no ~~public~~assurance ~~areas,~~we ~~each~~will ~~restaurant~~be ~~has~~successful ~~a food~~in ~~preparation~~our ~~and storage area including a fully-equipped kitchen~~franchise strategy.

20 The following table sets forth the location of franchised and licensed restaurants open as of April 24, 2005:


	Number of
Location	Restaurants
Italy		6
Malaysia		3
Nevada		1
Ohio		1
Brasilia, Brazil		1


Total		12

~~FRANCHISED~~ We ~~AND~~currently ~~LICENSED~~have ~~RESTAURANTS~~six franchisees and licensees: Roadhouse Grill Italia S.R.L, Roadhouse Grill Asia Pacific (H.K.) Limited (“Roadhouse Grill Hong Kong”), Roadhouse Grill Asia Pacific (Cayman) Limited

~~The following table sets forth the location of franchised and licensed~~18 ~~restaurants open as of April 25, 2004:~~

	Number of
Location	Restaurants
Nevada		1
Ohio		1
Italy		5
Malaysia		3
Brasilia, Brazil		1
Total		11

~~We currently have six franchisees and licensees: Roadhouse Grill Italia S.R.L, Roadhouse Grill Asia Pacific~~ (~~H.K.) Limited (~~“Roadhouse Grill ~~Hong Kong”), Roadhouse Grill~~ Asia ~~Pacific (Cayman) Limited (“Roadhouse Grill Asia~~”), Brent Empreendimentos e Alimentacao Ltda. (“Roadhouse Grill Brazil”), NAHI, Inc. and Roadhouse Operating Company, LLC (“Roadhouse Operating”). Berjaya, ~~our~~ our majority shareholder, beneficially owns Roadhouse Grill Hong Kong and Roadhouse Grill Asia.

We Roadhouse ~~are~~Grill ~~currently~~Italia ~~seeking~~S.R.L. toOn ~~develop~~July 6, ~~additional~~2000, ~~franchising~~we ~~opportunities on~~entered aninto ~~international~~a ~~basis~~joint venture agreement with the ~~primary~~Cremonini ~~focus~~Group, ona ~~development~~publicly-traded Italian conglomerate and parent company of Roadhouse Grill Italia S.R.L., specializing in the food service industry in Europe. Under the original joint venture agreement, ~~South~~Cremonini Group was required to open and operate at least 60 Roadhouse Grill ~~America~~restaurants in Italy, France, Spain, Great Britain and other principal European countries. In March 2004, the ~~Caribbean~~joint venture and related agreements with the Cremonini Group was terminated and replaced with a trademark license agreement with Roadhouse Grill Italia S.R.L. We(“RGI”) ~~are~~(the “License ~~also~~Agreement”). ~~actively~~Under ~~seeking~~the ~~multi-unit~~License Agreement, we have granted RGI the exclusive right to ~~franchising~~develop a minimum of 36 restaurants in Italy during the ~~United~~next ~~States~~ten years, including the four restaurants opened prior to 2004. ~~There~~RGI ~~can~~has bethe noright ~~assurance~~to discontinue the development of new restaurants on January 1, 2009 based on the operating restaurants existing at that wetime ~~will~~not bemeeting ~~successful~~certain performance criteria. RGI also was granted a right of first refusal in ~~our~~regards ~~franchising~~to developing ~~efforts~~Roadhouse Grill restaurants in other selected European countries. We are not required to make any capital contribution in connection with the development of these restaurants.

~~Roadhouse~~ In ~~Grill~~accordance ~~Italia S.R.L. On July 6, 2000, we entered into a joint venture agreement~~ with the ~~Cremonini~~terms ~~Group, a publicly-traded Italian conglomerate and parent company~~ of ~~Roadhouse~~the ~~Grill~~License ~~Italia S.R.L.~~Agreement, ~~specializing in~~RGI ~~the~~is ~~food~~required ~~service~~to ~~industry~~pay inus ~~Europe.~~a ~~Under the original joint venture~~fixed ~~agreement,~~development ~~Cremonini~~fee ~~Group~~for ~~was~~each ~~required~~restaurant to ~~open~~be ~~and~~opened ~~operate at least 60 Roadhouse Grill restaurants~~ in ~~Italy,~~accordance ~~France,~~with ~~Spain,~~the ~~Great~~development ~~Britain~~schedule ~~and~~at ~~other~~the ~~principal~~earliest ~~European~~to ~~countries.~~occur Inof ~~March 2004,~~ the ~~joint~~restaurant ~~venture~~opening ~~and~~or ~~related agreements with~~ the ~~Cremonini~~end ~~Group~~of ~~was~~the ~~terminated~~applicable ~~and~~calendar ~~replaced~~year. ~~with a~~In ~~trademark~~addition, ~~license~~we ~~agreement~~are ~~with~~entitled ~~Roadhouse~~to ~~Grill~~fixed ~~Italia~~royalty ~~S.R.L.~~fees ~~(“RGI”)~~at (the ~~“License~~ ~~Agreement”).~~beginning ~~Under~~of ~~the~~each ~~License~~calendar ~~Agreement,~~year webased ~~have~~on ~~granted RGI~~ the ~~exclusive~~number ~~right to develop a minimum~~ of 36 restaurants incurrently ~~Italy~~open ~~during~~or ~~the~~scheduled ~~next ten~~to ~~years,~~open ~~including~~by the ~~four~~end ~~restaurants~~of ~~opened~~the ~~prior~~following tocalendar ~~2004. RGI has the~~year ~~right~~in toaccordance ~~discontinue~~with the development ofschedule. ~~new~~The ~~restaurants~~payment onobligations ~~January 1,~~of ~~2009 based~~RGI onunder the ~~operating~~License Agreement ~~restaurants~~are ~~existing~~guaranteed atby ~~that~~the ~~time~~Cremonini ~~not meeting certain performance criteria~~Group. ~~RGI~~As ~~also~~of ~~was~~April 24, ~~granted~~2005, athere ~~right~~are ofsix ~~first~~franchised restaurants ~~refusal~~operating in ~~regards to~~Italy ~~developing~~and ~~Roadhouse~~RGI ~~Grill~~has ~~restaurants~~paid inus ~~other~~all ~~selected~~fees ~~European countries. We are not~~ required to ~~make~~be ~~any~~paid ~~capital~~under ~~outlay in connection with~~ the ~~development~~ ~~of these restaurants~~License Agreement.

In Roadhouse ~~accordance~~Grill Hong Kong. During January 1996, we entered into a Master Development Agreement with Roadhouse Grill Asia Pacific (HK) Limited (“Roadhouse Grill Hong Kong”), which is for an indefinite period and provides for the development and franchising of Roadhouse Grill restaurants in Hong Kong. The Master Development Agreement was amended by an addendum to Master Development Agreement, dated August 2003 (as amended, the “Hong Kong Master Development Agreement”). Under the terms of the ~~License~~Hong Kong Master Development Agreement, ~~RGI~~we iswill ~~required~~be entitled to receive 50% of all ~~pay~~revenues usreceived aby ~~fixed~~Roadhouse ~~development~~Grill ~~fee~~Hong Kong from third party franchisees, including, but not limited to, franchise fees, reservation fees and royalty fees. The Hong Kong Master Development Agreement provides for ~~each~~minimum ~~restaurant~~initial franchise and ongoing royalty fees. In addition, Roadhouse Grill Hong Kong has agreed to beestablish ~~opened~~an office for the purpose of selling Roadhouse Grill franchises in ~~accordance~~Hong Kong. Subject to the selling of franchises by Roadhouse Grill Hong Kong in accordance with ~~the~~an agreed upon development schedule, atwe ~~the~~will ~~earliest~~pay to50% ~~occur~~ of the ~~restaurant~~pre-approved budgeted ~~opening~~expenses orof the ~~end~~office. Roadhouse Grill Hong Kong has agreed to pay 50% of the ~~applicable~~out-of-pocket expenses ~~calendar~~incurred ~~year.~~by Inus ~~addition,~~in weconnection ~~are entitled~~with toour ~~fixed~~duties ~~royalty~~and ~~fees~~obligations atunder the ~~beginning~~Hong ofKong Master Development Agreement. Roadhouse Grill Hong Kong and us will each ~~calendar~~be ~~year~~50% ~~based~~responsible onfor any liabilities that arise from the ~~number~~attraction, selection, granting, administration and supervision of franchisees ~~restaurants~~(except ~~currently~~for ~~open~~any liabilities caused solely or ~~scheduled~~primarily by either of them, which such causing party shall be fully responsible for), and Roadhouse Grill Hong Kong has agreed to ~~open~~maintain an byinsurance ~~the~~policy ~~end~~for coverage against such liabilities. Roadhouse Grill Hong Kong is not required to develop any specific number of ~~the~~restaurants in Hong Kong, but must use its best efforts ~~following~~to ~~calendar~~sell ~~year~~franchises in accordance with ~~the~~an agreed upon development schedule. ~~The~~Under certain ~~payment~~circumstances, ~~obligations~~Roadhouse ofGrill ~~RGI~~Hong ~~under~~Kong ~~the~~may ~~License~~also ~~Agreement~~establish ~~are~~its ~~guaranteed~~own byRoadhouse Grill restaurants in Hong Kong. In that event, Roadhouse Grill Hong Kong is not required to pay any franchise or reservation fee for its restaurants, but is required to pay us royalty fees based on gross sales in connection with the operation of each of its restaurants. Roadhouse Grill Hong Kong is also responsible for paying or reimbursing approved expenses

2119

incurred by us in connection with the ~~Cremonini~~opening ~~Group~~of each restaurant. As of April 2524, ~~2004~~2005, ~~there are five franchised~~Roadhouse ~~restaurants~~Grill ~~operating~~Hong inKong ~~Italy~~had ~~and~~not ~~RGI~~developed ~~has~~or ~~paid~~opened usany ~~all~~Roadhouse ~~fees~~Grill ~~required~~restaurants topursuant ~~be paid under the License Agreement, including the development fees relating~~ to the ~~two~~Master ~~restaurants~~Development ~~to be opened in 2004~~Agreement.

Roadhouse Grill ~~Hong Kong~~Asia. During January 1996, we entered into a Master Development Agreement with Roadhouse Grill Asia Pacific (HKCayman) Limited (“Roadhouse Grill Hong Kong”), which is for an indefinite period and provides for the development and franchising of Roadhouse Grill restaurants in ~~Hong Kong.~~countries ~~The~~in ~~Master~~Asia ~~Development~~and ~~Agreement~~the ~~was~~Pacific ~~amended~~Rim ~~by an addendum to Master Development Agreement, dated August 2003~~ (asother ~~amended,~~than ~~the “~~Hong Kong ~~Master Development Agreement”~~)., ~~Under the terms of the Hong Kong Master Development Agreement~~including, webut ~~will~~not belimited ~~entitled~~ to ~~receive 50% of all revenues received by~~, ~~Roadhouse~~Australia, ~~Grill~~China, ~~Hong~~India, ~~Kong~~Indonesia, ~~from third party franchisees~~Japan, ~~including~~Malaysia, ~~but~~New ~~not limited~~Zealand, toSingapore, ~~franchise~~South ~~fees~~Korea, ~~reservation~~the Philippines ~~fees~~ and ~~royalty fees~~Thailand. The ~~Hong Kong~~ Master Development Agreement ~~provides~~was ~~for~~amended ~~minimum~~by ~~initial~~an ~~franchise~~addendum ~~and~~to ~~ongoing~~Master ~~royalty~~Development ~~fees. In addition~~Agreement, ~~Roadhouse~~dated ~~Grill~~August 2003 ~~Hong~~(as ~~Kong~~amended, ~~has agreed to establish an office for~~ the ~~purpose~~“Asia ofMaster ~~selling~~Development ~~Roadhouse Grill franchises in Hong Kong~~Agreement”). ~~Subject~~The tomaterial ~~the~~terms ~~selling~~ of ~~franchises~~the byAsia ~~Roadhouse~~Master ~~Grill~~Development ~~Hong Kong in accordance with an agreed upon development schedule~~Agreement, weincluding ~~will~~the ~~pay~~terms ~~50%~~relating ofto the ~~pre-approved~~ ~~budgeted~~establishment ~~expenses~~ of ~~the~~an office. ~~Roadhouse~~and ~~Grill~~the ~~Hong~~sharing ~~Kong~~of ~~has~~franchising ~~agreed~~revenues, tooffice ~~pay 50%~~expenses ofand ~~the out-of-pocket~~ certain expenses, ~~incurred~~are bysubstantially usthe insame ~~connection~~as ~~with~~those ~~our duties and obligations~~ under the Hong Kong Master Development Agreement~~. Roadhouse~~ ~~Grill~~summarized ~~Hong~~above. ~~Kong~~Under ~~and us will each be 50% responsible for any liabilities that arise from~~ the ~~attraction,~~Asia ~~selection,~~Master ~~granting,~~Development ~~administration and supervision of franchisees (except for any liabilities caused solely or primarily by either of them~~Agreement, ~~which such causing party shall be fully responsible for), and~~ Roadhouse Grill ~~Hong~~Asia ~~Kong has agreed to maintain an insurance policy for coverage against such liabilities. Roadhouse Grill Hong Kong~~ is not ~~required~~ required to develop any specific number of restaurants in ~~Hong Kong~~Asia, but must use its best efforts to sell franchises in accordance with an agreed upon development schedule. ~~Under certain circumstances, Roadhouse Grill Hong Kong may also~~ establish its own Roadhouse Grill restaurants in Hong Kong. In that event, Roadhouse Grill Hong Kong is not required to pay any franchise or reservation fee for its restaurants, but is required to pay us royalty fees based on gross sales in connection with the operation of each of its restaurants. Roadhouse Grill Hong Kong is also responsible for paying or reimbursing approved expenses incurred by us in connection with the opening of each restaurant. As of April 25, 2004, Roadhouse Grill Hong Kong had not developed or opened any Roadhouse Grill restaurants pursuant to the Master Development Agreement.

~~Roadhouse~~ As ~~Grill~~of ~~Asia. During January~~April ~~1996~~24, we2005, ~~entered~~there ~~into~~were athree ~~Master Development Agreement with~~ Roadhouse Grill ~~Asia~~restaurants ~~Pacific~~operating ~~(Cayman)~~in ~~Limited (“Roadhouse~~Malaysia ~~Grill Hong Kong”), which is for an indefinite period and provides~~under ~~for~~ the ~~development~~Master ~~and~~Development ~~franchising~~Agreement ofwith Roadhouse Grill ~~restaurants in countries in~~ Asia. ~~and~~We ~~the~~recorded ~~Pacific~~less ~~Rim (other~~ than ~~Hong~~$0.1 million ~~Kong), including, but not limited~~in ~~to,~~royalty ~~Australia,~~income ~~China,~~from ~~India,~~those ~~Indonesia,~~restaurants ~~Japan,~~during ~~Malaysia,~~fiscal ~~New~~2005. ~~Zealand, Singapore,~~Royalty ~~South~~income ~~Korea,~~is ~~the~~currently ~~Philippines~~being ~~and Thailand. The Master Development~~offset ~~Agreement~~against ~~was~~interest ~~amended~~that bywe anowe ~~addendum~~ to ~~Master Development Agreement, dated August 2003 (as amended, the “Asia Master Development Agreement”)~~Berjaya. ~~The material~~This ~~terms~~offset of ~~the~~royalty ~~Asia~~income ~~Master~~will ~~Development~~continue ~~Agreement,~~until ~~including~~ the ~~terms~~ ~~relating~~royalty toreceivable ~~the~~exceeds ~~establishment of an office and~~ the ~~sharing~~amount ofdue ~~franchising revenues~~Berjaya, ~~office~~which ~~expenses~~approximates ~~and~~$0.1 million ~~certain~~as ~~expenses,~~of ~~are substantially the same as~~April 24, ~~those~~2005. ~~under~~Once the ~~Hong~~royalty ~~Kong~~receivable ~~Master~~exceeds ~~Development Agreement summarized above. Under~~ the ~~Asia~~payable ~~Master~~to ~~Development Agreement~~Berjaya, ~~Roadhouse~~we ~~Grill~~expect ~~Asia is not required~~ to ~~develop~~ ~~any~~begin ~~specific number of restaurants in Asia, but must use its best~~collecting ~~efforts~~the toearned ~~sell~~royalty ~~franchises in accordance with an agreed upon development schedule~~fees.

As Roadhouse ofGrill ~~April~~Brazil. In May 251999, ~~2004,~~we ~~there~~entered ~~were~~into ~~three~~a Master Development Agreement with Roadhouse Grill ~~restaurants~~Brazil, which provides for the development and franchising of Roadhouse Grill ~~operating~~restaurants in ~~Malaysia~~Brazil. ~~under~~Under the ~~Master~~agreement, ~~Development~~Roadhouse ~~Agreement~~Grill ~~with~~Brazil is required to open and maintain at least eight Roadhouse Grill restaurants during the first ten years of the term of the agreement. Roadhouse Grill ~~Asia~~Brazil pays us a one-time franchise fee for each new restaurant opened and an ongoing service fee based on gross sales. WeRoadhouse ~~recorded~~Grill Brazil currently operates one Roadhouse Grill restaurant in Brasilia, Brazil. As of April 24, 2005, the receivable due from Roadhouse Grill Brazil was less than $0.1 million ~~in royalty~~.

22 Ohio franchisee. In March 2002, we entered into a Master Development Agreement with NAHI, Inc., granting the exclusive right to build five restaurants in five years in the Cincinnati/Tri State area of Ohio and Kentucky. In order to maintain these exclusive rights, the franchisee must comply with the terms of the agreement including, but not limited to, opening one restaurant per year. As of April 24, 2005, the franchisee has not complied with the development schedule. However, to date, we have not taken any action in regard to terminating the agreement, although we reserve the right to do so. Currently, there is one restaurant open pursuant to this Master Development Agreement.

~~Table~~ Roadhouse Operating. Roadhouse Operating entered into an initial franchise agreement and Master Development Agreement with us (the “Roadhouse Operating Master Development Agreement”) in August 1995 for the exclusive development of ~~Contents~~up to five restaurants, over a period which ended October 31, 1999, in Clark County, Nevada (which includes the Las Vegas, Nevada metropolitan area). Roadhouse Operating initially opened three Roadhouse Grill restaurants. Two of these have been closed, and one is currently being operated.

~~income~~ Roadhouse ~~from~~Operating ~~those~~is ~~restaurants~~obligated ~~during~~to ~~fiscal~~pay ~~2004.~~us ~~Royalty~~a ~~income~~percentage ~~is currently~~royalty ~~being~~fee ~~offset~~based ~~against~~on ~~interest~~gross ~~that we owe to Berjaya~~sales. ~~This offset of~~As ~~royalty~~of ~~income~~April 24, ~~will~~2005, ~~continue until~~ the ~~royalty~~ receivable ~~exceeds~~from ~~the~~Roadhouse ~~amount due~~Operating ~~Berjaya,~~was ~~which~~approximately ~~approximates~~ $0.1 million. asDue to lack of ~~April 25~~payment, ~~2004.~~this ~~Once~~amount ~~the royalty~~has ~~receivable~~been ~~exceeds~~fully ~~the~~reserved. ~~payable~~We toare ~~Berjaya,~~also wethe ~~expect~~guarantor toof ~~begin~~equipment ~~collecting~~leases for the ~~earned royalty fees.~~three

~~Roadhouse Grill Brazil. In May 1999, we entered into a Master Development~~20 Agreement with Roadhouse Grill Brazil, which provides for the development and franchising of Roadhouse Grill restaurants in Brazil. Under the agreement, Roadhouse Grill Brazil is required to open and maintain at least eight Roadhouse Grill restaurants during the first ten years of the term of the agreement. Roadhouse Grill Brazil pays us a one-time franchise fee for each new restaurant opened and an ongoing service fee based on gross sales. Roadhouse Grill Brazil currently operates one Roadhouse Grill restaurant in Brasilia, Brazil. As of April 25, 2004, the receivable from Roadhouse Grill Brazil was less than $0.1 million.

restaurants, owned by Roadhouse ~~Operating~~West G.P., an affiliate of Roadhouse Operating. ~~entered~~In ~~into~~addition, management anunderstands ~~initial~~that other parties have also guaranteed these obligations. Roadhouse West ~~franchise~~G.P. ~~agreement~~is ~~and~~currently ~~Master~~in ~~Development~~default ~~Agreement~~of ~~with~~the uspayment (terms of the ~~“Roadhouse~~operating leases and management believes ~~Operating~~that ~~Master~~the ~~Development~~balance ~~Agreement”)~~of inthe ~~August~~remaining lease payments due is approximately $1.0 ~~1995~~million. ~~for~~The ~~the~~leases ~~exclusive~~are ~~development~~collateralized ofby upthe toleased ~~five~~equipment ~~restaurants,~~and ~~over~~certain aleasehold ~~period~~improvements. ~~which~~Roadhouse ~~ended~~West ~~October 31,~~G.P. is ~~1999,~~currently being liquidated in ~~Clark~~a ~~County,~~Chapter 7 ~~Nevada~~proceeding. ~~(which~~We ~~includes~~cannot predict the ~~Las~~outcome ~~Vegas,~~of ~~Nevada~~this ~~metropolitan~~proceeding ~~area).~~but ~~Roadhouse~~believe ~~Operating~~that ~~initially~~any ~~opened~~potential ~~three~~liability ~~Roadhouse~~that ~~Grill~~we have under our guarantees will be ~~restaurants.~~mitigated ~~Two~~by ofthe ~~these~~collateral ~~have~~described ~~been~~above ~~closed~~and, ~~and~~accordingly, ~~one~~we ishave ~~currently~~not ~~being~~recorded a reserve for ~~operated~~any possible obligations that may arise relating to these proceedings.

~~Roadhouse~~ITEM ~~Operating is obligated to pay us a percentage royalty fee based on gross sales. As of April 25, 2004, the receivable from Roadhouse Operating was approximately $0.~~2 ~~million~~. ~~Due to lack of payment, this amount has been~~PROPERTIES fully reserved. We are also the guarantor of equipment leases for the three restaurants, owned by Roadhouse West G.P., an affiliate of Roadhouse Operating. In addition, management understands that other parties have also guaranteed these obligations. Roadhouse West G.P. is currently in default of the payment terms of the operating leases and management believes that the balance of the remaining lease payments due is approximately $1.0 million. The leases are collateralized by the leased equipment and certain leasehold improvements. Roadhouse West G.P. has recently filed for Chapter 11 bankruptcy, and such proceeding has now been converted to a Chapter 7 proceeding. We cannot predict the outcome of these proceedings but believe that any potential liability will be mitigated by the factors described above and, accordingly, we have provided no reserve for any possible obligations that may arise relating to these proceedings.

~~ITEM~~ As 2of April 24, 2005, all of our Company-owned open restaurants were located in leased space. Initial ~~PROPERTIES~~lease expirations range from five to 20 years, with the majority of the leases providing us with renewal options extending the lease term. All of our leases provide for a minimum annual rent, and several leases call for annual or other escalations at various points in the lease term or for additional rent based on sales volume at the particular location over specified minimum levels. Generally, the leases are triple net leases, which require us to pay the costs of insurance, taxes and a portion of the lessors’ operating costs. We believe that our facilities are in satisfactory condition, are suitable for their intended use and are, in the aggregate, sufficient for our present business needs.

As On ~~of April~~August 256, 2004, ~~all~~we ~~but~~closed 11a oftransaction ~~our~~with ~~company-owned~~Sovereign ~~open~~involving ~~restaurants~~the sale and leaseback of ~~were~~11 ~~located~~restaurant inproperties ~~leased~~that ~~space~~we had previously owned. ~~Initial~~The ~~lease~~sale ~~expirations~~price ~~range~~for ~~from~~the ~~five~~11 toproperties 20was ~~years,~~$21.8 million. ~~with~~The ~~the~~properties ~~majority~~are ofbeing ~~the~~leased ~~leases~~under ~~providing~~lease usagreements ~~with~~that ~~renewal~~extend ~~options~~for 20 years and ~~extending~~include ~~the~~four ~~lease~~five-year ~~term~~renewal options. ~~All~~See ofNote ~~our~~5 ~~leases~~of ~~provide~~Notes ~~for~~to aConsolidated ~~minimum~~Financial ~~annual rent,~~Statements. ~~and several~~

23 In December 2003, we completed a sale and leaseback transaction of our corporate headquarters building. Gross proceeds from the sale were $3.0 million. The net proceeds of $2.6 million, after payment of expenses and security deposits, were used, in part, to pay debt related to the facility of $1.5 million. The remaining net proceeds of $1.1 million were retained by us for general corporate purposes. The leaseback agreement provides for rent to be paid on a triple net basis and extends for a period of 15 years with two five-year renewal options. We occupy approximately 19,000 square feet of the facility and have leased the remaining 11,500 square feet through May 2007.

~~Table~~ We ofalso ~~Contents~~own the land and building related to a closed store that is held for sale. The property is expected to be sold in fiscal 2006.

~~leases~~ITEM ~~call for annual or other escalations at various points in the lease term or for additional rent based on sales volume at the particular location over specified minimum levels~~3. ~~Generally,~~LEGAL ~~the leases are triple net leases,~~PROCEEDINGS which require us to pay the costs of insurance, taxes and a portion of the lessors’ operating costs. We believe that our facilities are in satisfactory condition, are suitable for their intended use and are, in the aggregate, sufficient for our present business needs.

On We ~~August 6,~~are ~~2004,~~a weparty ~~closed~~to acertain ~~transaction~~legal ~~with~~proceedings ~~Sovereign~~arising ~~Roadhouse~~in ~~LLC,~~the ~~a wholly-owned~~ordinary ~~subsidiary~~course of ~~Sovereign~~business. ~~Investment Company, (“Sovereign”)~~While ~~involving~~it ~~the~~is ~~sale~~not ~~and~~possible ~~leaseback~~to ofpredict ~~eleven~~or ~~restaurant~~determine ~~properties~~the ~~that~~outcome weof ~~had previously~~any ~~owned.~~particular ~~The~~proceeding, ~~sale~~we ~~price~~do ~~for the eleven properties was $21.8 million.~~not ~~The~~believe ~~properties~~that ~~are~~our ~~being~~liability ~~leased~~resulting from ~~Sovereign~~these ~~under~~proceedings ~~lease~~individually ~~agreements~~or ~~that extend~~in ~~for~~the ~~20 years~~aggregate ~~and~~will have ~~include~~a ~~four~~material ~~five-year~~adverse ~~renewal~~effect ~~options.~~on ~~See~~our ~~Note~~financial 20position, results of ~~Notes~~ tooperations ~~Consolidated~~or ~~Financial Statements~~business.

InITEM ~~December 2003, we completed a sale and leaseback transaction relating to our corporate headquarters building~~4. ~~Gross~~SUBMISSION ~~proceeds~~OF ~~from~~MATTERS ~~the~~TO ~~sale~~A ~~were~~VOTE ~~$3.0 million.~~OF ~~The~~SECURITY ~~net proceeds of $2.6 million, after payment of expenses and~~HOLDERS security deposits, were used, in part, to pay debt related to the facility of $1.5 million. The remaining net proceeds of $1.1 million were retained by us for working capital and general corporate purposes. The leaseback agreement provides for rent to be paid on a triple net basis and extends for a period of 15 years with two five-year renewal options. We occupy approximately 19,000 square feet of the facility and have leased the remaining 11,500 square feet through May 2007.

We No ~~also~~actions ~~own~~were ~~the~~submitted ~~land and building related~~ to a ~~closed~~vote ~~store~~of ~~that~~our ~~is currently~~shareholders ~~held~~during ~~for sale. We are currently marketing this facility and hope to complete~~ the ~~sale~~fourth quarter of ~~this facility during~~ fiscal 2005.

~~ITEM 3. LEGAL PROCEEDINGS~~21

~~Please~~PART ~~refer to Note 2 of Notes to Consolidated Financial Statements for~~II ~~information regarding our Chapter 11 reorganization proceedings that were completed in September 2002.~~

~~CLASS~~ITEM ~~ACTION~~5. ~~SUIT~~MARKET FOR REGISTRANT’S COMMON EQUITY AND ~~SEC~~RELATED ~~INFORMAL~~STOCKHOLDER ~~INVESTIGATION~~MATTERS

~~See~~MARKET ~~Note 14 of Notes to Consolidated Financial Statements for information~~INFORMATION regarding the putative class action that was filed against us and two of our directors and was recently dismissed and the informal SEC investigation that arose as a result of the restatement of our audited financial statements for the fiscal years ended 2000 and 1999 and the first three fiscal quarters of fiscal 2001.

~~OTHER~~ As of April 24, 2005, we had outstanding 29,220,663 shares of common stock, par value $0.03 per share. Our common stock is currently quoted on the Pink Sheets under the symbol “GRLL.PK.”

We The ~~are~~following atable ~~party~~sets toforth, ~~certain~~for ~~legal~~the ~~proceedings~~periods ~~arising~~indicated, in the ~~ordinary~~highest ~~course of~~and ~~business.~~lowest ~~While~~closing itsale prices isfor ~~not possible to predict or determine~~ the ~~outcome~~common ~~of any of these proceedings~~stock, weas doreported ~~not believe that any liability resulting from these proceedings will have a material adverse effect~~ on ~~our~~the ~~financial position,~~Pink ~~results of operations or business.~~Sheets:


	HIGH($)		LOW($)
FISCAL 2004
First Quarter		0.45		0.15
Second Quarter		0.45		0.10
Third Quarter		0.35		0.10
Fourth Quarter		0.40		0.10

FISCAL 2005
First Quarter		0.35		0.05
Second Quarter		0.16		0.12
Third Quarter		0.20		0.10
Fourth Quarter		0.45		0.19

FISCAL 2006
First Quarter (to August 10, 2005)		0.40		0.14

~~Table~~DIVIDEND ~~of Contents~~POLICY

~~ITEM~~ We 4have not declared or paid any cash dividends or distributions on our capital stock. ~~SUBMISSION~~We OFdo not ~~MATTERS~~intend TOto Apay ~~VOTE~~any OFcash ~~SECURITY~~dividends ~~HOLDERS~~on our common stock in the foreseeable future. Future earnings, if any, will be used to support operations and finance expansion. Future declaration and payment of dividends, if any, will be determined in light of then current conditions, including our earnings, operations, capital requirements, financial condition, and other factors deemed relevant by our Board of Directors, at their discretion.

~~No actions were submitted to a vote of our shareholders during the fourth~~SHAREHOLDERS ~~quarter of fiscal 2004.~~

25 As of August 12, 2005, there were approximately 80 shareholders of record of our common stock. A portion of our outstanding common stock is held of record in broker “street name” for the benefit of individual investors, and we believe that as of the date of this report there are approximately 900 beneficial holders of our common stock.

~~Table of Contents~~22

~~ITEM 5. MARKET FOR REGISTRANT’S COMMON~~ EQUITY ~~AND~~COMPENSATION ~~RELATED~~PLAN ~~STOCKHOLDER MATTERS~~INFORMATION

~~MARKET~~ See ~~INFORMATION~~Item 11.

~~As of April 25, 2004, we had outstanding 29,220,663 shares of common~~23 stock, par value $0.03 per share. Our common stock is currently quoted on the Pink Sheets under the symbol “GRLL.PK.” Our common stock traded on the Nasdaq National Market until it was delisted in May 2002. The following table sets forth, for the periods indicated, the highest and lowest closing sale prices for the common stock, as reported by the Nasdaq National Market through May 2002 and on the Pink Sheets thereafter:

	HIGH($)		LOW($)
FISCAL 2003
First Quarter		0.60		0.05
Second Quarter		0.80		0.10
Third Quarter		0.80		0.10
Fourth Quarter		0.30		0.05
FISCAL 2004
First Quarter		0.45		0.15
Second Quarter		0.45		0.10
Third Quarter		0.35		0.10
Fourth Quarter		0.40		0.10
FISCAL 2005
First Quarter		0.35		0.05
Second Quarter (to August 6, 2004)		0.125		0.12

~~DIVIDEND~~ITEM ~~POLICY~~6. SELECTED FINANCIAL DATA

We The ~~have~~following ~~not~~table ~~declared~~sets orforth ~~paid~~for ~~any~~the ~~cash~~periods ~~dividends~~and ordates ~~distributions~~indicated onselected ~~our capital~~financial ~~stock.~~data ~~We do not intend to pay any cash dividends on our common stock~~of in the ~~foreseeable future~~Company. ~~Future~~The ~~earnings,~~following ifshould ~~any, will~~ be ~~used~~read toin ~~support operations~~conjunction ~~and~~with ~~finance~~the ~~expansion.~~Consolidated ~~Future~~Financial Statements ~~declaration~~ and ~~payment~~Notes ofthereto ~~dividends, if~~and ~~any,~~“Management’s ~~will~~Discussion beand ~~determined~~Analysis ~~in light~~ of ~~then~~Financial ~~current~~Condition ~~conditions, including our earnings, operations, capital requirements, financial condition,~~ and ~~other~~ ~~factors~~Results ~~deemed~~of ~~relevant~~Operations” byappearing ~~our~~elsewhere ~~Board~~in ofthis ~~Directors,~~Form ~~at their discretion~~10-K.

SHAREHOLDERS


	Fiscal			Fiscal			Fiscal			Fiscal			Fiscal
STATEMENT OF OPERATIONS DATA:	2005			2004			2003			2002			2001
(dollars in thousands, except per
share data):
Total revenues	$	129,207		$	139,380		$	140,924		$	158,982		$	168,055
Cost of restaurant sales:
Food and beverage		46,082			49,271			47,439			55,066			59,112
Labor and benefits		41,829			45,078			47,860			51,817			54,059
Occupancy and other		34,010			33,483			34,567			37,580			39,269
Pre-opening expenses		—			120			124			477			2,481

Total cost of restaurant sales		121,921			127,952			129,990			144,940			154,921

Depreciation and amortization		6,197			7,078			7,460			8,991			10,297
General and administrative expenses		6,775			6,506			6,956			9,106			10,954
Asset impairment		1,768			964			5,854			7,507			3,066
Restructuring charge		—			(96	)		46			5,086			—
Reorganization expenses		—			—			2,726			876			—

Total operating expenses		136,661			142,404			153,032			176,506			179,238

Operating loss		(7,454	)		(3,024	)		(12,108	)		(17,524	)		(11,183	)

Other income (expense):
Gain on extinguishment of debt		7,102			—			—			—			—
Interest expense, net		(1,550	)		(3,236	)		(2,289	)		(3,810	)		(3,655	)
Other, net		(464	)		282			75			(60	)		800

Total other income (expense)		5,088			(2,954	)		(2,214	)		(3,870	)		(2,855	)

Loss before income taxes and extraordinary gain		(2,366	)		(5,978	)		(14,322	)		(21,394	)		(14,038	)
Income tax expense (benefit)		75			(1	)		(1,241	)		49			1,818

Loss before extraordinary gain		(2,441	)		(5,977	)		(13,081	)		(21,443	)		(15,856	)

~~As of August 6, 2004, there were approximately 80 shareholders of record~~24 of our common stock. A portion of our outstanding common stock is held of record in broker “street name” for the benefit of individual investors, and we believe that as of the date of this report there are approximately 900 beneficial holders of our common stock.


	Fiscal			Fiscal			Fiscal			Fiscal			Fiscal
STATEMENT OF OPERATIONS DATA:	2005			2004			2003			2002			2001
(dollars in thousands, except per
share data):
Extraordinary gain		—			—			1,838			—			—

Net loss	($	2,441	)	($	5,977	)	($	11,243	)	($	21,443	)	($	15,856	)


Basic net loss per common share:
Basic net loss per common share	($	0.08	)	($	0.20	)	($	0.56	)	($	2.21	)	($	1.63	)

Diluted net loss per common share:
Diluted net loss per common share	($	0.08	)	($	0.20	)	($	0.56	)	($	2.21	)	($	1.63	)


Weighted average common shares outstanding		29,220,663			29,220,663			20,000,744			9,708,741			9,708,741


Weighted average common shares and share equivalents outstanding assuming dilution		29,220,663			29,220,663			20,000,744			9,708,741			9,708,741

~~EQUITY COMPENSATION PLAN INFORMATION~~25


	Fiscal		Fiscal		Fiscal		Fiscal		Fiscal
BALANCE SHEET DATA:	2005		2004		2003		2002		2001
(dollars in thousands)
Cash and cash equivalents	$	810	$	1,181	$	2,956	$	3,193	$	1,582
Total current assets		3,890		3,804		7,393		7,618		8,889
Property and equipment		24,593		49,512		60,024		71,926		87,204

Total assets		31,714		57,314		71,304		83,354		100,328

Total current liabilities		17,164		17,856		19,474		10,888		56,692
Liabilities subject to compromise – pre-petition		—		—		—		54,757		—
Liabilities subject to compromise – GAP		—		—		—		2,181		—
Long-term debt, including current portion *		5,597		32,666		39,559		—		42,179
Obligations under capital leases, including current portion *		4,600		5,398		6,714		—		5,742
Total liabilities		29,328		52,506		60,519		67,826		63,357

Total shareholders’ equity		2,386		4,808		10,785		15,528		36,971

~~Table~~* ofNote, ~~Contents~~for fiscal year 2002, total current liabilities, long term debt, capital lease debt and total liabilities do not include liabilities classified as subject to compromise.

ITEM 67. ~~SELECTED~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL ~~DATA~~CONDITION AND RESULTS OF OPERATIONS

~~The following table sets forth for the periods and dates indicated~~GENERAL selected financial data of the Company. The following should be read in conjunction with the Consolidated Financial Statements and Notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this Form 10-K.

	Fiscal			Fiscal			Fiscal			Fiscal			Fiscal
STATEMENT OF OPERATIONS DATA:	2004			2003			2002			2001			2000
(dollars in thousands, except per share data):
Total revenues	$	139,380		$	140,924		$	158,982		$	168,055		$	148,897
Cost of restaurant sales:
Food and beverage		49,271			47,439			55,066			59,112			50,268
Labor and benefits		45,078			47,860			51,817			54,059			43,512
Occupancy and other		33,483			34,567			37,580			39,269			30,067
Pre-opening expenses		120			124			477			2,481			2,387
Total cost of restaurant sales		127,952			129,990			144,940			154,921			126,234
Depreciation and amortization		7,078			7,460			8,991			10,297			8,560
General and administrative expenses		6,506			6,956			9,106			10,954			8,241
Asset impairment		964			5,854			7,507			3,066			—
Restructuring charge		(96	)		46			5,086			—			—
Reorganization expenses		—			2,726			876			—			—
Total operating expenses		142,404			153,032			176,506			179,238			143,035
Operating (loss) income		(3,024	)		(12,108	)		(17,524	)		(11,183	)		5,862
Other expense:
Interest expense, net		(3,236	)		(2,289	)		(3,810	)		(3,655	)		(2,301	)
Other, net		282			75			(60	)		800			—
Total other expense		(2,954	)		(2,214	)		(3,870	)		(2,855	)		(2,301	)
(Loss) income before income taxes, extraordinary gain, and cumulative effect of change in accounting principle		(5,978	)		(14,322	)		(21,394	)		(14,038	)		3,561
Income tax (benefit) expense		(1	)		(1,241	)		49			1,818			78
(Loss) income before extraordinary gain and cumulative effect of change in accounting principle		(5,977	)		(13,081	)		(21,443	)		(15,856	)		3,483

We operate, franchise and license high-quality full-service casual dining restaurants under the name “Roadhouse Grill.” As of April 24, 2005, there were 68 Company-owned Roadhouse Grill restaurants, 33 of which are located in Florida and the balance of which are located in Alabama, Arkansas, Georgia, Louisiana, Mississippi, New York, North Carolina, Ohio, and South Carolina. Subsequent to April 24, 2005, one restaurant was closed upon the termination of the related lease. We also have 12 franchised or licensed restaurants.

28 During the last few years, our restaurant business has been hampered by heavy debt and shortfalls of working capital to operate our business. We have also been unable to increase restaurant sales due to our lack of adequate resources to advertise our restaurants, a very competitive restaurant market, and general economic conditions. Further, we have experienced food cost increases arising from adverse market conditions, only a portion of which can be passed on to customers. All of these factors have caused us to report net losses in the last few years.

~~Table~~ During the last year, we have implemented a new main menu and a new kids’ menu, continued to make additional investments in the recruiting and training of ~~Contents~~our restaurant managers and directors of operations, implemented new incentive programs for our restaurant employees and directors of operations, taken steps to reduce our costs and attempted to pass a portion of the increased food costs on to our customers, all in an effort to return our Company to profitability.

	Fiscal			Fiscal			Fiscal			Fiscal			Fiscal
	2004			2003			2002			2001			2000
Extraordinary gain		—			1,838			—			—			—
(Loss) income before cumulative effect of change in accounting principle		(5,977	)		(11,243	)		(21,443	)		(15,856	)		3,483
Cumulative effect of change in accounting principle (net of tax benefit of $248)		—			—			—			—			(877	)
Net (loss) income	($	5,977	)	($	11,243	)	($	21,443	)	($	15,856	)	$	2,606
Basic net (loss) income per common share
Basic (loss) income before cumulative effect of change in accounting principle	($	0.20	)	($	0.56	)	($	2.21	)	($	1.63	)	$	0.36
Cumulative effect of change in accounting principle		—			—			—			—			(0.09	)
Basic net (loss) income per common share	($	0.20	)	($	0.56	)	($	2.21	)	($	1.63	)	$	0.27
Diluted net (loss) income per common share:
Diluted (loss) income before cumulative effect of change in accounting principle	($	0.20	)	($	0.56	)	($	2.21	)	($	1.63	)	$	0.36
Cumulative effect of change in accounting principle		—			—			—			—			(0.09	)
Diluted net (loss) income per common share	($	0.20	)	($	0.56	)	($	2.21	)	($	1.63	)	$	0.27
Weighted average common shares outstanding		29,220,663			20,000,744			9,708,741			9,708,741			9,708,741
Weighted average common shares and share equivalents outstanding assuming dilution		29,220,663			20,000,744			9,708,741			9,708,741			9,792,019

~~Table~~ENGAGEMENT ofOF ~~Contents~~INVESTMENT BANKING FIRM

	Fiscal		Fiscal		Fiscal		Fiscal		Fiscal
BALANCE SHEET DATA:	2004		2003		2002		2001		2000
(dollars in thousands, except share data)
Cash and cash equivalents	$	1,181	$	2,956	$	3,193	$	1,582	$	378
Total current assets		3,804		7,393		7,618		8,889		4,868
Property and equipment		49,512		60,024		71,926		87,204		92,204
Total assets		57,314		71,304		83,354		100,328		104,414
Total current liabilities		17,856		19,474		10,888		56,692		21,979
Liabilities subject to compromise – pre-petition		—		—		54,757		—		—
Liabilities subject to compromise – GAP		—		—		2,181		—		—
Long-term debt, including current portion *		32,666		39,559		—		42,179		25,661
Obligations under capital leases, including current portion *		5,398		6,714		—		5,742		6,479
Total liabilities		52,506		60,519		67,826		63,357		51,587
Total shareholders’ equity		4,808		10,785		15,528		36,971		52,827

On April 25, 2005, we engaged the investment banking firm of J. H. Chapman, L.L.C. to explore strategic alternatives. J. H. Chapman, which was founded in 1982 and is headquartered in Rosemont, Illinois, is the leading investment banking firm specializing in the food industry. With the assistance of J. H. Chapman, we are exploring potential strategic options that may be available to us. However, to date, no agreements have been executed.

*SALE/LEASEBACK ~~Note, for fiscal year 2002, total current liabilities, long term debt, capital lease debt and total liabilities do not include liabilities classified as subject to compromise.~~TRANSACTION

~~ITEM~~ On August 6, 2004, we entered into a sale/leaseback for 11 restaurant properties with Sovereign. The sale price for the 11 properties was $21.8 million. The properties have been leased back under lease agreements that extend for 20 years and include four five-year renewal options. We used approximately $18.3 million of the net proceeds from the sale to repay approximately $24.6 million of secured debt, which was repaid at a discount (resulting in a gain on extinguishment of debt of approximately $7.1 million) ~~MANAGEMENT’S~~and ~~DISCUSSION~~to ~~AND~~pay ~~ANALYSIS~~transaction OFexpenses ~~FINANCIAL~~relating ~~CONDITION~~to the ~~AND~~sale/leaseback. ~~RESULTS~~The OFnet ~~OPERATIONS~~gain from the debt repayment is reflected in our consolidated statement of operations for the fiscal year ended April 24, 2005. We also realized a gain on the sale of the properties of approximately $1.7 million, which is recorded as unearned revenue in the consolidated balance sheet as of April 24, 2005 and will be recorded as a reduction of occupancy and other expense over the life of the leases. The remaining net proceeds from the sale of approximately $3.5 million were used for general corporate purposes, including working capital to meet our ordinary course expenses.

~~GENERAL~~LOAN FROM MAJORITY SHAREHOLDER

We On August 10, ~~operate~~2005, ~~franchise~~we ~~and~~obtained ~~license~~a ~~high-quality~~$1,250,000 ~~full-service~~loan ~~casual~~from ~~dining~~our majority ~~restaurants~~shareholder. ~~under~~The ~~the~~loan ~~name~~is ~~“Roadhouse~~being ~~Grill.”~~used Asfor ofworking ~~April 25,~~capital ~~2004,~~in ~~there were~~our 69business. ~~company-owned~~See ~~Roadhouse~~Item 7. ~~Grill~~“Management’s ~~restaurants,~~Discussion 34and Analysis of ~~which~~Financial ~~are~~Condition ~~located in Florida~~ and ~~the~~Results ~~balance~~ of ~~which~~Operations ~~are located in Alabama, Arkansas, Georgia,~~— ~~Louisiana,~~Liquidity ~~Mississippi,~~and ~~New~~Capital ~~York,~~Resources” ~~North Carolina, Ohio,~~ and ~~South~~Note 22 ~~Carolina.~~of ~~We also~~Notes ~~have~~to 11Consolidated ~~franchised~~Financial ~~or licensed restaurants~~Statements.

~~During~~IMPACT ~~the~~OF ~~last few years, our restaurant business has been hampered by~~HURRICANES heavy debt, which caused, in part, our 2002 Chapter 11 proceeding. We have also been unable to increase restaurant sales due to economic conditions, our lack of adequate funding to advertise our restaurants and a very competitive restaurant market. Further, we have experienced food cost increases arising from adverse market conditions, only a portion of which can be passed on to customers. All of these factors have caused us to report significant net losses in the last few years.

~~During~~ In ~~the~~August ~~last~~and ~~year~~September 2004, wea ~~have~~number ~~revamped~~of our ~~menu~~restaurants were impacted by Hurricanes Charley, ~~made~~Frances, ~~additional~~Ivan and Jeanne, which initially hit the state of Florida and also impacted ~~investments~~certain other southern states. The hurricanes caused damage to several of our properties and resulted in the ~~recruiting~~temporary ~~and~~closure ~~training~~of a number of our ~~restaurant~~restaurants. ~~managers~~The ~~and~~hurricanes also impacted ~~directors~~customers during the six weeks over which the storms hit, with their focus being on the progress of ~~operations~~the storms (and where they might hit) and not on normal living, ~~entered~~including ~~into~~casual adining. ~~long-term~~It ~~program~~is not ~~with~~possible ato ~~loyalty~~measure the full impact of the hurricanes and their effect on customers who were ~~rewards~~preparing ~~company~~for ~~that~~storms, restoring damaged property and recovering financially from storm related costs. However, in total, we ~~believe~~lost ~~will~~an ~~help~~aggregate of 192 days of restaurant sales due to ~~market~~restaurant closures ~~our~~resulting ~~restaurants~~from the hurricanes during the thirteen weeks ended October 24, ~~taken~~2004. The ~~steps~~total todecline ~~reduce~~in sales from the prior year for those days impacted by the hurricanes was approximately $1.3 million. Also, as a result of the hurricanes, we incurred losses including property damage, lost profits from restaurant closures, lost food product, and additional expense regarding cleanup and other items. We filed insurance claims under our property insurance policy for these losses. In July 2005, we received $0.6 million in full settlement of these insurance claims. These receipts have been reported in total revenues in the amount of $0.4 million and as a reduction of property and equipment in the amount of $0.2 million during the fifty-two weeks ended April 24, 2005 and as accounts receivable in the Consolidated Balance Sheet as of April 24, 2005.

30OVERVIEW

~~Table~~ Our revenues are derived primarily from the sale of ~~Contents~~food and beverages. In each of the fiscal years ended April 24, 2005 and April 25, 2004, restaurant sales generated from lunch and dinner amounted to approximately 27% and 73% of restaurant sales, respectively. Restaurant sales of food and beverages accounted for approximately 91% and 9%, respectively, of total restaurant sales in fiscal year 2005, as

~~costs and attempted to pass a portion of the increased food costs on to our~~27 ~~customers, all in an effort to return our company to profitability.~~

Oncompared ~~August 6,~~to ~~2004,~~90% weand ~~closed a transaction with Sovereign Roadhouse LLC~~10%, ~~a wholly-owned subsidiary of Sovereign Investment Company~~respectively, ~~(“Sovereign”) involving~~in ~~the~~fiscal sale and leaseback of eleven restaurant properties that were previously owned. The sale price for the eleven properties was $21.8 million. The properties are being leased from Sovereign under lease agreements that extend for 20 years and include four five-year ~~renewal options~~2004. We ~~used~~Franchise ~~approximately $18.1 million of the net proceeds from the sale to pay expenses related to the transaction~~ and tomanagement ~~repay approximately $24.6 million of secured~~fees ~~debt,~~during which was repaid at a discount (resulting in a gain on extinguishment of debt of approximately $7.1 million). The net gain from the debt repayment will be reflected in our consolidated financial statements in the second quarter of fiscal 2005. ~~The~~and ~~Company~~2004 ~~also~~accounted ~~realized~~for aless ~~gain~~than ~~on the sale of the properties of approximately $~~1~~.7 million,~~% ~~which will be recorded as a reduction~~ of occupancy and other expense over the life of the leases. The remaining net proceeds from the sale of approximately $3.7 million will be used for working capital, including new marketing initiatives to promote our ~~existing restaurants~~revenues.

~~OVERVIEW~~ Restaurant operating expenses include food and beverage, labor, direct operating and occupancy costs. Direct operating costs consist primarily of costs of expendable supplies, marketing and advertising expense, maintenance, utilities and restaurant general and administrative expenses. Occupancy costs include rent, real estate and personal property taxes and property insurance. Certain elements of our restaurant operating expenses, including direct operating and occupancy costs and to a lesser extent labor costs, are relatively fixed.

~~Our revenues~~ Of ~~are~~our ~~derived~~67 ~~primarily~~currently ~~from~~operating ~~the~~Company-owned ~~sale~~restaurants, ofone ~~food~~was ~~and~~opened ~~beverages~~in June 2003. InFurther, ~~fiscal~~we ~~year~~closed ~~2004,~~one restaurant ~~sales~~in ~~generated~~July 2003 ~~from~~in ~~lunch~~conjunction ~~and~~with ~~dinner~~the ~~amounted to~~sale ~~approximately 27% and 73%~~ of ~~restaurant~~the ~~sales, respectively, as compared to~~related ~~26%~~leasehold and ~~74%,~~we ~~respectively,~~sold ina ~~fiscal~~second ~~year~~restaurant ~~2003~~in April 2004. ~~Restaurant~~Two ~~sales~~additional ofrestaurants ~~food~~were ~~and~~closed ~~beverages~~in ~~accounted~~March ~~for approximately 90%~~ and ~~10%,~~July 2005 ~~respectively,~~upon ofexpiration ~~total restaurant~~or ~~sales~~termination ~~in each~~ of ~~fiscal~~the ~~years~~related ~~2004 and 2003~~leases. ~~Franchise~~No ~~and~~additional ~~management~~Company-owned ~~fees~~restaurants ~~during~~are ~~fiscal~~currently ~~2004~~expected ~~and~~to ~~2003~~be ~~accounted~~opened ~~for~~in ~~less~~fiscal ~~than~~year ~~1% of our total revenues~~2006.

~~Restaurant~~CRITICAL ~~operating~~ACCOUNTING ~~expenses include food and beverage, labor, direct~~POLICIES operating and occupancy costs. Direct operating costs consist primarily of costs of expendable supplies, marketing and advertising expense, maintenance, utilities and restaurant general and administrative expenses. Occupancy costs include rent, real estate and personal property taxes and property insurance. Certain elements of our restaurant operating expenses, including direct operating and occupancy costs and to a lesser extent labor costs, are relatively fixed.

Of Our ~~our~~accounting 69policies ~~currently~~are ~~operating~~more ~~company-owned~~fully ~~restaurants,~~described ~~one~~in ~~was~~Note ~~opened~~3 inof the Notes to Consolidated ~~June 2003~~Financial Statements. ~~Further,~~As wedisclosed ~~closed~~therein, ~~one~~the ~~restaurant~~preparation as of ~~July 27,~~financial ~~2003~~statements in ~~conjunction~~ conformity with accounting principles generally accepted in the ~~sale~~United States of America requires management to make estimates and assumptions about future events that affect the ~~related~~amounts ~~leasehold~~reported in the financial statements and weaccompanying ~~sold~~notes. aFuture ~~second~~events ~~restaurant~~and their effects cannot be determined inwith ~~April 2004~~absolute certainty. NoTherefore, ~~additional~~the ~~company-owned~~determination ~~restaurants~~of ~~are~~estimates ~~currently~~requires ~~expected~~the exercise of tojudgment. Actual results inevitably will differ from those estimates, and such differences may be material ~~opened~~to the financial statements. Management believes the following critical accounting policies affect the significant judgments and estimates used in ~~fiscal~~the ~~year~~preparation ~~2005~~of our Consolidated Financial Statements.

~~The~~PROPERTY ~~average~~AND ~~cash investment of the 68 company-owned Roadhouse Grill~~EQUIPMENT restaurants open the entire 52 weeks in fiscal year 2004 was approximately $1.6 million, including building structures (where applicable), building or leasehold improvements and equipment and fixtures, but excluding land and pre-opening costs. The average land acquisition cost for the 11 restaurant sites operating and owned by us was approximately $0.9 million. The average annual occupancy cost for the restaurant sites leased by us is approximately $0.2 million.

31 We account for long-lived assets in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”. This statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We regularly review the performance of our individual restaurants to identify possible under performing operations that should be assessed for possible impairments of long-lived assets. In that regard, we recorded impairment charges during fiscal 2005, 2004 and 2003. See “Results of Operations” below. As part of this analysis, management considers factors that have in the past and may continue in the future to impact operating results. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future estimated net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

~~Table~~INTANGIBLE ~~of Contents~~ASSETS

~~CRITICAL~~ We ~~ACCOUNTING~~account ~~POLICIES~~for intangible assets in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets”. As of April 24, 2005, we had unamortized goodwill in the amount of $1.5 million and unamortized identifiable intangible assets in the amount of $0.3 million. In accordance with SFAS No. 142, goodwill, which relates to the prior acquisition of two individual restaurant operations, is subject to an

~~Our accounting policies are more fully described in Note 3~~28 of the Notes to Consolidated Financial Statements. As disclosed therein, the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements. Management believes the following critical accounting policies affect the significant judgments and estimates used in the preparation of our Consolidated Financial Statements.

Weannual ~~account~~impairment ~~for~~test ~~long-lived~~based ~~assets~~on inits ~~accordance~~fair ~~with~~value ~~SFAS~~and ~~No. 144, “Accounting~~no ~~for~~amortization ~~the Impairment or Disposal~~ of ~~Long-Lived~~goodwill ~~Assets”.~~is ~~This~~recorded. ~~statement~~As ~~requires~~of ~~that~~October 2004, ~~long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that~~ the ~~carrying~~date ~~amount~~on ofwhich ~~an asset~~we ~~may~~completed ~~not be recoverable. We regularly review the performance of~~ our ~~individual~~ ~~restaurants~~last toannual ~~identify~~goodwill ~~possible~~impairment ~~under~~test, ~~performing operations that~~we ~~should~~determined ~~be assessed for possible impairments of long-lived assets. In~~ that ~~regard,~~ we ~~recorded~~had no impairment ~~charges during fiscal 2004 and 2003. See “Results~~ of ~~Operations” below~~goodwill. AsWe ~~part~~will ~~of this analysis, management considers factors that have in the past and may~~ continue ~~in the future~~ to ~~impact~~assess ~~operating~~the ~~results.~~value ~~Recoverability~~ of ~~assets~~our togoodwill bein ~~held~~fiscal 2006 and ~~used is measured by a comparison of the carrying amount of an asset to the~~ future ~~net~~periods ~~cash~~in ~~flows~~accordance ~~expected~~with toapplicable beaccounting ~~generated by the asset~~rules. IfOther ~~such~~intangible assets ~~are considered to be impaired~~, ~~the impairment to be recognized is measured by the amount by~~ which ~~the~~have ~~carrying~~been ~~amount~~determined ~~of the assets exceeds fair value of the assets. Assets~~ to behave ~~disposed~~a offinite life, are ~~reported~~being atamortized ~~the lower of the~~over ~~carrying~~their ~~amount~~useful ~~or fair value less costs to sell~~lives.

~~INTANGIBLE~~USE ~~ASSETS~~OF ESTIMATES

We The ~~account~~preparation ~~for~~of ~~intangible~~the ~~assets~~Consolidated Financial Statements in ~~accordance~~conformity with ~~SFAS No. 142,~~accounting ~~“Goodwill~~principles ~~and~~generally ~~Other~~accepted ~~Intangible~~in ~~Assets”.~~the AsUnited States of ~~April 25,~~America ~~2004,~~requires wemanagement ~~had~~to make ~~unamortized~~estimates ~~goodwill~~and inassumptions that affect the ~~amount~~reported amounts of ~~$1.5 million~~assets and ~~unamortized~~liabilities ~~identifiable~~and ~~intangible~~disclosure of contingent assets inand liabilities at the ~~amount~~date of $0the financial statements and the reported amounts of revenues and expenses during the reporting period.~~3 million.~~ InActual ~~accordance~~results ~~with~~could differ ~~SFAS~~materially Nofrom those estimates. Amounts reported in our Consolidated Financial Statements ~~142,~~that ~~goodwill~~are based, ~~which~~in ~~relates~~part, toon the ~~prior~~use ~~acquisition~~ of ~~two~~estimates ~~individual~~include reserves relating to the collectibility ~~restaurant~~of ~~operations~~accounts receivable, isinsurance ~~subject~~reserves relating to anclaim ~~annual~~costs ~~impairment~~required ~~test~~to ~~based~~be onfunded ~~its~~by us, ~~fair~~the ~~value~~recoverability of deposits and noother ~~amortization~~prepaid ofitems, ~~goodwill~~estimated isaccrued ~~recorded.~~property Astaxes ofand ~~October 26,~~other ~~2003,~~accrued ~~the~~liabilities ~~date~~for on which weactual ~~completed~~invoices ~~our~~have ~~last~~not ~~annual~~yet ~~goodwill~~been ~~impairment~~received ~~test, we~~and ~~determined~~the ~~that~~liability wefor unredeemed ~~had~~gift nocertificates ~~impairment~~and ofgift ~~goodwill~~cards. WeVarious ~~will~~assumptions ~~continue~~and ~~to assess~~other ~~the~~factors ~~value~~underlie the determination of ~~our~~these ~~goodwill~~significant inestimates. ~~fiscal~~The ~~2005~~process ~~and~~of ~~future~~determining ~~periods~~significant inestimates is ~~accordance~~fact ~~with~~specific ~~applicable~~and ~~accounting~~takes ~~rules.~~into ~~Other~~account ~~intangible~~factors ~~assets~~such as historical experience, ~~which~~current and expected ~~have~~economic ~~been~~conditions, ~~determined~~product tomix, ~~have~~and ain ~~finite~~some ~~life~~cases, ~~are~~actuarial ~~being~~techniques. ~~amortized~~We ~~over~~constantly re-evaluate ~~their~~these significant factors and make adjustments to estimates where facts and ~~useful~~circumstances ~~lives~~dictate.

~~USE~~ We OFbelieve ~~ESTIMATES~~that the assumptions and other factors used to determine these estimates are reasonable and that, with the exception of insurance reserves relating to claim costs required to be funded by us, changes in these assumptions would not have a material impact on our financial position or results of operations. In regard to insurance reserves, recorded liabilities are based upon an estimate of the total amount that may be paid to settle claims required to be funded by us and incurred through the balance sheet date, including consideration of amounts paid-to-date in relation to the individual claims, an analysis of the loss development on all reported claims, potential legal or other related costs and any stop loss limits applicable under our insurance policies. Such reserves are subject to change based upon any development that occurs in relation to the outstanding claims subsequent to the preparation of the Consolidated Balance Sheet. As of April 24, 2005 and April 25, 2004, total recorded insurance reserves were $1.6 million and $1.8 million, respectively.

~~The~~ In ~~preparation~~addition, ofasset ~~the~~impairment ~~Consolidated~~charges, ~~Financial~~restructuring ~~Statements~~charges, inand ~~conformity~~the restructuring accrual ~~with~~are ~~accounting~~primarily ~~principles~~based ~~generally~~on ~~accepted~~estimates inof the ~~United~~market ~~States~~value of ~~America requires~~assets ~~management~~of towhich ~~make~~we ~~estimates~~plan ~~and~~to ~~assumptions~~dispose ~~that~~and ~~affect~~ the ~~reported~~ ~~amounts~~amount of ~~assets~~future ~~and~~cash ~~liabilities~~flows ~~and~~estimated ~~disclosure~~to ofbe ~~contingent~~realized relating to impaired assets ~~and~~that are ~~liabilities~~anticipated atto ~~the~~be ~~date~~utilized ofin ~~the~~our ~~financial~~operations ~~statements~~in ~~and~~ the ~~reported~~future ~~amounts~~or ~~of revenues~~expenditures ~~and~~estimated ~~expenses~~to ~~during~~be used to settle the ~~reporting~~outstanding ~~period~~obligations. ~~Actual~~Such ~~results~~estimates ~~could~~are ~~differ~~also affected by the time interval ~~materially~~required ~~from~~to ~~those~~dispose ~~estimates~~of assets to be sold. ~~Amounts~~The ~~reported~~assumptions used, particularly in ~~our~~regard ~~Consolidated~~to ~~Financial~~estimates ~~Statements~~of ~~that~~future ~~are~~cash ~~based~~flows to be realized relating to impaired or potentially impaired assets, are critical in ~~part~~assessing a potential impairment and, onif any, estimating the ~~use~~amount of ~~estimates~~the impairment. ~~include~~These assumptions require consideration and projection of future trends in key ~~reserves~~operating ~~relating~~ratios toand the ~~collectibility~~timing and impact of ~~accounts~~possible ~~receivable,~~changes ~~insurance reserves~~in operations relating to ~~claim~~specific assets. ~~costs~~Changes ~~required~~in tothese beassumptions ~~funded~~could byhave ~~us,~~a ~~the recoverability~~material ofimpact ~~deposits~~on ~~and~~the ~~other~~timing ~~prepaid~~and ~~items,~~amount ~~estimated~~of possible ~~accrued~~asset ~~property taxes~~impairments and ~~other~~therefore ~~accrued~~on our results of operations.

3229

~~liabilities~~RESULTS ~~for~~OF ~~which actual invoices have not yet been received and the~~OPERATIONS liability for unredeemed gift certificates and gift cards. Various assumptions and other factors underlie the determination of these significant estimates. The process of determining significant estimates is fact specific and takes into account factors such as historical experience, current and expected economic conditions, product mix, and in some cases, actuarial techniques. We constantly re-evaluate these significant factors and make adjustments to estimates where facts and circumstances dictate.

We The ~~believe~~following ~~that~~table ~~the~~sets ~~assumptions~~forth ~~and~~for ~~other factors used to determine these estimates are reasonable and that, with~~ the ~~exception~~periods ofindicated insurance reserves relating to claim costs required to be funded by us, changes in these assumptions would not have a material impact on our financial position or results of operations. In regard to insurance reserves, recorded liabilities are based upon an estimate of the ~~total~~percentage ~~amount~~relationship ~~that may be paid~~ to ~~settle~~total ~~claims~~revenues ~~required to be funded by us and incurred through the balance sheet date, including consideration~~ of ~~amounts~~certain ~~paid-to-date~~statements ~~in relation to the individual claims, an analysis~~ of ~~the~~operations ~~loss development on all reported claims, potential legal or other related costs and any stop loss limits applicable under our insurance policies~~data. ~~Such reserves are subject to change based upon any~~ development that occurs in relation to the outstanding claims subsequent to the preparation of the Consolidated Balance Sheet. As of April 25, 2004 and April 27, 2003, total recorded insurance reserves were $1.8 million and $2.0 million, respectively.

InSTATEMENTS ~~addition,~~OF ~~asset~~OPERATIONS ~~impairment charges, restructuring charges, and the~~DATA: restructuring accrual are primarily based on estimates of the market value of assets of which we plan to dispose and the amount of future cash flows estimated to be realized relating to impaired assets that are anticipated to be utilized in our operations in the future or expenditures estimated to be used to settle the outstanding obligations. Such estimates are also affected by the time interval required to dispose of assets to be sold. The assumptions used, particularly in regard to estimates of future cash flows to be realized relating to impaired or potentially impaired assets, are critical in assessing a potential impairment and, if any, estimating the amount of the impairment. These assumptions require consideration and projection of future trends in key operating ratios and the timing and impact of possible changes in operations relating to specific assets. Changes in these assumptions could have a material impact on the timing and amount of possible asset impairments and therefore on our results of operations.


	Fiscal			Fiscal			Fiscal
	2005			2004			2003
Total revenues		100.0	%		100.0	%		100.0	%
Cost of restaurant sales:
Food and beverage		35.7			35.4			33.7
Labor and benefits		32.4			32.3			34.0
Occupancy and other		26.2			24.0			24.5
Pre-opening expenses		—			0.1			—

Total cost of restaurant sales		94.3			91.8			92.2

Depreciation and amortization		4.8			5.1			5.3
General and administrative expenses		5.2			4.7			5.0
Asset impairment		1.4			0.7			4.2
Restructuring charge		—			(0.1	)		—
Reorganization expenses		—			—			1.9

Total operating expenses		105.7			102.2			108.6

Operating loss		(5.7	)		(2.2	)		(8.6	)

Other income (expense):
(Loss) gain on sale/disposal of fixed assets		(0.4	)		0.2			—
Gain on extinguishment of debt		5.5			—			—
Interest expense, net		(1.2	)		(2.3	)		(1.6	)

Total other income (expense)		3.9			(2.1	)		(1.6	)

Loss before taxes and extraordinary gain		(1.8	)		(4.3	)		(10.2	)

Income tax expense (benefit)		0.1			—			(0.9	)

Loss before extraordinary gain		(1.9	)		(4.3	)		(9.3	)

Extraordinary gain		—			—			1.3

Net loss		(1.9	)%		(4.3	)%		(8.0	)%

~~Table of Contents~~30

~~The~~RESTAURANT ~~following table sets forth for the periods indicated the percentage~~DATA: ~~relationship to total revenues of certain statements of operations data.~~

STATEMENTS OF OPERATIONS DATA:


	Fiscal			Fiscal			Fiscal
	2005			2004			2003
Company-owned restaurants:
Beginning of period		69			70			73
Opened		—			1			1
Closed		(1	)		(2	)		(4	)

End of period		68			69			70


Franchised and licensed restaurants:
Beginning of period		11			9			8
Opened		1			2			3
Closed		—			—			(2	)

End of period		12			11			9


Total restaurants:
Beginning of period		80			79			81
Opened		1			3			4
Closed		(1	)		(2	)		(6	)

End of period		80			80			79

	Fiscal			Fiscal			Fiscal
	2004			2003			2002
Total revenues		100.0	%		100.0	%		100.0	%
Cost of restaurant sales:
Food and beverage		35.4			33.7			34.6
Labor and benefits		32.3			34.0			32.6
Occupancy and other		24.0			24.5			23.7
Pre-opening expenses		0.1			—			0.3
Total cost of restaurant sales		91.8			92.2			91.2
Depreciation and amortization		5.1			5.3			5.7
General and administrative expenses		4.7			5.0			5.7
Asset impairment		0.7			4.2			4.7
Restructuring charge		(0.1	)		—			3.2
Reorganization expenses		—			1.9			0.6
Total operating expenses		102.2			108.6			111.1
Operating loss		(2.2	)		(8.6	)		(11.1	)
Total other expense		(2.1	)		(1.6	)		(2.4	)
Loss before taxes and extraordinary gain		(4.3	)		(10.2	)		(13.5	)
Income tax (benefit) expense		—			(0.9	)		—
Loss before extraordinary gain		(4.3	)		(9.3	)		(13.5	)
Extraordinary gain		—			1.3			—
Net loss		(4.3	)%		(8.0	)%		(13.5	)%

FIFTY-TWO WEEKS ENDED APRIL 24, 2005 (“FISCAL YEAR 2005”) COMPARED TO THE FIFTY-TWO WEEKS ENDED APRIL 25, 2004 (“FISCAL YEAR 2004”)

34 Total revenues. Total revenues decreased $10.2 million, or 7.3%, from $139.4 million for Fiscal Year 2004 to $129.2 million for Fiscal Year 2005. This decrease is primarily attributable to the lost revenues resulting from the hurricanes (estimated to be approximately $1.3 million less $0.4 million reimbursed by insurance), a reduction in sales generally at comparable restaurants (including sales indirectly lost due to the impact of the hurricanes on customer dining habits during the six weeks over which the four storms occurred) and the closing of three restaurants in July 2003, April 2004 and March 2005 as a result of the sale of the related property interests or expiration of the related lease. For the same reasons, sales at comparable restaurants for Fiscal Year 2005 decreased 5.8% compared with sales for Fiscal Year 2004. Removing the estimated impact of the hurricanes, same restaurant sales for Fiscal Year 2005 were 4.9% below those for Fiscal Year 2004. This decrease results from a reduction in customer headcount, partially offset by an increase in check average resulting from the menu price changes implemented in October 2003 and May 2004 as discussed below. Management believes that the decrease in headcount is attributable to intense competition from new and existing restaurants in many of the markets in which our restaurants operate, the impact of the hurricanes and the impact of our financial condition and lack of working capital on our ability to invest in our restaurants and engage in necessary marketing initiatives. Sales from restaurants closed in Fiscal Year 2004 or 2005 were $0.9 million in Fiscal Year 2005 compared to $2.7 million in Fiscal 2004.

~~Table~~ In March 2005, we introduced a new, updated main menu into our restaurants, which included both the introduction of ~~Contents~~selected new menu offerings as well as the elimination of certain items from the

~~RESTAURANT DATA:~~31

	Fiscal			Fiscal			Fiscal
	2004			2003			2002
Company-owned restaurants:
Beginning of period		70			73			83
Opened		1			1			3
Closed		(2	)		(4	)		(13	)
End of period		69			70			73
Franchised and licensed restaurants:
Beginning of period		9			8			7
Opened		2			3			1
Closed		—			(2	)		—
End of period		11			9			8
Total restaurants:
Beginning of period		79			81			90
Opened		3			4			4
Closed		(2	)		(6	)		(13	)
End of period		80			79			81

~~FIFTY-TWO~~previous ~~WEEKS~~menu ~~ENDED~~that ~~APRIL~~did ~~25,~~not ~~2004~~generate ~~(“FISCAL~~sufficient ~~YEAR~~sales ~~2004”)~~volume. ~~COMPARED~~The TOmenu ~~THE~~also included a price ~~FIFTY-TWO~~increase ~~WEEKS~~of ~~ENDED~~approximately ~~APRIL~~2% ~~27,~~based ~~2003~~on ~~(“FISCAL~~the ~~YEAR~~current ~~2003”)~~sales mix and a change in menu offerings and plate presentations that is expected to result in a reduction in food costs.

~~Total~~ Food ~~revenues~~and beverage. ~~Total~~Food ~~revenues~~and beverage costs decreased $13.52 million, or 16.15%, ~~from~~ to $~~140~~46.91 million for ~~fiscal~~Fiscal ~~year~~Year ~~2003~~2005 tofrom $~~139~~49.43 million for ~~fiscal~~Fiscal ~~year~~Year 2004. As a percentage of revenues, food ~~This~~and ~~decrease~~beverage iscosts ~~primarily~~increased ~~attributable~~by 0.3% to a35.7% ~~reduction~~for inFiscal ~~sales~~Year at2005 ~~comparable restaurants,~~from ~~offset~~35.4% tofor ~~some~~Fiscal ~~extent~~Year 2004. byThe ~~the~~decrease ~~opening~~in ofdollars ~~two~~is ~~new~~attributable ~~restaurants~~to the reduction in ~~April~~ ~~and~~revenues. ~~June 2003~~The ~~and~~increase ~~the~~as ~~closing~~a percentage of ~~two~~revenues ~~restaurants~~is primarily attributable to increases in ~~July 2003~~beef and ~~April 2004~~produce prices. During asOctober 2003, ain ~~result~~response ofto the ~~sale~~continued ofincreased ~~the~~beef ~~related~~prices, ~~property~~we ~~interests.~~modified ~~Sales~~our atmenu ~~comparable~~pricing on ~~restaurants~~certain ~~for~~items. ~~fiscal~~This ~~2004~~increase ~~decreased~~averaged ~~2.9~~approximately 3% ~~compared~~based ~~with~~on the sales ~~for~~mix at the ~~corresponding~~ ~~prior~~time ~~year~~of ~~period~~the increase. ~~This~~We ~~decrease~~also ~~results~~implemented ~~from~~changes ~~a reduction~~ in ~~customer~~ ~~headcount~~our menu, ~~partially~~including ~~offset~~price bychanges anon ~~increase~~certain items, in May 2004 ~~check~~that ~~average~~represented ~~resulting from~~an ~~the~~additional ~~menu~~average price ~~changes~~increase ~~implemented~~of inapproximately ~~June~~3% ~~and~~based ~~October 2003~~on ~~as discussed~~the ~~below.~~sales ~~Management~~mix ~~believes~~at ~~that~~the time of the ~~decrease~~increase. inIn ~~headcount~~addition, iswe ~~primarily attributable~~attempted to ~~competition~~reduce ~~from~~our ~~new~~overall ~~restaurants~~food incosts by ~~certain~~featuring oflower ~~the~~food ~~markets~~cost, ~~in which~~generally ~~our~~non-beef, ~~restaurants~~menu ~~operate,~~items in our ~~financial~~advertising ~~condition~~materials and through ~~the~~commitments ~~impact~~to ofpurchase ~~our financial~~meat ~~condition~~products onat ~~our~~fixed ~~ability~~prices ~~to invest~~ in ~~our~~certain ~~restaurants~~instances ~~and~~in ~~engage~~which inmarket ~~expanded~~conditions ~~marketing~~appeared ~~initiatives,~~to ~~and~~indicate ~~the~~an ~~general~~expected ~~state~~rise ofin ~~the~~prices. ~~economy~~Management ~~and~~cannot ~~its impact~~project on the ~~casual~~period over ~~full~~which ~~service~~the ~~dining~~existing ~~industry~~prices ~~and~~will ~~the~~continue ~~restaurant~~to ~~industry generally.~~exist Aand ~~restaurant~~when isor ~~considered~~if ~~comparable~~food ~~after~~costs ~~its~~will ~~first~~decline ~~18 months~~(as ofa ~~operation.~~percentage ~~Sales~~of ~~from~~revenues) to the ~~two~~historic ~~restaurants~~levels ~~opened~~that inpreviously ~~April~~existed. ~~and~~However, ~~June 2003~~although there ~~totaled~~can ~~$3.5 million~~be ~~during~~no ~~fiscal~~assurances, ~~year~~we ~~2004,~~will ~~compared~~continue to ~~$0.1 million~~evaluate ~~in fiscal~~and ~~year~~implement ~~2003.~~changes ~~Sales~~designed ~~from~~to ~~restaurants~~reduce ~~closed~~food costs including changes described above in ~~fiscal~~relation ~~years~~to ~~2004~~the ~~and~~new ~~2003 were~~menu ~~$1.4 million~~implemented in ~~fiscal~~March 2005 ~~year~~that are ~~2004,~~expected ~~compared~~ to ~~$2.8 million~~result in ~~fiscal~~a ~~year 2003~~decrease in food costs.

35 Labor and benefits. Labor and benefits costs decreased $3.3 million, or 7.3%, to $41.8 million for Fiscal Year 2005 from $45.1 million for Fiscal Year 2004. As a percentage of revenues, labor and benefits costs increased 0.1% to 32.4% for Fiscal Year 2005 from 32.3% for Fiscal Year 2004. The increase as a percentage of revenues is due to the impact of the decline in revenues and the fixed nature of a significant portion of our labor and benefits, partially offset by a reduction in workers’ compensation and group health insurance expense.

~~Table~~ Occupancy and other. Occupancy and other costs increased $0.5 million, or 1.5%, to $34.0 million for Fiscal Year 2005 from $33.5 million for Fiscal Year 2004. As a percentage of revenues, ~~Contents~~occupancy and other was 26.2% for Fiscal Year 2005 compared to 24.0% for Fiscal Year 2004. The increase, both in dollars and as a percentage of revenues, is primarily attributable to increased rent as a result of the August 2004 sale/leaseback of 11 properties, offset to some extent by reductions in marketing expense and equipment rental expense resulting from the expiration of certain equipment leases. The increase as a percentage of revenues is further impacted by the relatively fixed nature of certain occupancy and other costs, including rent and property taxes, compared to reduced revenues.

~~Food~~ Depreciation and ~~beverage~~amortization. ~~Food~~Depreciation and ~~beverage~~amortization ~~costs~~expense ~~increased~~decreased $10.9 million, or 4or 12.07%, to $496.32 million for ~~fiscal~~Fiscal ~~year~~Year ~~2004~~2005 from $477.41 million for ~~fiscal~~Fiscal ~~year 2003~~Year 2004. As a percentage of revenues, ~~food~~depreciation and ~~beverage~~amortization ~~costs~~expense ~~increased~~decreased ~~by 1~~0.73% to ~~35.~~4.8%, from 335.71% during ~~the~~these ~~prior period~~periods. ~~These~~The ~~increases~~decrease, ~~are~~both ~~primarily attributable to the significant increases~~ in ~~beef,~~dollars ~~dairy~~ and ~~produce prices~~ as ~~well~~ asa ~~the~~percentage ~~impact~~ of ~~the new menu (introduced in June 2003) on produce and other food costs. The increase in meat and dairy costs~~revenues, ~~that~~is ~~began~~due ~~in March 2003 and was further negatively impacted by the Mad Cow Disease scare which closed the Canadian border from exporting any beef products, has continued~~ to ~~have a significant adverse impact on food costs. During October 2003, in response to the continued increased beef prices, we modified our menu pricing on~~ certain ~~items.~~equipment ~~This~~becoming ~~increase~~fully ~~averaged~~depreciated ~~approximately~~during ~~3% based on~~ the ~~current sales mix at the time of the increase. We also implemented changes in our menu~~period, ~~including price changes on certain items, in May 2004 that represented an average price increase of approximately 3% based on~~ the ~~current~~sale ~~sales~~and ~~mix~~leaseback ~~at the time~~ of the ~~increase. In addition, we attempted to reduce our overall food~~11 ~~costs~~properties bydescribed ~~featuring~~above ~~lower food cost, generally non-beef, menu items in our advertising materials~~ and ~~through~~asset ~~commitments~~impairments torecorded ~~purchase meat products at fixed prices~~ in ~~certain~~fiscal ~~instances~~years in2004 ~~which~~and ~~market~~2005 ~~conditions appeared to~~that ~~indicate~~reduced ~~an expected rise in prices. Management can not project~~ the ~~period over~~carrying ~~which~~value ~~the~~of ~~existing~~our ~~prices~~property ~~will continue to exist~~ and ~~when~~equipment, oroffset ~~if food costs will decline (as a percentage of revenues)~~ to ~~the~~some ~~historic~~extent ~~levels~~by ~~that~~depreciation ~~previously existed. However, although~~of ~~there~~additional ~~can~~assets ~~be no assurances, we will continue to evaluate and implement changes designed to reduce food costs~~purchased.

~~Labor~~ General and ~~benefits~~administrative. ~~Labor~~General and ~~benefits~~administrative costs ~~for~~increased ~~fiscal year 2004 decreased~~ $20.83 million, or 54.86%, to $456.18 million for ~~fiscal~~Fiscal ~~year~~Year ~~2004~~2005 from $476.95 million for ~~fiscal~~Fiscal ~~year 2003.~~Year ~~As a percentage of revenues, labor and benefits costs for fiscal year~~ 2004 ~~decreased 1~~.7% ~~to 32.3%,~~The ~~from 34.0% during the prior period. This decrease, both in dollars and as~~increase ~~a percentage of revenues,~~ is ~~due~~ primarily attributable to aincreased ~~reduction~~rent in(as ~~direct labor cost,~~ a ~~decrease~~result inof ~~group~~the ~~health~~sale ~~insurance~~and ~~resulting~~leaseback ~~from~~of ~~modifications to our~~the ~~medical~~corporate ~~benefit~~headquarters ~~plan~~building ~~implemented~~ in ~~June 2003, and a decrease in workers’~~ ~~compensation insurance costs.~~

~~Occupancy and other. Occupancy and other costs decreased $1.1 million, or~~32 3.2%, to $33.5 million for fiscal year 2004 from $34.6 million for fiscal year 2003. As a percentage of revenues, occupancy and other expense was 24.0% for fiscal year 2004, compared to 24.5% for fiscal year 2003. The decrease, both in dollars and as a percentage of revenues, is attributable to a decrease in equipment rental expense resulting from the expiration of certain operating leases and a reduction in repair and maintenance and marketing expenses incurred, partially offset by an increase in utility expense resulting from increased fuel costs. Marketing expense for fiscal year 2004 was $3.3 million, compared to $3.4 million for fiscal year 2003. Excluding the advertising expense related to the new program implemented in June 2003 with the loyalty and rewards company (see Note 19 to the Consolidated Financial Statements), marketing expense was $2.1 million in fiscal year 2004. See “Outlook” below for a discussion of future occupancy costs as a result of the recently completed sale/leaseback of 11 properties.

~~Depreciation~~December 2003), ~~and~~bank ~~amortization.~~fees ~~Depreciation~~ and ~~amortization~~salaries ~~expense decreased~~for ~~$0.4 million,~~additional orfield ~~5.3%~~management personnel, offset to some ~~$7.1 million~~extent ~~for~~by ~~fiscal~~a ~~year~~reduction ~~2004~~in ~~from~~group ~~$7.5 million~~health ~~for fiscal year 2003~~insurance. As a percentage of revenues, ~~depreciation~~general and ~~amortization~~administrative ~~expense~~costs ~~decreased~~increased 0.25% tofrom 54.17% ~~from~~for Fiscal Year 2004 to 5.32% ~~during~~for ~~these~~Fiscal ~~periods~~Year 2005. The ~~decrease,~~increase ~~both in dollars and~~ as a percentage of revenues, is ~~due~~also to the ~~fact~~ ~~that depreciation expense was discontinued on idle facilities and equipment as a~~ result of ~~closing~~the ~~restaurants~~relatively ~~(including~~fixed ~~leases~~nature ~~rejected~~of general inand ~~our bankruptcy~~administrative ~~proceedings),~~costs ~~due~~compared to ~~the~~reduced ~~fact that certain equipment became fully~~revenues. ~~depreciated during the~~

36 Asset impairment. Asset impairment charges totaling $1.8 million, or 1.4% of revenues, were recorded for Fiscal Year 2005 relating to equipment at restaurants that have previously been recognized as impaired and four other restaurants that were not performing as expected, one of which we intend to close upon the expiration of the lease in 2006. We recorded asset impairment charges during Fiscal Year 2004 totaling $1.0 million, or 0.7% of revenues, relating to three restaurants that were not performing as expected and other restaurants for which impairment charges had previously been recognized.

~~Table~~ (Loss) gain on sale/disposal of ~~Contents~~fixed assets. During Fiscal Year 2005, we recognized a loss of $0.5 million of which $0.4 million was to reduce the carrying value of an asset held for sale to the net proceeds expected to be received from the sale of the asset. During Fiscal Year 2004, we realized a gain on the sale of fixed assets of $0.3 million, which primarily relates to the sale of a property in April 2004.

~~period~~ Gain ~~and~~on ~~because~~extinguishment of ~~asset~~debt. ~~impairment~~During ~~charges~~Fiscal ~~which~~Year ~~were~~2005, ~~taken~~we inrecognized ~~fiscal year~~a ~~2003~~$7.1 million ~~that~~gain relating ~~reduced~~to the ~~carrying~~repayment ~~value~~of debt at a discount as a result of ~~our~~the ~~property~~sale/leaseback ~~and~~of ~~equipment~~11 properties. See further discussion above.

~~General~~ Interest ~~and~~expense, ~~administrative~~net. ~~General~~Total ~~and~~interest ~~administrative~~expense ~~costs~~ decreased $01.57 million, or 753.1%, to $61.5 million for ~~the~~Fiscal ~~fifty-two~~Year ~~weeks~~2005 ~~ended~~from ~~April 25, 2004, compared to~~ $73.02 million for ~~the~~Fiscal ~~fifty-two~~Year ~~weeks ended April 27, 2003~~2004. As ~~a percentage of revenues, general and administrative costs decreased 0.3% from 5.0% to 4.7% during these periods.~~ The decrease, ~~both~~was ~~in dollars and as a~~primarily ~~percentage~~due ofto ~~revenues, is~~ the ~~result~~reduction ~~of reductions~~ in ~~corporate~~outstanding ~~overhead~~debt ~~and~~resulting ~~a decrease~~from indebt ~~legal~~payments ~~and~~made ~~professional~~between ~~fees~~these ~~incurred~~periods, ~~offset to some extent by an~~ ~~increase~~including inthe ~~training~~early ~~expense,~~payment ~~which is a result~~ of ~~our~~debt ~~increased~~from ~~emphasis~~the ~~on hiring~~proceeds ~~and~~of ~~continuing to train high quality restaurant managers and an increase in rent expense resulting from~~ the August 2004 sale/leaseback ~~transaction executed in~~ ~~December 2003 relating to our corporate headquarters building~~transaction.

~~Reorganization~~ Income ~~expenses~~taxes. ~~Reorganization~~Total ~~expenses~~income ~~represent~~tax ~~expenses incurred~~expense ~~relating~~for toFiscal ~~our~~Year ~~bankruptcy~~2005 ~~proceedings~~was $0.1 million and ~~reorganization~~was ~~under~~related ~~Chapter 11~~to ~~and~~federal ~~primarily~~alternative ~~are~~minimum ~~comprised~~tax ofas ~~legal,~~well ~~professional~~as state and ~~consulting services~~local taxes. ~~Total~~We ~~reorganization~~did ~~expenses~~not ~~incurred~~recognize ~~during~~a tax benefit relating to the operating losses for fiscal ~~year~~years ~~2003~~2005 ~~were~~or 2004 because management does not ~~$2.7 million,~~believe orthat ~~1.9%~~it ofis ~~revenues.~~more Nolikely ~~reorganization~~than ~~expense~~not ~~was~~that ~~incurred during~~our ~~fiscal~~deferred ~~year~~tax ~~2004~~assets will be realized in the future.

~~Asset~~FIFTY-TWO ~~impairment~~WEEKS ~~and~~ENDED ~~restructuring~~APRIL ~~charge.~~25, We2004 ~~recorded~~(“FISCAL ~~asset~~YEAR ~~impairment charges during fiscal year~~ 2004”) ~~totaling~~COMPARED ~~$1.0 million~~TO ~~relating~~THE toFIFTY-TWO ~~three restaurants~~WEEKS ~~that are not performing as expected and other restaurants for which~~ENDED ~~impairment~~APRIL ~~charges~~27, ~~had previously been recognized. We recorded asset impairment charges during fiscal year~~ 2003 ~~totaling~~(“FISCAL ~~$5.9 million~~YEAR ~~related to the~~2003”) 17 restaurants that were closed. During fiscal year 2004, we recorded a restructuring charge benefit of $0.1 million relating to a reduction in previously accrued restructuring charges resulting from the final settlement of a bankruptcy claim relating to a closed restaurant.

Total ~~other expense~~revenues. Total ~~other~~revenues ~~expense~~decreased ~~increased~~ $01.85 million, or 36 1.41%, from $140.9 million for Fiscal Year 2003 to $3139.04 million for Fiscal Year 2004. This decrease is primarily attributable to a reduction in sales at comparable restaurants, offset to some extent by the ~~fifty-~~opening of two ~~weeks~~new restaurants ~~ended~~in April and June ~~25,~~2003 and the closing of two restaurants in July 2003 and April 2004 as ~~from~~a $2result of the sale of the related property interests.2 Sales at comparable restaurants for ~~million~~fiscal 2004 decreased 2.9% compared with sales for the ~~fifty-two~~corresponding ~~weeks~~prior ~~ended~~year ~~April 27~~period. This decrease results from a reduction in customer headcount, ~~2003.~~partially ~~The~~offset by an increase ~~was~~in check ~~primarily~~average ~~due~~resulting tofrom the ~~forgiveness~~menu ofprice ~~interest~~changes ~~expense~~implemented ~~during~~in ~~the~~June ~~period~~and ofOctober 2003 as discussed ~~bankruptcy~~below. ~~Included~~Management believes that the decrease in ~~other~~headcount ~~expense~~is ~~for~~primarily attributable to competition from new restaurants in certain of the ~~fifty-two~~markets ~~weeks~~in ~~ended~~which ~~April 25~~our restaurants operate, our financial ~~2004~~condition isand athe ~~gain~~impact of our financial condition on our ability to invest in our restaurants and engage in expanded marketing initiatives, and the ~~sale~~general state of ~~fixed~~the ~~assets~~economy ofand ~~$0.3 million,~~its ~~which~~impact ~~primarily~~on ~~relates~~the tocasual full service dining industry and the ~~sale~~restaurant industry generally. A restaurant is considered comparable after its first 18 months of aoperation. ~~property~~Sales from the two restaurants opened in April and June 2003 totaled $3.5 million during Fiscal Year 2004, compared to $0.1 million in Fiscal Year 2003. Sales

~~Income tax benefit. For fiscal year 2003, we recorded a net income tax~~33 benefit of $1.2 million relating to an expected federal income tax refund. We did not recognize a tax benefit relating to the operating loss for either fiscal year 2004 or 2003 because management believes that it is not likely that all of our deferred tax assets will be realized in the future.

~~FIFTY-TWO~~from ~~WEEKS~~restaurants ~~ENDED~~closed ~~APRIL~~in ~~27,~~fiscal ~~2003~~years ~~(“FISCAL~~2004 ~~YEAR~~and 2003”) ~~COMPARED~~were TO$1.4 million ~~THE FIFTY-TWO~~in ~~WEEKS~~Fiscal ~~ENDED~~Year ~~APRIL 28~~2004, compared ~~2002~~to ~~(“FISCAL~~$2.8 million ~~YEAR~~in ~~2002”)~~Fiscal Year 2003.

~~Total~~ Food ~~revenues~~and beverage. ~~Total~~Food ~~revenues~~and ~~decreased~~beverage costs increased $~~18.~~1.9 million, or ~~11.~~4.0%, ~~from~~ to $~~159~~49.03 million for ~~fiscal~~Fiscal ~~year~~Year ~~2002~~2004 tofrom $~~140~~47.94 million for ~~fiscal~~Fiscal ~~year~~Year 2003. As a percentage of revenues, food ~~This~~and ~~decrease~~beverage iscosts increased by 1.7% to 35.4%, from 33.7% during the prior period. These increases are primarily attributable to the ~~closing~~significant ofincreases 13in ~~unprofitable~~beef, dairy and produce prices as well ~~restaurants~~as the impact of the new menu (introduced in ~~fiscal~~June 2003) ~~year~~on ~~2002~~produce and ~~four~~other ~~additional~~food ~~unprofitable~~costs. ~~restaurants~~The increase in meat and dairy costs, that began in March 2003 and was further negatively impacted by the ~~first~~Mad ~~quarter~~Cow ofDisease ~~fiscal~~scare ~~year~~which ~~2003.~~closed ~~Revenues~~the ~~generated~~Canadian border from ~~these~~exporting 17any beef products, has ~~restaurants~~continued ~~totaled~~to $0have a significant adverse impact on food costs. During October 2003, in response to the continued increased beef prices, we modified our menu pricing on certain items. This increase averaged approximately 3% based on the current sales mix at the time of the increase. We also implemented changes in our menu, including price changes on certain items, in May ~~million~~2004 that represented an average price increase of approximately 3% based on the current sales mix at the time of the increase. In addition, we attempted to reduce our overall food costs by featuring lower food cost, generally non-beef, menu items in our advertising materials and ~~$12~~through commitments to purchase meat products at fixed prices in certain instances in which market conditions appeared to indicate an expected rise in prices.~~1 million~~ Management can not project the period over which the existing prices will continue to exist and when or if food costs will decline (as a percentage of revenues) to the historic levels that previously existed. However, although there can be no assurances, we will continue to evaluate and implement changes designed to reduce food costs.

37 Labor and benefits. Labor and benefits costs decreased $2.8 million, or 5.8%, to $45.1 million for Fiscal Year 2004 from $47.9 million for Fiscal Year 2003. As a percentage of revenues, labor and benefits costs for Fiscal Year 2004 decreased 1.7% to 32.3%, from 34.0% during the prior period. This decrease, both in dollars and as a percentage of revenues, is due primarily to a reduction in direct labor cost, a decrease in group health insurance resulting from modifications to our medical benefit plan implemented in June 2003, and a decrease in workers’ compensation insurance costs.

~~Table~~ Occupancy and other. Occupancy and other costs decreased $1.1 million, or 3.2%, to $33.5 million for Fiscal Year 2004 from $34.6 million for Fiscal Year 2003. As a percentage of ~~Contents~~revenues, occupancy and other expense was 24.0% for Fiscal Year 2004, compared to 24.5% for Fiscal Year 2003. The decrease, both in dollars and as a percentage of revenues, is attributable to a decrease in equipment rental expense resulting from the expiration of certain operating leases and a reduction in repair and maintenance and marketing expenses incurred, partially offset by an increase in utility expense resulting from increased fuel costs. Marketing expense for Fiscal Year 2004 was $3.3 million, compared to $3.4 million for Fiscal Year 2003. Excluding the advertising expense related to the new program implemented in June 2003 with the loyalty and rewards company (see Note 20 to the Consolidated Financial Statements), marketing expense was $2.1 million in Fiscal Year 2004.

~~during~~ Pre-opening ~~fiscal year 2003 and 2002, respectively~~expenses. ~~Sales~~We atrecorded ~~comparable restaurants for fiscal year 2003 decreased 6.~~$0~~% compared with sales for fiscal year 2002~~.1 million ~~We believe that this decrease is partially attributable to the decline~~ in ~~the~~pre-opening ~~economy~~expenses ~~as well as to the impact of our Chapter 11 proceeding. A restaurant is considered comparable after its first 18 months of operation. We opened one new restaurant~~ during ~~the~~each ~~fourth quarter~~ of fiscal year ~~2002~~2004 and ~~one~~ ~~additional~~2003 ~~new~~relating ~~restaurant~~to ~~during~~ the ~~fourth~~opening ~~quarter~~ of ~~fiscal~~two ~~year~~new ~~2003. Combined revenues from these~~ restaurants, ~~which are not included~~ in ~~comparable restaurant~~April ~~sales, were $3.0 million~~ and ~~$0.5~~June ~~million during fiscal years~~ 2003 ~~and 2002, respectively~~.

~~Food~~ Depreciation and ~~beverage~~amortization. ~~Food~~Depreciation and ~~beverage~~amortization ~~costs~~expense decreased $70.74 million, or 14or 5.03%, to $477.41 million for ~~fiscal~~Fiscal ~~year~~Year ~~2003~~2004 from $557.15 million for ~~fiscal~~Fiscal ~~year 2002.~~Year ~~This decrease is primarily attributable to the restaurant closings described above~~2003. As a percentage of ~~sales~~revenues, ~~food~~depreciation and ~~beverage~~amortization ~~costs~~expense decreased by 0.92% to 335.71% ~~for fiscal year 2003~~ from 345.63% during ~~for~~these ~~fiscal year 2002~~periods. The decrease, both in dollars and as a percentage of ~~revenue~~revenues, ~~can~~is bedue ~~attributed~~ to ~~bulk purchasing~~the ~~agreements~~fact ~~including~~that ~~significantly~~depreciation ~~discounted~~expense ~~pork~~was ~~purchases~~discontinued ~~made~~on ~~when available~~idle ~~quantities~~facilities ~~exceeded~~and ~~normal~~equipment ~~demand~~as ~~and~~ a ~~reduction~~result of closing restaurants (including leases rejected in ~~chicken~~our ~~costs. Meat~~bankruptcy ~~costs~~proceedings), ~~which~~due ~~historically~~to ~~represent~~the ~~approximately~~fact ~~44%~~that certain ofequipment ~~total~~became ~~food~~fully ~~costs, remained~~depreciated ~~relatively~~during ~~constant~~the atperiod ~~approximately~~and ~~15.4%~~because of ~~total~~asset ~~food~~impairment charges ~~sales~~which were taken in ~~both fiscal~~Fiscal ~~years~~Year 2003 ~~and~~that ~~2002~~reduced the carrying value of our property and equipment.

Labor and benefits. Labor and benefits costs decreased $3.9 million, or 7.5%, to $47.9 million for fiscal year 2003 from $51.8 million for fiscal year 2002. The decrease is primarily due to the restaurant closings described above. As a percentage of sales, labor and benefits costs increased 1.4% to 34~~.0% for fiscal year 2003 from 32.6% for fiscal year 2002. This increase is~~ ~~due to the significant increase in workers compensation insurance and group medical insurance costs, which represented 2.9% of revenues in fiscal year 2003 as compared to 1.3% in fiscal year 2002.~~

~~Pre-opening~~ General ~~expenses~~and administrative. ~~Pre-opening~~General ~~expenses~~and administrative costs decreased $0.45 million, or 80 7.01%, to $6.5 million for Fiscal Year 2004 compared to $07.10 million infor ~~fiscal~~Fiscal ~~year~~Year 2003. ~~from~~As $a percentage of revenues, general and administrative costs decreased 0.3% from 5 ~~million~~.0% into ~~fiscal~~4.7% ~~year~~during ~~2002~~these periods. The decrease, isboth ~~due~~in todollars and as a percentage of revenues, is the ~~opening~~result of reductions ~~only~~in ~~one~~corporate ~~restaurant~~overhead and a decrease in ~~fiscal~~legal ~~year 2003~~and ~~compared~~professional fees incurred, offset to some ~~the~~extent ~~opening~~by an increase in training expense, which is a result of ~~three~~our ~~restaurants~~increased emphasis on hiring and continuing to train high quality restaurant managers and an increase in ~~fiscal~~rent ~~year~~expense resulting ~~2002~~from the sale/leaseback transaction executed in December 2003 relating to our corporate headquarters building.

~~Depreciation~~ Reorganization ~~and amortization~~expenses. ~~Depreciation~~Reorganization ~~and~~expenses ~~amortization~~represent ~~decreased $1.5 million,~~expenses orincurred ~~16.7%,~~relating to ~~$7.5 million~~our bankruptcy ~~for~~proceedings ~~fiscal~~and ~~year~~reorganization ~~2003~~under ~~from $9.0~~Chapter ~~million for~~11 ~~fiscal~~and ~~year~~primarily ~~2002.~~are Ascomprised ~~a percentage~~ of ~~revenues~~legal, professional ~~depreciation~~ and ~~amortization~~ ~~decreased~~consulting 0services.4% toTotal ~~5.3%~~reorganization ~~for~~expenses ~~fiscal~~incurred ~~year~~during Fiscal Year 2003 ~~from~~were 5$2.7% million, ~~for~~or ~~fiscal year 2002~~1.9% ~~The decrease, both in dollars and as a percentage~~ of revenues,. ~~is due~~No toreorganization ~~the fact that depreciation~~ expense was ~~discontinued~~incurred onduring ~~idle facilities~~Fiscal ~~and~~Year equipment as a result of closing restaurants (including leases rejected in our bankruptcy proceedings), due to equipment at some older restaurants becoming fully depreciated and due to asset impairment charges which were taken in 2002 and 2003 that reduced the carrying value of our property and equipment2004.

~~General~~ Asset impairment and ~~administrative~~restructuring charge. ~~General~~We ~~and~~recorded ~~administrative~~asset ~~costs~~impairment ~~decreased~~charges during Fiscal Year 2004 totaling $2.1.0 million, orrelating 23to three restaurants that are not performing as expected and other restaurants for which impairment charges had previously been recognized.~~1%,~~ toWe recorded asset impairment charges during Fiscal Year 2003 totaling $75.09 million ~~for~~related ~~fiscal~~to ~~year~~the ~~2003~~17 restaurants asthat ~~compared~~were toclosed. During Fiscal Year 2004, we recorded a restructuring charge benefit of $90.1 million ~~for~~relating ~~fiscal~~to ~~year~~a ~~2002.~~reduction Asin apreviously ~~percentage~~accrued ofrestructuring ~~sales,~~charges ~~general~~resulting ~~and~~from ~~administrative~~the ~~costs~~final ~~decreased~~settlement ~~0.7%~~of ~~from~~a ~~5.7%~~bankruptcy ~~for~~claim ~~fiscal~~relating ~~year~~to ~~2002~~a toclosed 5restaurant.~~0% for~~ ~~fiscal year~~

38 Total other expense. Total other expense increased $0.8 million, or 36.4%, to $3.0 million for Fiscal Year 2004 from $2.2 million for Fiscal Year 2003. The increase was primarily due to the forgiveness of interest expense during the period of bankruptcy. Included in other expense for Fiscal Year 2004 is a gain on the sale of fixed assets of $0.3 million, which primarily relates to the sale of a property in April 2004.

~~Table~~ Income tax benefit. For Fiscal Year 2003, we recorded a net income tax benefit of ~~Contents~~$1.2 million relating to an expected federal income tax refund. We did not recognize a tax benefit relating to the operating loss for either fiscal year 2004 or 2003 because management does not believe that it is more likely than not that our deferred tax assets will be realized in the future.

~~2003~~ Extraordinary gain. ~~The~~We ~~decrease,~~recognized ~~both~~an inextraordinary ~~dollars~~gain ~~and~~during asFiscal aYear ~~percentage~~2003 of ~~revenues, is~~$1.8 million relating to the ~~result~~forgiveness of ~~our~~debt ~~reduction~~resulting infrom ~~corporate~~the ~~overhead~~Chapter 11 ~~and~~reorganization. ~~the~~The ~~consolidation~~debt forgiveness is primarily comprised of obligations that were canceled as a result of the bankruptcy ~~field~~proceedings. ~~management~~No ~~personnel~~extraordinary gain was recorded during Fiscal Year 2004.

~~Reorganization expenses. Reorganization expenses represent expenses~~OUTLOOK incurred relating to our Chapter 11 reorganization proceeding and are primarily comprised of legal, professional and consulting services. Total reorganization expenses incurred in fiscal year 2003 were $2.7 million, or 1.9% of revenues, as compared to $0.9 million, or 0.6% of revenues, in fiscal year 2002.

~~Asset~~ The ~~impairment~~following ~~and~~discussion ~~restructuring~~of ~~charge.~~our Wefuture ~~recorded~~operating ~~asset~~results ~~impairment~~that are not historical statements ~~and~~constitute ~~restructuring~~forward-looking ~~charges~~statements inwithin ~~fiscal~~the ~~year~~meaning ~~2002~~of ~~totaling~~the ~~$7.5 million~~Private ~~and~~Securities ~~$5.1~~Litigation ~~million,~~Reform ~~respectively~~Act of 1995. ~~These~~Our ~~charges~~forward-looking ~~were~~statements ~~related~~are subject to ~~the~~risks 17and ~~restaurants~~uncertainties that ~~were~~could ~~closed~~cause asactual ~~described~~results ~~above.~~to ~~During~~differ ~~fiscal~~materially ~~year~~from ~~2003,~~those westated ~~recorded~~or animplied ~~asset impairment~~in ofthe $5forward-looking statement.~~9 million~~ ~~relating~~Please refer to ~~restaurants~~Pages ~~that~~3 ~~were~~and ~~not~~6 ~~performing~~of this Annual Report on Form 10-K, as well as to the ~~expected~~other disclosures contained in this Annual Report on Form 10-K, for further discussion on forward-looking statements and ~~fixtures~~the risks and ~~equipment~~other ~~owned~~factors orthat ~~relating~~could toprevent ~~capital~~us ~~leases~~from atachieving our ~~certain~~goals ofand cause the ~~closed~~assumptions ~~restaurants~~underlying the forward-looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements.

~~Total other expense. Total other expense decreased $1.7 million, or~~35 43.6%, to $2.2 million for fiscal year 2003 from $3.9 million for fiscal year 2002. The decrease was primarily due to the forgiveness of interest expense during the period of the Chapter 11 proceeding.

~~Extraordinary~~ Fiscal ~~gain~~2006 revenue. WeAs ~~recognized~~discussed anabove, ~~extraordinary~~no ~~gain~~new restaurants are currently being developed for fiscal 2006. All 67 of our restaurants will qualify as comparable restaurants during fiscal 2006. ~~year~~As ~~2003~~discussed above, fiscal 2005 revenues have been significantly adversely impacted by four hurricanes that occurred in certain of ~~$1.8 million~~the ~~relating~~markets toin which we operate, particularly the ~~forgiveness~~state of Florida. ~~debt~~Excluding ~~resulting~~the estimated effects of the hurricanes on fiscal 2005, sales from comparable ~~our~~restaurants ~~Chapter~~declined 4.9% during the fiscal year. Management intended to use a portion of the net proceeds received from the August 2004 sale/leaseback of 11 ~~reorganization~~properties to invest in additional marketing for its restaurants, in an effort to improve future revenues. ~~The~~However, the financial impact of the hurricanes as well as the continued decline in sales has required the Company to use these net proceeds, after debt ~~forgiveness~~payments, isfor ~~primarily~~working ~~comprised~~capital purposes. Following the sale/leaseback, management has developed and implemented certain programs including a new local restaurant marketing program, a modified incentive compensation program for its employees and changes in the hiring and training of restaurant employees. In addition, management developed a ~~obligations~~new menu insert that included the introduction of certain new menu items. Management has also developed a new kids’ menu and main menu with enhanced features and new menu items, which were introduced ~~canceled~~in our restaurants in February and March 2005, respectively. While management has seen certain improvements in its operations from these new programs including improved traffic in our restaurants, higher average checks, lower employee turnover and improved store execution, there can be no assurance as ato whether these changes will ultimately result ofin ~~the~~increased ~~bankruptcy~~sales ~~proceedings~~or profitability. Based on the above, management currently expects that the negative same restaurant sales trend it has experienced in recent years will improve and that total fiscal 2006 revenues may increase slightly over fiscal 2005.

~~OUTLOOK~~ Management believes that identifying opportunities to expand our operations in relation to franchised restaurants represents a growth opportunity and would require significantly lower capital resources from us than the expansion of Company-owned restaurants. However, these initiatives are not expected to generate significant revenue or operating profit during fiscal 2006. Accordingly, revenue anticipated to be generated from royalty fees and other income is expected to be less than 1% of total revenues in fiscal 2006.

~~The~~ Food ~~following~~and ~~discussion~~beverage ofcosts. ~~our~~Similar ~~future~~to ~~operating~~many ~~results~~competing ~~that~~restaurant ~~are~~concepts, ~~not~~we experienced a ~~historical~~significant ~~statements~~increase ~~constitute~~in ~~forward-looking~~food ~~statements~~and ~~within~~beverage ~~the~~costs ~~meaning~~during fiscal 2004, which continued into fiscal of2005. ~~the~~This ~~Private~~increase ~~Securities~~was ~~Litigation~~primarily ~~Reform~~caused ~~Act~~by the instances of ~~1995.~~Mad ~~Our~~Cow ~~forward-looking statements~~Disease ~~are~~that ~~subject~~were toreported ~~risks~~in Canada and ~~uncertainties~~the ~~that~~United ~~could~~States ~~cause~~in ~~actual results~~2003, towhich ~~differ~~has ~~materially~~had ~~from~~a ~~those~~significant ~~stated~~negative orimpact ~~implied~~on inmeat ~~the forward-looking~~and ~~statement~~dairy costs. ~~Please~~Management ~~refer~~has taken actions in an attempt to ~~Page~~reduce 4the impact of ~~this~~these ~~Annual~~events ~~Report on~~including ~~Form~~enhancing 10our menu, in part, to promote certain non-Kmeat menu items, asimplementing ~~well~~menu asprice increases, negotiating arrangements to ~~the~~purchase ~~other~~certain ~~disclosures~~meat ~~contained~~products at fixed rates during fiscal 2005 and targeting certain marketing initiatives in ~~this~~an ~~Annual~~attempt ~~Report~~to change our sales mix and increase onsales ~~Form~~of ~~10-K~~lower cost food items. In addition, ~~for~~in ~~further~~March 2005, ~~discussion~~we onintroduced ~~forward-looking~~a ~~statements~~new ~~and~~main ~~the~~menu into our ~~risks~~restaurants that included changes in menu offerings and ~~other~~plate ~~factors~~presentations that ~~could~~are ~~prevent~~expected usto result ~~from~~in ~~achieving~~a ~~our~~reduction ~~goals~~in ~~and~~food costs. Management is also continuing its initiatives to further ~~cause~~reduce ~~the~~food ~~assumptions~~costs ~~underlying~~as ~~the~~described ~~forward-looking~~above. ~~statements~~Management ~~and~~cannot predict the ~~actual~~duration of these cost ~~results~~increases toor ~~differ~~further ~~materially~~impacts ~~from~~that ~~those~~may ~~expressed~~occur inas ora ~~implied~~result of these events. However, it is presently anticipated that food and beverage costs for fiscal 2006 will decline by ~~those~~approximately 2% of ~~forward-looking~~revenues ~~statements~~as compared to fiscal 2005.

As Labor ofand ~~the~~benefits. ~~date~~We experienced a decrease in labor and benefits costs in fiscal 2004 as a percent of ~~this~~revenues ~~Annual~~as ~~Report~~compared onto ~~Form~~fiscal ~~10-K~~2003. This decrease resulted from improved management of hourly labor, a decrease in the ~~economy~~cost ~~has~~of ~~shown~~providing medical benefits to employees due to plan design ~~recent~~changes ~~signs~~implemented in June 2003 and a decrease in the cost of ~~strengthening,~~workers’ ~~however~~compensation ~~concerns~~insurance ~~still~~due to ~~exist~~a change to a guaranteed cost insurance program in January 2003 as compared to the ~~strength~~significant ofclaims ~~consumer~~incurred ~~spending~~in fiscal 2003 under the previous self funded program. However, due to the ~~economic~~decline in ~~downturn~~revenues ~~and~~during ~~world~~fiscal ~~events~~2005 ~~including terrorism~~as compared to fiscal 2004 and the ~~conflict~~generally infixed ~~the~~nature ~~Middle~~of ~~East.~~labor and ~~Our~~benefits, ~~revenue~~these ~~projections~~costs ~~assume that~~have ~~current~~increased ~~spending~~slightly ~~trends~~to do32.4% ~~not~~of ~~worsen~~revenues ~~during~~in fiscal 2005. ~~Actual~~from ~~results~~32.3% of revenues in fiscal ~~2005~~2004. ~~could~~This ~~vary~~increase ~~significantly~~has asbeen apartially ~~result~~offset ofby ~~changes~~further reductions in ~~consumer~~workers’ ~~spending~~compensation and ~~the~~group ~~economy~~health ininsurance ~~general~~expense. Management

~~Fiscal 2005 revenue. As discussed above, we opened one new restaurant in~~36 ~~April 2003 and an additional new restaurant in June 2003. No additional new restaurants are currently being developed for~~

~~Table~~currently expects labor and benefit costs as a percentage of ~~Contents~~revenues to increase approximately 1% of revenues in fiscal 2006 compared to fiscal 2005 due primarily to the impact of recent amendments to minimum wage regulations in certain of the states in which we operate (Florida and New York), changes in the compensation paid to restaurant employees and a slight increase in workers’ compensation insurance costs.

~~fiscal~~ Occupancy ~~2005~~and other. ~~The~~As ~~existing~~a 69result ~~company-owned~~primarily ~~restaurants~~of ~~will~~the ~~qualify~~sale ~~as comparable~~and ~~restaurants~~leaseback ~~during~~transaction ~~fiscal~~entered ~~2005.~~into in ~~Management~~August 2004 ~~currently~~as ~~believes~~discussed ~~that food~~above, ~~and~~we ~~beverage~~will ~~sales~~incur ~~for~~additional ~~its~~rent ~~comparable~~expense ~~stores~~in ~~for~~ fiscal ~~2005~~2006 ~~will increase~~of ~~slightly~~approximately ~~compared~~$1.0 million. toPartially ~~sales~~offsetting inthis ~~fiscal~~increase ~~2004.~~will ~~This~~be ~~anticipated~~reduced ~~improvement~~costs incurred as ~~compared~~a toresult of the ~~reduction~~expected inconversion ~~sales at comparable restaurants~~ of ~~2.9% experienced~~certain ~~between~~equipment ~~fiscal~~leases ~~2003~~from ~~and~~operating ~~fiscal~~leases ~~2004~~to ~~and 6.0% reduction experienced~~capital ~~between~~leases ~~fiscal 2002 and fiscal 2003 is projected based~~ upon the ~~improvements that~~expiration ~~have~~of ~~recently~~the ~~been~~original ~~implemented~~lease ~~that~~terms. ~~are~~Due ~~designed~~primarily to ~~improve~~these ~~the~~factors, ~~dining~~management ~~experience~~presently ofexpects ~~customers~~occupancy and ~~the~~other ~~consistency~~expenses in ~~operations,~~fiscal as2006 ~~well~~to asremain ~~the anticipated~~relatively ~~impact~~consistent ~~of contemplated marketing initiatives and the menu enhancement and price~~with ~~increase that was implemented in~~ fiscal ~~2004 and in May 2004~~2005.

~~Management~~ Pre-opening ~~intends~~expenses. toAs ~~continue~~discussed toabove, ~~focus~~no ~~efforts~~new onrestaurant ~~identifying opportunities~~openings ~~during~~are ~~fiscal~~currently ~~2005 to expand its operations in relation to~~planned ~~franchised~~for ~~restaurants~~fiscal 2006. WeAs ~~believe that this represents~~ a ~~growth~~result, ~~opportunity and would require significantly lower capital resources from us than expansion of company~~pre-~~owned~~opening ~~restaurants.~~expenses ~~This~~are ~~initiative is~~ not ~~expected to generate significant revenue or operating profit during fiscal 2005. Accordingly, revenue~~ anticipated to be ~~generated~~significant ~~from royalty fees and other income is expected to be less than 1% of total revenues~~ in fiscal ~~2005~~ 2006.

~~Food~~ Depreciation and ~~beverage costs~~amortization. ~~Similar~~Management tocurrently ~~many~~expects ~~competing~~that ~~restaurant~~total ~~concepts, we~~depreciation ~~have experienced a significant increase in food~~ and ~~beverage costs during~~ ~~fiscal~~amortization ~~2004.~~expense ~~This~~will ~~increase~~continue ~~was~~to ~~primarily~~decline ~~caused by the instances of Mad Cow Disease that were reported~~ in ~~Canada~~fiscal ~~and~~2006 ~~the~~as ~~United~~compared ~~States~~to infiscal ~~2003,~~2005 ~~which~~due ~~has had a significant negative impact on meat and dairy costs. Management has taken actions in an attempt~~ to ~~reduce~~ the ~~impact of these events including~~ ~~enhancing~~sale ~~its~~and ~~menu,~~leaseback intransaction ~~part,~~entered tointo ~~promote certain non-meat menu items, implementing a menu price increase~~ in ~~October~~August ~~2003 and May~~ 2004, ~~negotiating arrangements~~the toimpairment ~~purchase~~of ~~certain~~assets ~~meat products~~ at ~~fixed~~the ~~rates~~end ~~during fiscal~~of fiscal 2005 and ~~targeting certain marketing initiatives in an attempt to change our sales mix and increase sales of lower cost food items. Management cannot predict~~ the ~~duration~~volume of ~~these~~assets ~~cost~~that ~~increases~~have or ~~further~~will ~~impacts~~become ~~that~~fully ~~may~~depreciated ~~occur as~~during afiscal ~~result of these events. However, it is presently anticipated that food~~2005 and ~~beverage costs will remain consistent with~~ fiscal ~~2004 and may increase slightly in fiscal 2005~~2006.

~~Labor~~ General and ~~benefits.~~administrative ~~We experienced a decrease in labor and benefits costs in fiscal 2004 as a percent of revenues as compared to fiscal 2003~~expenses. This decrease has resulted from improved management of hourly labor, a decrease in the cost of providing medical benefits to employees due to plan design changes implemented in June 2003 and a decrease in the cost of workers’ compensation insurance due to a change to a guaranteed cost insurance program in January 2003 as compared to the significant claims incurred in fiscal 2003 under the previous self funded program. Management currently expects tothat ~~realize~~general ~~a slight~~and ~~decrease~~administrative inexpenses ~~labor~~will ~~and~~remain ~~benefit~~relatively ~~costs~~consistent in fiscal ~~2005~~2006 ~~of up to 0.5% of revenues~~ compared to fiscal ~~2004 due primarily to the continued efficient management of hourly labor~~2005.

~~Occupancy~~ Asset ~~and other~~impairment. AsWe ahave ~~result~~recorded ofasset ~~the~~impairment ~~sale~~charges ~~and~~of ~~leaseback transaction entered into in August~~$1.8 ~~2004~~million, ~~we will incur additional rent expense in fiscal 2005 of approximately~~ $1.70 million. ~~In addition, we intend to use a portion of~~and ~~the net proceeds from this transaction to invest in additional marketing for our restaurants~~$5.9 million ~~Management has also recently implemented cost cutting initiatives~~ in ~~regards~~fiscal to2005, a2004 ~~number~~and of2003, ~~the~~respectively. ~~component~~The ~~areas~~accounting ~~included~~for inlong-lived ~~occupancy~~assets ~~and~~requires ~~other~~us ~~expenses. Due~~ to ~~these~~estimate ~~factors,~~future asnet ~~well~~cash asflows ~~the reduced costs expected~~ to be ~~incurred~~generated asby ~~a result of~~ the ~~conversion~~asset of(in ~~certain~~this ~~equipment~~case our ~~leases~~restaurants). ~~from~~If ~~operating~~certain ~~leases~~restaurants todo ~~capital~~not ~~leases~~perform inas ~~fiscal 2005~~expected, ~~management presently~~we ~~expects~~may ~~occupancy~~be ~~and~~required ~~other expenses~~ to ~~remain relatively flat or~~take ~~possibly~~additional ~~increase~~asset ~~slightly~~impairment ascharges, aalthough ~~percent~~at ofpresent ~~total~~no ~~revenues~~such incharges ~~fiscal~~are ~~2005, compared to fiscal 2004~~expected.

40 Interest expense, net. Based on the current debt and capital lease obligations outstanding and the significant debt payments made in fiscal 2005 including the payments made in connection with the sale and leaseback transaction, we presently anticipate that interest expense will decrease significantly in fiscal 2006 compared to fiscal 2005 and will total approximately $0.2 million per quarter in fiscal 2006.

~~Table~~ Income tax (benefit) expense. Due to the existence of ~~Contents~~federal and state income tax loss carryforwards, we do not currently anticipate that any significant income tax expense or benefits will be recorded or realized in fiscal 2006. We have fully reserved all of our tax loss carryforwards because we do not believe that it is more likely than not that our deferred tax assets will be realized in the future.

~~Pre-opening~~LIQUIDITY ~~expenses.~~AND AsCAPITAL ~~discussed above, no additional new restaurant~~RESOURCES ~~openings are currently planned for fiscal 2005. As a result, pre-opening expenses are not anticipated to be significant in fiscal 2005.~~

~~Depreciation~~ Our ~~and~~material ~~amortization.~~financial ~~Management~~commitments ~~currently~~relate ~~expects~~principally ~~that~~to ~~total depreciation~~our working capital requirements and our ~~amortization~~obligations ~~expense~~to ~~will~~make ~~decline~~operating inand ~~fiscal~~capital ~~2005~~lease asand ~~compared to~~term ~~fiscal~~loan ~~2004~~payments ~~due~~in toaccordance with the terms ~~sale~~of ~~and~~our ~~leaseback~~agreements. ~~transaction~~See ~~entered~~Notes ~~into~~8, in9, ~~August 2004~~ and ~~due~~10 to the ~~volume~~Consolidated Financial Statements for a description of ~~assets~~our ~~that~~current ~~have~~outstanding ordebt ~~will~~and ~~become~~capital ~~fully~~and ~~depreciated~~operating lease obligations. As of ~~during~~April 24, ~~fiscal~~2005, ~~2004~~total minimum payments required under our note and ~~fiscal~~lease ~~2005~~obligations in 2006, including interest thereon, were $15.7 million.

~~General and administrative expenses. General and administrative expenses~~37 have declined over the last two years due to cost control initiatives and a reduction in legal and professional expenses. Also, during fiscal 2004, we made additional investments in training for our store managers and in our regional supervisors in order to improve the oversight of restaurant operations and enhance the effectiveness of operational improvements. As a result of these continued investments as well as the increase in rent expense to be incurred in fiscal 2005 resulting from the transaction executed in December 2003 relating to the sale and leaseback of the corporate headquarters building, management currently expects that our general and administrative expenses will increase slightly compared to fiscal 2004.

~~Income~~ The ~~tax~~following ~~(benefit) expense.~~table ~~Due~~summarizes toour ~~the~~future ~~existence~~contractual ofcash ~~federal~~obligations ~~and~~for ~~state income~~each ~~tax~~of ~~loss~~the ~~carryforwards,~~next five wefiscal doyears ~~not~~and ~~currently~~thereafter ~~anticipate~~as ~~that~~of ~~any significant~~April 24, ~~income~~2005 ~~tax~~(dollars ~~expense~~in orthousands). ~~benefits~~Operating ~~will~~lease commitments beinclude ~~recorded~~estimated orcommon ~~realized~~area ~~in fiscal~~maintenance ~~2005~~expenses.

LIQUIDITY AND CAPITAL RESOURCES


	2006		2007		2008		2009		2010		Thereafter		Total
Long term debt:
Principal	$	2,259	$	2,375	$	939	$	17	$	7	$	—	$	5,597
Interest		243		128		20		1		—		—		392

Total		2,502		2,503		959		18		7		—		5,989

Capital lease debt:
Principal		1,325		1,124		417		340		341		1,053		4,600
Interest		290		230		198		168		135		222		1,243

Total		1,615		1,354		615		508		476		1,275		5,843

Operating leases		11,043		10,173		9,636		9,063		8,525		79,365		127,805

Other commitments		517		205		140		142		168		—		1,172

Total	$	15,677	$	14,235	$	11,350	$	9,731	$	9,176	$	80,640	$	140,809

~~Our~~ Other ~~material~~commitments ~~financial~~represent ~~commitments~~minimum ~~relate~~amounts ~~principally~~due to ~~our~~certain ~~working~~vendors under contractual ~~capital~~agreements. ~~requirements~~Amounts ~~and~~reflected ~~our~~above ~~obligations~~could tochange ~~make~~as ~~operating~~additional ~~and~~commitments ~~capital~~may ~~lease~~be made, ~~and~~cancellation ~~term~~provisions ~~loan~~may ~~payments~~be inexercised ~~accordance~~by ~~with~~us ~~the~~or ~~terms~~by of our ~~agreements.~~creditors, ~~See Notes~~or 5,agreements 6,may 7be ~~and~~modified as 20warranted toby ~~the~~changes ~~Consolidated~~in ~~Financial~~business ~~Statements~~or ~~for~~operational aneeds. ~~description of~~Amounts ~~our~~due ~~current~~under ~~outstanding~~long-term debt agreements ~~and~~may ~~capital~~be ~~and~~accelerated ~~operating~~to ~~lease~~the ~~obligations. As~~extent ofthat ~~April 25,~~we ~~2004,~~realize ~~total~~excess ~~minimum~~cash ~~annual~~flow ~~payments~~as ~~required~~described ~~under~~in ~~our note and~~Note ~~lease~~10 ~~obligations,~~to ~~including~~the ~~interest~~Consolidated ~~thereon,~~Financial ~~were $17~~Statements.~~5 million.~~

41 During the fiscal year ended April 24, 2005, our primary sources of working capital were proceeds of the sale/leaseback of 11 properties, cash provided by operations and proceeds from the sale of food and beverage credits (see Note 20 to the Consolidated Financial Statements).

~~Table~~ On August 6, 2004, we entered into a sale/leaseback for 11 restaurant properties with Sovereign. The sale price for the 11 properties was $21.8 million. The properties have been leased back under lease agreements that extend for 20 years and include four five-year renewal options. We used approximately $18.3 million of ~~Contents~~the net proceeds from the sale to repay approximately $24.6 million of secured debt, which was repaid at a discount (resulting in a gain on extinguishment of debt of approximately $7.1 million) and to pay transaction expenses relating to the sale/leaseback. The net gain from the debt repayment is reflected in our consolidated statement of operations for the fiscal year ended April 24, 2005. We also realized a gain on the sale of the properties of approximately $1.7 million, which is recorded as unearned revenue in the consolidated balance sheet as of April 24, 2005 and will be recorded as a reduction of occupancy and other expense over the life of the leases. The remaining net proceeds from the sale of approximately $3.5 million were used for general corporate purposes, including working capital to meet our ordinary course expenses.

~~The~~ In ~~following~~August 2005, ~~table~~we ~~summarizes~~entered ~~our~~into ~~future~~a ~~contractual~~loan ~~cash~~agreement ~~obligations~~with ~~for each~~our ofmajority ~~the~~shareholder. ~~next~~Under ~~five~~that agreement, ~~fiscal~~we ~~years~~have ~~and~~borrowed ~~thereafter~~$1,250,000. asThe ofloan ~~April 25,~~bears ~~2004~~interest ~~(dollars in~~at ~~thousands).~~the ~~Operating~~rate ~~lease~~of ~~commitments~~10% ~~include~~per ~~estimated~~annum ~~common area~~and ~~maintenance expenses.~~is

	2005		2006		2007		2008		2009		Thereafter		Total
Long term debt:
Principal	$	4,448	$	4,683	$	4,688	$	4,034	$	3,008	$	11,805	$	32,666
Interest		2,346		2,045		1,730		1,405		1,154		1,253		9,933
Total		6,794		6,728		6,418		5,439		4,162		13,058		42,599
Capital lease debt:
Principal		1,119		1,054		1,089		408		331		1,397		5,398
Interest		407		343		267		220		190		417		1,844
Total		1,526		1,397		1,356		628		521		1,814		7,242
Operating leases		9,130		8,104		7,171		6,580		5,941		28,888		65,814
Other commitments		694		442		74		—		—		—		1,210
Total	$	18,144	$	16,671	$	15,019	$	12,647	$	10,624	$	43,760	$	116,865

Assecured ~~described~~by ~~below, on August 6, 2004 we executed~~ a ~~sale~~lien ~~and~~on ~~leaseback~~all of ~~eleven~~ of our ~~restaurant properties~~assets. ~~As a~~The ~~result~~loan ofis ~~this~~due ~~transaction~~on May 15, ~~our~~2006, ~~minimum~~or ~~annual~~earlier ~~note and lease obligations~~upon ~~have~~a ~~been~~sale ~~reduced~~of bythe ~~approximately $1~~Company.~~8 million~~ ~~for~~See ~~each~~Note 22 of ~~fiscal~~Notes ~~years~~to ~~2005 through~~Consolidated ~~2009~~Financial ~~and~~Statements. ~~total~~We ~~obligations~~are ~~thereafter~~using ~~have~~the ~~been~~proceeds ~~increased~~of ~~by approximately~~the ~~$31.0 million.~~loan ~~See~~for ~~discussion~~working ~~below~~capital ~~regarding~~in our ~~total contractual cash obligations~~business.

We ~~opened~~expect ~~one~~that ~~new~~our ~~restaurant~~primary insource ~~fiscal year 2004 at a total cost~~ of ~~approximately~~ ~~$1.8 million,~~working ofcapital ~~which~~for ~~$1.4 million~~future ~~was~~periods ~~expended~~will ~~prior~~be tocash ~~April~~flow 27from operations, ~~2003~~proceeds ~~and~~from ~~$0.4 million~~the ~~was~~sale ~~expended~~of inthe ~~fiscal~~closed ~~year~~property, ~~2004.~~possible ~~We do not currently have any~~ additional ~~new~~debt ~~restaurants under development for fiscal year~~and/or ~~2005.~~equity Atfinancing ~~this~~and ~~time,~~possible itadvance issales ~~expected~~of ~~that~~additional ~~the~~food ~~cash~~and ~~required~~beverage tocredits. ~~develop~~We ~~new~~have ~~restaurants~~also ~~beyond~~recently ~~fiscal~~received ~~2005,~~additional ifcash ~~any, will be funded~~ from ~~operations.~~the ~~Should cash~~collection ~~from~~of ~~operations~~insurance beproceeds ~~insufficient~~(see ~~for~~Note ~~future~~21) ~~expansion~~ and ~~additional~~ ~~capital~~proceeds ~~through~~from ~~debt~~our ~~and~~majority ~~equity~~shareholder ~~sources~~under bea ~~unavailable,~~loan ~~there~~agreement ~~can~~(see beNote ~~no assurance that we will be able to open additional restaurants~~22).

42 We have experienced significant cash flow problems in the past. We believe that our ability to generate cash from operations is dependent upon, among other things, demand for our products, a continued commitment to providing an excellent dining experience for our customers, the development and implementation of successful marketing strategies, the cost levels of our various food products, and our continuing efforts to reduce our operating costs. We implemented revenue enhancement programs including the implementation of a new menu with enhanced menu items during fiscal 2005. In addition, we have taken, and continue to take, steps to control our costs. There can be no assurance that these initiatives will be effective in generating profits or producing sufficient cash flows to fund operating requirements, including debt repayments and lease obligations. In addition, if operating results do not improve in the near term as a result of the recent changes that have occurred and the introduction of the new menus, then we may be required to recognize additional impairment charges related to certain long-lived assets (and such charges may be significant).

~~Table~~ We require significant working capital to operate our business. Although there can be no assurance, if we meet our business plan in all material respects, we expect to have sufficient working capital to meet our obligations during fiscal 2006. Factors that could cause us to not meet our business plan could include unforseen events such as material food cost increases, significant decreases in customer volume, hurricanes or other unforseen factors. However, if cash generated from our operations and other possible sources described above are insufficient to fund our financial commitments and working capital requirements, we will have to obtain additional capital from debt or equity financing sources. There can be no assurance that additional debt and/or equity financing will be available on terms acceptable to us, or at all. In the event we are unable to secure needed additional financing, it would likely have a material adverse effect upon our business, results of ~~Contents~~operations or financial condition.

~~Capital~~SUMMARY ~~requirements~~OF ~~relating~~CASH ~~to the opening of~~FLOWS ~~new restaurants have in the past and, to the extent we elect to open new restaurants, may in the future be significant.~~

~~During~~ Cash ~~fiscal year 2004, our primary source of working capital was cash~~ provided by ~~operations.~~operating Weactivities ~~also~~during ~~filed~~fiscal ~~for~~year ~~federal~~2005 ~~income~~was ~~tax refunds totaling approximately~~ $1.24 million ~~during fiscal year 2003~~, ofcompared with ~~which~~ $03.68 million ~~was collected~~provided inby ~~fiscal~~operating ~~year~~activities ~~2003~~during ~~and the remaining $0.6 million was collected in~~ fiscal year 2004. InThe ~~addition,~~primary wesources of ~~have~~cash ~~also filed~~ for ~~approximately~~each ~~$0.2 million in additional federal and state income tax refunds in~~ fiscal year ~~2004, which~~were wethe ~~presently~~net ~~expect~~income togenerated ~~collect~~from ~~during~~operations ~~fiscal~~excluding ~~year 2005. Also, during~~non-cash ~~fiscal~~expenses ~~year~~including ~~2004~~depreciation, weamortization ~~entered into an agreement with a loyalty~~ and ~~rewards company~~asset ~~involving~~impairments ~~the discounted advanced sale of food~~ and ~~beverage~~cash ~~credits~~received ~~to be~~from ~~used at our restaurants. As part of~~ the ~~agreement, we received $2.3 million~~ inadvance ~~exchange~~sale ~~for~~of food and beverage credits ~~during fiscal year 2004, which represents the full amount to be received~~ under the ~~agreement.~~program ~~In June 2004, we renewed the agreement~~ with the loyalty and rewards company~~. Under the~~ ~~agreement,~~as wewell ~~will~~as ~~receive~~collection aof ~~total~~income oftax ~~$3.0 million~~refunds ~~from~~during the ~~advance~~fifty-two ~~sale~~weeks ~~of food~~ended ~~and beverage credits~~April 25, ~~including $1.5 million that was received in June~~ 2004 ~~at the inception of the agreement~~. ~~Such funds have been and will continue~~The toprimary ~~be used to cover operating expenses relating to the~~ use of ~~the~~cash ~~food~~during ~~and beverage credits by~~ the ~~members~~fifty-two ofweeks ~~the~~ended ~~loyalty~~April 24, ~~and~~2005 ~~rewards~~was ~~company.~~cash ~~See further~~used ~~discussion in Note 19~~ to ~~the Consolidated Financial Statements~~support operations.

In Cash ~~July 2003~~provided ~~and~~by ~~March 2004,~~investing weactivities ~~sold~~during ~~our~~fiscal ~~interests~~year in2005 ~~the~~was ~~properties relating~~$19.7 million, compared to $2.9 million ~~two~~provided ofduring ~~our~~fiscal ~~restaurants~~year 2004. ~~Total~~Sources ~~net~~of ~~proceeds~~cash ~~from~~provided ~~these~~by ~~two~~investing activities ~~transactions,~~during ofeach ~~approximately~~period ~~$1.5 million,~~consisted ~~were~~of ~~used~~proceeds tofrom ~~repay~~sales ~~approximately $1.3 million~~of inproperty ~~debt~~ and equipment, primarily relating to the ~~remaining~~August 2004 $0sale/leaseback transaction.~~2 million~~ ~~was~~Cash used ~~for~~by ~~general~~investing activities during each ~~corporate~~period ~~purposes~~consisted of purchases of property and equipment.

In Cash ~~December 2003,~~used wein ~~completed~~financing aactivities ~~sale~~during ~~and~~fiscal ~~leaseback~~year ~~transaction~~2005 ~~relating to~~was ~~our corporate headquarters building. Gross proceeds from the sale were~~ $321.~~0 million. The net proceeds of $2.6~~5 million, ~~after~~compared ~~payment of expenses and security deposits, were used, in part,~~ to ~~pay debt related to the facility of~~ $18.5 million. ~~The~~used ~~remaining~~by ~~net~~financing ~~proceeds~~activities ofduring $1fiscal year 2004.~~1 million~~ ~~were~~Cash ~~retained~~used byin usfinancing ~~for~~activities ~~working~~in ~~capital~~each ~~and~~period ~~general~~consisted ~~corporate~~of ~~purposes.~~repayments ~~The~~of ~~leaseback~~long ~~agreement provides~~term ~~for~~debt ~~rent~~and tocapital belease obligations, ~~paid~~including onearly adebt ~~triple~~payments ~~net~~from ~~basis~~proceeds ~~and~~of ~~extends~~the ~~for~~sale/leaseback ~~a period of~~transactions ~~15 years~~during ~~with~~each ~~two~~fiscal ~~five-~~year ~~renewal options~~.

~~On August 6, 2004, we closed a transaction with Sovereign Roadhouse LLC, a~~39 wholly-owned subsidiary of Sovereign Investment Company, (“Sovereign”) involving the sale and leaseback of eleven restaurant properties that were previously owned. The sale price for the eleven properties was $21.8 million. The properties are being leased from Sovereign under lease agreements that extend for 20 years and include four five-year renewal options. We used approximately $18.1 million of the net proceeds from the property sale to pay expenses related to the transaction and to repay $24.6 million of secured debt, which was repaid at a discount (resulting in a gain on extinguishment of debt of approximately $7.1 million). The net gain from the debt repayment will be reflected in our consolidated financial statements in the second quarter of fiscal 2005. We also realized a gain on the sale of the properties of approximately $1.7 million, which will be recorded as a reduction of occupancy and other expense over the life of the leases. The remaining net proceeds from the sale of approximately $3.7 million will be used for working capital, including new marketing initiatives to promote our existing restaurants.

WeCAPITAL ~~have experienced significant cash flow problems in the past. We~~EXPENDITURES ~~believe that our ability to generate cash from operations is dependent upon, among other things, demand for our products, a continued~~

43 We did not open any new restaurants during the fiscal year ended April 24, 2005. We opened one new restaurant during the fiscal year ended April 25, 2004 at a total cost of approximately $1.8 million, of which $0.4 million was expended during the fiscal year ended April 25, 2004. We do not currently have any additional Company-owned restaurants under development for fiscal year 2006 or planned for the future. At this time, it is expected that incremental capital from debt or equity sources would be needed to open new restaurants. Should cash from operations be insufficient for future expansion and additional capital through debt and equity sources be unavailable, we will not be able to open additional restaurants.

~~Table~~SEASONALITY ofAND ~~Contents~~QUARTERLY RESULTS

~~commitment~~ Our tooperating ~~providing~~results anfluctuate ~~excellent~~seasonally ~~dining~~because ~~experience~~of ~~for~~ our ~~customers,~~ geographic concentration. Of the 67 ~~development~~restaurants ~~and~~currently ~~implementation~~owned ofand ~~successful~~operated ~~marketing~~by ~~strategies~~us, ~~the~~33 ~~cost~~are located in generally residential or ~~levels~~light ofcommercial ~~our~~areas ~~various~~in ~~food~~Florida. ~~products,~~Our ~~and~~restaurant ~~our~~sales ~~continuing~~generally ~~efforts~~increase tofrom ~~reduce~~November ~~our~~through ~~operating~~April, ~~costs.~~the Wepeak ~~implemented~~period ~~revenue~~of ~~enhancement~~the ~~programs~~Florida ~~including~~tourism ~~the~~season, and generally decrease from May through ~~implementation~~October. ofIn aaddition, ~~new~~because ~~menu~~of ~~with~~our ~~enhanced~~present ~~menu~~geographic ~~items~~concentration, inour ~~June 2003~~results ~~and~~of ~~menu~~operations ~~price~~may ~~increases~~be inmaterially ~~October 2003~~adversely ~~and~~affected ~~May 2004.~~by Wea ~~also~~decline ~~have~~in ~~taken~~tourism in Florida, ~~and~~downturns ~~continue~~in Florida’s toeconomy ~~take,~~or ~~steps~~by tohurricanes ~~control~~or ~~our~~other ~~costs.~~adverse ~~There~~weather ~~can~~conditions bein noFlorida. ~~assurance~~To ~~that~~offset ~~these~~this seasonal ~~initiatives~~trend ~~will~~and beto ~~effective~~attempt to reduce the decline in ~~generating~~sales ~~profits~~during orthe ~~producing~~off-season, ~~sufficient cash~~we ~~flows~~run tospecial promotions ~~fund~~for ~~operating~~our ~~requirements~~customers, ~~including~~incentive ~~debt~~contests ~~repayments~~for our employees and ~~lease~~otherwise focus marketing ~~obligations~~initiatives to increasing sales during these periods.

~~Capital~~ In ~~requirements~~addition ~~relating~~ to ~~the~~seasonality, ~~implementation of~~ our ~~business~~quarterly ~~plan have been~~ and ~~will~~annual ~~continue~~operating toresults ~~be significant. If cash generated from our operations~~ and ~~other~~comparable ~~possible sources described above are insufficient to fund~~unit ~~our~~sales ~~financial~~may ~~commitments~~fluctuate ~~and~~significantly ~~working~~as ~~capital~~a ~~requirements~~result ~~(including~~of ~~amounts required~~a tovariety ~~support~~of ~~future growth)~~factors, weincluding ~~will have to obtain additional financing. There can be no assurance that additional debt and/or equity financing will be available on terms acceptable to us, or at all. In~~ the ~~event~~factors wedescribed ~~are~~above ~~unable~~in toForward ~~secure~~Looking ~~needed additional financing, we may have to significantly curtail our operations or forgo growth opportunities~~Statements.

~~SUMMARY~~IMPACT OF ~~CASH FLOWS~~INFLATION

~~Cash~~ The ~~provided~~primary byinflationary ~~operating~~factors ~~activities~~affecting ~~during~~our ~~fiscal~~operations ~~year~~include ~~2004~~food, ~~was~~beverage ~~$3.8~~and labor ~~million,~~costs. ~~compared~~Labor ~~with~~costs ~~$1.2 million~~are ~~provided~~affected by ~~operating~~changes ~~activities~~in ~~during fiscal~~the ~~year~~labor ~~2003.~~market ~~The~~generally ~~primary~~and, ~~sources~~because many of our ~~cash~~employees ~~for~~are ~~each~~paid ~~fiscal~~at ~~year~~federal ~~were~~and ~~the net~~state ~~income~~established ~~generated~~minimum ~~from~~wage ~~operations~~levels, ~~excluding~~changes ~~reorganization~~in ~~expenses~~such ~~and~~wage ~~non-cash~~laws ~~expenses~~affect ~~including~~our ~~depreciation,~~labor ~~amortization~~costs. ~~and~~In ~~asset~~that ~~impairments and~~regard, ~~cash~~the ~~received~~Florida ~~from~~Constitution ~~the~~and ~~advance~~state ~~sale~~regulations of New ~~food~~York ~~and~~were ~~beverage~~recently ~~credits~~amended ~~under~~to increase the ~~new~~ ~~program~~minimum ~~with~~wage ~~the~~payable ~~loyalty~~to Florida and ~~rewards~~New ~~company~~York employees. ~~Cash~~These ~~used~~changes ~~for~~in ~~reorganization items~~New ~~was~~York ~~$0.2 million~~ and ~~$2.5 million~~Florida inwere ~~fiscal~~effective ~~years~~in ~~2004~~January and ~~2003~~May, 2005, respectively. Management believes that the impact of changes in the minimum wage laws will be offset by other changes in our operations.

~~Cash~~ In ~~provided~~addition, bymost ~~investing~~of ~~activities~~our ~~during~~leases ~~fiscal~~require ~~year~~us ~~2004~~to ~~was~~pay ~~$2.9 million~~taxes, ~~compared~~maintenance, torepairs ~~$1.4 million used during fiscal year 2003. Cash provided by investing activities during fiscal year 2004 included the proceeds from sales of property~~ and ~~equipment~~utilities, ~~offset to some extent by purchases of~~ ~~property, plant~~ and ~~equipment.~~these ~~Cash~~costs ~~used~~are insubject ~~investing~~to ~~activities~~inflationary inpressures. ~~fiscal year~~We ~~2003~~believe ~~consisted~~that ~~primarily~~inflation ~~of purchases of property~~rates, ~~plant and equipment,~~which ~~offset~~have tobeen ~~some~~low ~~extent~~in byrecent ~~proceeds~~periods, ~~from~~have ~~sales~~not ofhad ~~property~~a ~~and~~significant ~~equipment.~~impact ~~The proceeds~~on ~~from~~our ~~sales~~food ~~of property~~ and ~~equipment~~labor ~~in fiscal 2004 primarily relates~~costs. toThere ~~the~~is ~~sale~~no ofassurance athat ~~restaurant~~low ~~leasehold~~inflation ~~interest~~rates inwill ~~July 2003,~~continue ~~the~~or ~~sale/leaseback of~~that ~~our~~we ~~corporate~~will ~~headquarters~~have ~~building in December 2003 and~~ the ~~sale~~ability ~~of one~~to ~~restaurant~~control ~~that~~costs ~~was sold~~ in ~~April 2004~~the future.

~~Cash~~ITEM ~~used in financing activities during fiscal year 2004 was $8~~7A.~~5 million,~~ ~~compared~~QUANTITATIVE toAND ~~less~~QUALITATIVE ~~than~~DISCLOSURES ~~$0.1 million~~ABOUT ~~provided~~MARKET ~~by financing activities~~RISK during fiscal year 2003. Cash used in financing activities in fiscal year 2004 consisted of repayments of long term debt and capital lease obligations. Cash provided by financing activities during fiscal year 2003 included $5.0 million in proceeds from issuance of common stock, offset by repayments of long term debt and capital lease obligations.

~~CAPITAL~~ We ~~EXPENDITURES~~do not currently use, and have not historically used, derivative financial instruments to hedge against such market interest rate risk. Changes in market interest rates, either increasing or decreasing rates by up to ten percent, would have no material impact on our results of operations.

~~We opened one new restaurant in June 2003 at a total cost of $1.8 million,~~40 of which $1.4 million was expended in fiscal 2003. We also opened one additional restaurant in fiscal year 2003 at a total cost of approximately $1.1 million. We do not currently have any additional new restaurants under development for fiscal 2005. At this time, it is expected that the cash required to develop new company-owned

~~Table~~ Certain of ~~Contents~~the food products purchased by us are affected by commodity pricing and are, therefore, subject to unpredictable price volatility. These commodities are generally purchased based upon market prices established with vendors. The purchase arrangement may contain contractual features that limit the price paid by establishing certain floors and caps. We do not use financial instruments to hedge commodity prices because our purchase arrangements help control the ultimate cost paid. Extreme changes in commodity prices and/or long-term changes could adversely affect us. However, changes in commodity prices would ultimately affect our competitors as well as us. We expect that in most cases increased commodity prices could be passed through to our consumers via increases in menu prices. From time to time, competitive circumstances could limit menu price flexibility, and in those cases margins would be negatively impacted by increased commodity prices.

~~restaurants,~~ITEM if8. ~~any,~~FINANCIAL ~~beyond~~STATEMENTS ~~2005~~AND ~~will~~SUPPLEMENTARY ~~be funded by cash from operations and~~DATA ~~possible additional debt and/or equity financing.~~

~~SEASONALITY~~ The ~~AND~~financial ~~QUARTERLY~~statements ~~RESULTS~~and supplementary data required by this item are attached to this Form 10-K beginning on page F-1.

~~Our~~ITEM ~~operating results fluctuate seasonally because of our geographic concentration~~9. OfCHANGES ~~the~~IN 69AND ~~restaurants~~DISAGREEMENTS ~~currently~~WITH ~~owned~~ACCOUNTANTS ~~and~~ON ~~operated~~ACCOUNTING byAND ~~us,~~FINANCIAL 34DISCLOSURE are located in generally residential or light commercial areas in Florida. Our restaurant sales generally increase from November through April, the peak period of the Florida tourism season, and generally decrease from May through October. In addition, because of our present geographic concentration, our results of operations may be materially adversely affected by a decline in tourism in Florida, downturns in Florida’s economy or by hurricanes or other adverse weather conditions in Florida. To offset this seasonal trend and to attempt to reduce the decline in sales during the off-season, we run special promotions for our customers, incentive contests for our employees and otherwise focus marketing initiatives to increasing sales during these periods.

~~In addition to seasonality, our quarterly and annual operating results and~~ None. ~~comparable unit sales may fluctuate significantly as a result of a variety of factors, including:~~

•ITEM The efforts we make from time to time (including advertising and promotional programs) to increase our sales, and the success or failure of those programs; • The results of our continual efforts to manage our labor costs, food costs, other restaurant costs and corporate expenses; • Our ability to acquire an adequate supply of food products at acceptable prices, and events that affect the availability and pricing of food products (such as instances of mad cow disease); • Our ability to recruit, train and retain qualified management personnel and to obtain a sufficient number of qualified restaurant employees; • The level of competition from existing or new competitors in the markets in which our restaurants are located; • Trends in consumer preferences, tastes and eating habits and competition for consumer dollars, both from restaurants similar to our restaurants and from restaurants generally; and • U9A. S.CONTROLS ~~domestic~~AND ~~economic conditions, particularly in the markets in which we operate, and the impact of international conflicts on domestic economic conditions.~~PROCEDURES

~~IMPACT~~ We OFcarried ~~INFLATION~~out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Securities Exchange Act Rules 13a-15(b) and 15d-15(c). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of April 24, 2005, our disclosure controls and procedures were effective in timely alerting them to material information relating to us (including our consolidated subsidiaries) required to be included in this report. There were no changes in our procedures during the fiscal year ended April 24, 2005 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~The primary inflationary factors affecting our operations include food,~~41 beverage and labor costs. Labor costs are affected by changes in the labor market generally and, because many of our employees are paid at federal and state established minimum wage levels, changes in such wage laws affect our labor costs. In addition, most of our leases require us to pay taxes, maintenance, repairs and utilities, and these costs are subject to inflationary pressures. We believe that inflation rates, which have been low in recent periods,

~~Table~~PART ~~of Contents~~III

~~have~~ITEM ~~not had a significant impact on our food and labor costs~~10. ~~There~~DIRECTORS isAND ~~no assurance~~EXECUTIVE ~~that~~OFFICERS ~~low~~OF ~~inflation~~THE ~~rates will continue or that we will have the~~REGISTRANT ~~ability to control costs in the future.~~

~~IMPACT~~EXECUTIVE ~~OF RECENT ACCOUNTING PRONOUNCEMENTS~~OFFICERS

In The ~~December 2002,~~names ~~the FASB issued Statement No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure, an amendment~~ of ~~FASB Statement~~our ~~No. 123”~~executive ~~(“SFAS~~officers 148”). SFAS 148 amends FASB Statement No. 123, “Accounting for Stock-Based Compensation”, to provide alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation and tocertain ~~require prominent~~information ~~disclosures about the effects on reported net income of an entity’s accounting policy decisions~~ with respect to ~~stock-based~~each ~~employee~~of ~~compensation. SFAS~~them ~~148 also amends APB Opinion No. 28, “Interim Financial Reporting,” to~~is ~~require~~set ~~disclosures~~forth ~~about those effects in interim financial information~~below. We currently account for our stock-based compensation awards to employees and directors under the accounting prescribed by Accounting Principles Board Opinion No. 25 and provide the disclosures required by SFAS No. 123. We currently intend to continue to account for our stock-based compensation awards to employees and directors under the accounting prescribed by Accounting Principles Board Opinion No. 25 and will adopt the additional disclosure provisions of SFAS 148.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

~~Our~~ Ayman ~~exposure~~Sabi tohas ~~market~~been ~~risk~~our isPresident ~~limited~~and ~~primarily~~Chief toExecutive ~~the~~Officer ~~fluctuating interest~~since ~~rates associated with variable rate indebtedness which is subject to interest rate changes in the United States and Eurodollar markets~~February 1998. ~~We do not~~He ~~currently~~served ~~use,~~as ~~and~~Chairman ~~have~~of ~~not~~our ~~historically~~Executive ~~used,~~Committee ~~derivative~~from ~~financial~~November 1997 ~~instruments~~ to ~~hedge against such market interest rate risk~~February 1998. ~~At April~~Mr. ~~25,~~Sabi ~~2004, we had~~became ~~approximately~~a ~~$0.9 million~~director in ~~variable~~February 1997. ~~rate~~Mr. Sabi ~~indebtedness~~has ~~outstanding, representing~~served ~~approximately~~as 2%the ofChairman ~~our~~and ~~total~~Chief ~~outstanding~~Executive ~~indebtedness.~~Officer ~~Such~~of ~~indebtedness~~SABi ~~was~~International ~~repaid~~Developments, inInc., ~~full~~a intrading, ~~August 2004~~contracting asand ~~discussed~~investment incompany ~~Note~~which ~~20 to the~~owns, ~~Consolidated~~operates ~~Financial~~and ~~Statements.~~invests ~~Changes~~ in ~~market~~various ~~interest~~restaurant ~~rates,~~and ~~either increasing~~retail ~~or decreasing rates by up to ten percent~~concepts, ~~would~~both ~~have~~domestically ~~no material~~and ~~impact~~internationally onsince ~~our results of operations~~1989.

~~Certain~~ Michael ofC. ~~the~~Brant ~~food~~became ~~products~~our ~~purchased~~Executive byVice usPresident ~~are~~of ~~affected~~Finance byand ~~commodity pricing~~Chief ~~and~~Financial ~~are,~~Officer ~~therefore,~~in May 2003. ~~subject~~Prior to ~~unpredictable~~that, ~~price~~he ~~volatility.~~was ~~These commodities~~our ~~are~~Vice ~~generally~~President ~~purchased~~of ~~based~~Finance ~~upon~~and ~~market~~Chief ~~prices~~Financial ~~established~~Officer ~~with~~from ~~vendors~~October 2002 until May 2003. ~~The~~Before ~~purchase~~joining ~~arrangement~~us, ~~may~~Mr. Brant ~~contain~~was, ~~contractual~~from ~~features~~November 1999 ~~that~~until ~~limit~~January 2002, the ~~price~~Vice ~~paid~~President byand ~~establishing~~Chief ~~certain~~Financial ~~floors~~Officer ~~and~~of ~~caps.~~Aviation WeSales doCompany, ~~not~~where ~~use~~he helped ~~financial~~lead ~~instruments~~that tocompany ~~hedge~~through ~~commodity~~a ~~prices~~significant ~~because~~restructuring ~~our~~of ~~purchase~~its operations and capital structure. Mr. ~~arrangements~~Brant ~~help~~also ~~control~~served ~~the~~as ~~ultimate~~a ~~cost~~consultant ~~paid.~~to ~~Extreme~~Aviation ~~changes~~Sales infrom ~~commodity~~January 2002 until April 2002. Prior to ~~prices~~joining ~~and/or~~Aviation ~~long-term~~Sales, ~~changes~~from ~~could~~April 1999 ~~adversely~~to ~~affect~~October 1999, usMr. Brant ~~However,~~was ~~changes~~a inVice President of Becker ~~commodity~~Professional ~~prices~~Services ~~would~~and, ~~ultimately~~for ~~affect~~more ~~our~~than ~~competitors~~five asyears ~~well~~prior asthereto, usMr. Brant Weheld senior financial ~~expect~~positions ~~that~~at inJohn ~~most~~Alden ~~cases~~Life ~~increased~~Insurance ~~commodity~~Company, ~~prices~~the ~~could~~principal besubsidiary ~~passed~~of ~~through~~John toAlden Financial ~~our~~Corporation. ~~consumers~~Additionally, ~~via~~before ~~increases~~joining inJohn ~~menu~~Alden, ~~prices~~Mr. Brant ~~From~~held ~~time~~various ~~to time~~positions, ~~competitive~~including ~~circumstances~~senior ~~could~~manager, ~~limit~~for ~~menu~~a ~~price~~period ~~flexibility,~~of ~~and~~nine inyears ~~those~~with ~~cases~~Price ~~margins would~~Waterhouse. beMr. Brant ~~negatively~~is ~~impacted~~a bycertified ~~increased commodity prices~~public accountant.

~~This~~ Alain ~~market~~K.K. ~~risk~~Lee ~~discussion~~has ~~contains~~been ~~forward-looking~~our ~~statements.~~Executive ~~Actual~~Vice President and Corporate Secretary since September ~~results~~2002. ~~may~~He ~~differ~~was ~~materially~~previously our Vice President of Corporate Affairs and Franchising/Investor Relations from ~~the~~July 1998 ~~discussion~~until ~~based~~September 2002. ~~upon~~From ~~general~~1990 ~~market~~to 1998, Mr. Lee served as Berjaya Group Berhad’s ~~conditions~~Chief Financial Officer and ~~changes~~as ina ~~domestic~~General Manager and ~~global~~Director ~~financial~~of ~~markets~~several other Berjaya subsidiary companies. Berjaya Group Berhad owns 100% of our majority shareholder. Mr. Lee also serves on the Board of Directors of ILTS, Inc.

46 Mark Rogers has been our Vice President of Operations since January 2003. Previously, he was our Senior Director of Operations from October 2000 to June 2002. Prior to joining us, Mr. Rogers was (i) from September 1997 to October 2000, a Regional Director with Uno’s, where he was responsible for seven company stores and seven franchise locations, (ii) from May 1991 to September 1997, a District Manager with Applebee’s responsible for six restaurants and instrumental in beginning a new concept called “Chevy Chase Grill,” (iii) from February 1988 to May 1991, the Executive Food and Beverage Manager at Catawba Island Club where he was responsible for all aspects of the food and beverage department for this private fine dining and casual theme resort restaurant, and (iv) from June 1981 to February 1988 he held various positions with T.G.I. Fridays.

~~Table of Contents~~42

~~The financial statements and supplementary data required by this item are~~DIRECTORS ~~attached to this Form 10-K beginning on page F-1.~~

~~ITEM~~ The 9names of our directors and certain information with respect to each of them are set forth below. ~~CHANGES~~In INeach ~~AND~~case, ~~DISAGREEMENTS~~the ~~WITH~~directors ~~ACCOUNTANTS~~have ONbeen ~~ACCOUNTING~~elected ~~AND~~to ~~FINANCIAL~~serve ~~DISCLOSURE~~until their successors are elected and qualified.

None.

~~ITEM~~ For 9Abiographical information about Messrs. Sabi ~~CONTROLS~~and ~~AND~~Lee, ~~PROCEDURES~~see “Executive Officers” above.

We Ronald ~~carried~~J. ~~out~~Buck anis ~~evaluation,~~co-founder ~~under the supervision~~ and ~~with~~Managing ~~the participation~~Principal of ~~our~~Corsair ~~management~~Partners, ~~including~~LLC and the investment ~~Chief~~manager ~~Executive~~of ~~Officer~~Corsair ~~and Chief~~Special ~~Financial~~Situations ~~Officer~~Fund, ofL.P., ~~the~~both ~~effectiveness~~ of ~~the~~which ~~design~~are ~~and~~investment ~~operation of~~firms ~~our~~specializing ~~disclosure~~in ~~controls~~investing ~~and~~in ~~procedures~~distressed ~~pursuant to Securities Exchange Act Rule 13-a-14(c)~~ and ~~15d-14(c)~~illiquid securities. ~~Based~~Corsair ~~upon~~Special ~~that~~Situations ~~evaluation~~Fund, ~~the Chief Executive~~ ~~Officer~~L.P. ~~and~~is ~~Chief~~a ~~Financial~~holder ~~Officer~~of ~~have~~our ~~concluded~~debt ~~that,~~securities. asFrom of1995 ~~April 25,~~to ~~2004~~1998, ~~our~~ ~~disclosure~~Mr. Buck ~~controls~~was ~~and~~a ~~procedures~~bond ~~were~~analyst ~~effective~~ in ~~timely alerting them~~ toStandard ~~material~~and ~~information~~Poor’s ~~relating~~retail toand usrestaurant ~~(including~~group. ~~our~~Mr. Buck ~~consolidated subsidiaries)~~served ~~required~~in tovarious bepositions ~~included~~ in ~~this~~Chase Manhattan ~~report.~~Bank ~~There~~from ~~were~~1989 noto ~~changes~~1995, and in ~~our~~ ~~procedures~~the ~~during~~last ~~the~~three ~~year~~years ~~ended~~as ~~April 25,~~a ~~2004~~Vice ~~that~~President ~~have~~in ~~materially~~the Recovery ~~affected,~~and orRestructuring ~~are~~Department. ~~reasonably~~Mr. Buck ~~likely~~is toa ~~materially~~member ~~affect,~~of our ~~internal~~Board’s ~~control over~~Audit ~~financial~~Committee ~~reporting~~and Compensation Committee.

47 Nathan D. Benn, is currently the Director and Chief Financial Officer of the Florida Division of Buckhead Beef, which has a contract with us to supply beef to our food purveyor for resale to our restaurants. Previously, he served as Chief Financial Officer of Colorado Boxed Beef Company beginning in October 2000. From August 1997 to September 2000, Mr. Benn was Chief Financial Officer of Cutrale Citrus Juices USA, Inc. Mr. Benn also served as Vice President and General Manager of Rouse Rubber Industries, Inc. from December 1995 to July 1997; and Corporate Controller/Director of MIS of Choctaw Maid Farms, Inc. from December 1992 to November 1995. Mr. Benn is a certified public accountant. Mr. Benn is a member of our Board’s Audit Committee and Compensation Committee and is the qualified financial expert on the Audit Committee.

~~Table~~Section 16(a) ofBeneficial ~~Contents~~Ownership Reporting Compliance

~~PART~~ Section 16(a) ~~III~~of the Exchange Act requires our directors and executive officers and persons who own more than 10% of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock. Officers, directors and beneficial owners of more than 10% of our common stock are required by the SEC regulations to furnish us with copies of all Section 16(a) forms that they file.

~~ITEM~~ Based solely on a review of the copies of such reports furnished to us, or written representation that no such reports were required, we believe that for the fiscal year ended April 24, 2005, all of our officers, directors and greater than 10.% ~~DIRECTORS~~beneficial ~~AND~~owners, ~~EXECUTIVE~~complied ~~OFFICERS~~with OFall Section ~~THE~~16(a) ~~REGISTRANT~~filing requirements applicable to them.

~~EXECUTIVE~~Code ~~OFFICERS~~of Ethics

~~The~~ We ~~names~~have adopted a code of ethics that applies to our principal executive ~~officers~~officer, ~~and~~principal financial ~~certain~~officer, ~~information~~principal ~~with~~accounting ~~respect~~officer or controller or persons performing similar tofunctions. ~~each~~We will provide a copy of ~~them~~the iscode ~~set~~of ~~forth~~ethics ~~below~~upon a written request to the Company, attention, CFO.

Name	Age		Position
Ayman Sabi		41	President and Chief Executive Officer
Michael C. Brant		41	Executive Vice President of Finance and Chief Financial Officer
Alain K.K. Lee		47	Executive Vice President and Corporate Secretary
Mark Rogers		41	Vice President of Operations

~~Michael~~ITEM C11. ~~Brant~~EXECUTIVE ~~became our Executive Vice President of Finance and Chief~~COMPENSATION Financial Officer in May 2003. Prior to that, he was our Vice President of Finance and Chief Financial Officer from October 2002 until May 2003. Before joining us, Mr. Brant was, from November 1999 until January 2002, the Vice President and Chief Financial Officer of Aviation Sales Company, where he helped lead that company through a significant restructuring of its operations and capital structure. Mr. Brant also served as a consultant to Aviation Sales from January 2002 until April 2002. Prior to joining Aviation Sales, from April 1999 to October 1999, Mr. Brant was a Vice President of Becker Professional Services and, for more than five years prior thereto, Mr. Brant held senior financial positions at John Alden Life Insurance Company, the principal subsidiary of John Alden Financial Corporation. Additionally, before joining John Alden, Mr. Brant held various positions, including senior manager, for a period of nine years with Price Waterhouse. Mr. Brant is a certified public accountant.

~~Alain~~Summary ~~K.K.~~Compensation ~~Lee has been our Executive Vice President and Corporate~~Table Secretary since September 2002. He was previously Vice President of Corporate Affairs and Franchising/Investor Relations from July 1998 until September 2002. From 1990 to 1998, Mr. Lee served as Berjaya Group Berhad’s Chief Financial Officer and as a General Manager and Director of several other Berjaya subsidiary companies. Berjaya Group Berhad owns 100% of Berjaya, our majority shareholder. Mr. Lee also serves on the Board of Directors of ILTS, Inc. and Taiga Forest Products Ltd.

~~Mark~~ The ~~Rogers~~following ~~has~~table ~~been~~sets ~~our~~forth ~~Vice~~the ~~President~~compensation ofpaid ~~Operations~~to ~~since January 2003. Previously, he was~~ our ~~Senior~~Executive ~~Director~~Officers ~~of Operations from October 2000 to June~~whose ~~2002.~~compensation ~~Prior~~exceeded to$100,000 ~~joining~~in ~~us,~~fiscal Mr2005. ~~Rogers~~ ~~was~~The ~~(i) from~~individuals ~~September 1997~~included toin ~~October 2000,~~the atable ~~Regional Director with Uno’s, where he was responsible for seven~~are ~~company~~collectively ~~stores~~referred ~~and seven franchise locations, (ii) from May 1991~~ to ~~September 1997,~~as athe ~~District Manager with Applebee’s responsible for six restaurants and instrumental in beginning a new concept called~~ “~~Chevy~~Named ~~Chase Grill,” (iii) from February 1988 to May 1991, the~~ Executive Food and Beverage Manager at Catawba Island Club where he was responsible for all aspects of the food and beverage department for this private fine dining and casual theme resort restaurant, and (iv) from June 1981 to February 1988 he held various positions with TOfficers.~~G.I.~~” ~~Fridays.~~


ANNUAL COMPENSATION
NAME AND PRINCIPAL	FISCAL				OTHER ANNUAL		ALL OTHER
POSITION	YEAR		SALARY		COMPENSATION ⁽¹⁾		COMPENSATION ⁽²⁾
Ayman Sabi,		2005	$	228,977	$	87,078	$	143,898
President and Chief		2004		235,547		67,468		23,555
Executive Officer		2003		409,633		67,642		40,963
Michael C. Brant,		2005		216,704		—		151,668	⁽⁵⁾
Executive Vice		2004		224,049		—		22,405
President of Finance and		2003		105,712		—		7,958
Chief Financial Officer ⁽³⁾
Alain K.K. Lee,		2005		138,885		36,760		13,889
Executive Vice President		2004		135,288		34,332		13,529
and Corporate Secretary		2003		129,492		34,768		12,949
Mark Rogers,		2005		158,719		—		—
Vice President of		2004		130,231		—		—
Operations ⁽⁴⁾		2003		—		—		—


(1)		This amount represents rent and car lease payments made by us for Mr. Sabi and Mr. Lee.

(2)		Represents Supplemental Executive Retirement Plan (“SERP”) and Key Employee Secured Benefit Plan (KESBP) contributions made by us. Also includes, for fiscal year 2005, bonuses paid to Messrs. Sabi and Brant of $110,000 and $100,000, respectively, and retention amounts described at (5) below.

(3)		Mr. Brant began his employment with us on October 8, 2002.

(4)		Mr. Rogers began his employment with us on June 30, 2003.

(5)		On March 29, 2005, the Company entered into a retention agreement (“Agreement”) with Mr. Brant. Under the Agreement, in exchange for agreeing to continue to provide services until at least September 30, 2005 and subject to the terms set forth in the Agreement, Mr. Brant would receive a retention bonus equal to one year’s current base compensation and paid in the manner set forth in the Agreement, including $18,180 paid in fiscal year 2005. As discussed below, such Agreement was amended in August 2005.

~~DIRECTORS~~OPTIONS/SAR GRANTS IN LAST FISCAL YEAR

~~The names of our directors and certain information with respect to each of them are set forth below~~ None. ~~In each case, the directors have been elected to~~ ~~serve until their successors are elected and qualified.~~

Name	Age		Director Since
Ayman Sabi		41	February 1997
Alain K.K. Lee		47	January 1998
Ronald J. Buck		41	September 2002
Nathan D. Benn		42	September 2002

~~Ronald~~AGGREGATED J.OPTIONS ~~Buck~~/ isSAR ~~co-founder~~GRANTS ~~and~~EXERCISED ~~Managing~~IN ~~Principal~~LAST ofFISCAL ~~Corsair~~YEAR ~~Partners, LLC~~AND ~~and~~FISCAL ~~the~~YEAR-END ~~investment~~OPTIONS ~~manager~~/ ~~of Corsair Special Situations Fund, L.P., both~~SAR ~~of which are investment firms specializing in investing in distressed and~~VALUES illiquid securities. From 1995 to 1998, Mr. Buck was a bond analyst in Standard and Poor’s retail and restaurant group. Mr. Buck served in various positions in Chase Manhattan Bank from 1989 to 1995, and in the last three years as a Vice President in the Recovery and Restructuring Department. Mr. Buck is a member of our Board’s Audit Committee and Compensation Committee.

Nathan D. Benn, is currently the Director and Chief Financial Officer of the Florida Division of Buckhead Beef, a major supplier to the Company. Previously, he served as Chief Financial Officer of Colorado Boxed Beef Company beginning in October 2000. From August 1997 to September 2000, Mr. Benn was Chief Financial Officer of Cutrale Citrus Juices USA, Inc. Mr. Benn also served as Vice President and General Manager of Rouse Rubber Industries, Inc. from December 1995 to July 1997; and Corporate Controller/Director of MIS of Choctaw Maid Farms, Inc. from December 1992 to November 1995. Mr. Benn is a certified public accountant. Mr. Benn is a member of our Board’s Audit Committee and Compensation Committee.

Number of Securities

Value of

Underlying

Unexercised

Shares

Unexercised

In-the-Money

Acquired

Options/SARs at

Value

Fiscal Year-End(1)

Exercise

Realized

Exercisable(E)

(#)

($)

Unexercisable(U)

Ayman Sabi

—

E -133,333

U-266,667

E -0-

U -0-

Michael C. Brant

—

E - 66,667

U-133,333

E -0-

U -0-

Alain K.K. Lee

—

E - 66,667

U-133,333

E -0-

U -0-

Mark Rogers

—

E - 58,333

U-116,667

E -0-

U -0-

~~Section 16~~(a1) ~~Beneficial~~All ~~Ownership~~Options ~~Reporting~~awarded ~~Compliance~~ under the 2003 Stock Option Plan.

~~Section 16(a)~~Compensation of ~~the Exchange Act requires our directors and executive~~Directors officers and persons who own more than 10% of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock. Officers, directors and beneficial owners of more than 10% of our common stock are required by the SEC regulations to furnish us with copies of all Section 16(a) forms that they file.

~~Based~~ Each ~~solely~~outside ondirector areceives ~~review~~$3,500 offor ~~the~~each ~~copies~~Board ofMeeting ~~such~~that ~~reports~~he ~~furnished~~attends toand ~~us,~~$500 orfor ~~written~~attendance ~~representation~~at ~~that~~each nomeeting ~~such~~of ~~reports~~the ~~were~~Audit ~~required~~Committee or Compensation Committee. Additionally, weour ~~believe~~Board ~~that~~of ~~for the~~Directors ~~fiscal~~has ~~year~~determined ~~ended~~that ~~April 25,~~upon ~~2004,~~a ~~all~~successful sale of our ~~officers,~~business ~~directors~~in ~~and greater~~which ~~than~~our ~~10%~~shareholders ~~beneficial~~are ~~owners~~being paid consideration in return for their shares, ~~complied~~each ~~with~~non-employee ~~all~~director ~~Section~~will ~~16(~~receive a) ~~filing requirements~~payment ~~applicable~~of ~~to them~~$25,000.

492003 Stock Option Plan

~~Table~~ We have a stock option plan (the 2003 Stock Option Plan) pursuant to which options may be granted to our officers, directors, key employees and independent contractors or to consultants that perform services for us. The plan is administered by the Compensation Committee of ~~Contents~~our Board of Directors, which has the sole authority to make all decisions under the plan.

~~ITEM~~ We 11have reserved 1,500,000 shares of common stock for issuance under the plan. ~~EXECUTIVE~~At ~~COMPENSATION~~April 24, 2005, options to purchase 1,305,000 shares of common stock at an exercise price of $0.36 per share were outstanding under the plan.

~~Summary~~ Under ~~Compensation~~the ~~Table~~plan, the option exercise price per share of common stock may be any price determined by the plan’s administrators at the time of grant; except that the option price of an incentive stock option granted under the plan may not be less than the fair market value per share of common stock on the date of grant (or less than 110% of the fair market value for shareholders who own more than 10% of our stock). Under the plan, “fair market value” shall be determined by the plan administrators and if the shares of our common stock are listed on a national stock exchange or traded on the over the counter market, the fair market value shall equal the average of the closing price of our common stock on the seven market days prior to the option grant date as reported by such exchange or market; provided, however, that the exercise price of options granted under the 2003 Stock Option Plan shall not be less than $0.36 per share.

The ~~following~~exercise ~~table~~price ~~sets~~of ~~forth~~an ~~the~~option ~~compensation~~shall be paid ~~to our Executive Officers whose compensation exceeded $100,000~~ in ~~fiscal 2004~~cash. ~~The~~Cash ~~individuals included~~payments inwill ~~the~~be ~~table~~used ~~are~~for ~~collectively referred to as the “Named Executive~~general ~~Officers~~corporate purposes.”

~~ANNUAL COMPENSATION~~45

NAME AND	FISCAL				OTHER ANNUAL		ALL OTHER
PRINCIPAL POSITION	YEAR		SALARY		COMPENSATION(1)		COMPENSATION(2)
Ayman Sabi,		2004	$	235,547	$	67,468	$	23,555
President and Chief		2003		409,633		67,642		40,963
Executive Officer		2002		405,788		62,178		40,579
Michael C. Brant,		2004		224,049		—		22,405
Executive Vice		2003		105,712		—		7,958
President of Finance and		2002		—		—		—
Chief Financial Officer(3)
Alain K.K. Lee,		2004		135,288		34,332		13,529
Executive Vice President		2003		129,492		34,768		12,949
and Corporate Secretary		2002		129,492		40,369		12,949
Mark Rogers,		2004		130,231		—		—
Vice President of		2003		—		—		—
Operations(4)		2002		—		—		—

(1)		This amount represents rent and car lease payments made by us for Mr. Sabi and Mr. Lee.
(2)		Represents Supplemental Executive Retirement Plan (“SERP”) contributions made by us.
(3)		Mr. Brant began his employment with us on October 8, 2002.
(4)		Mr. Rogers began his employment with us on June 30, 2003.

No option granted under the plan is assignable or transferable, other than by will or by the laws of descent and distribution. During the lifetime of an optionee, an option is exercisable only by the optionee. The expiration date of an option is determined by the plan’s administrators at the time of the grant, but in no event may an option be exercised after the expiration of 10 years from the date of grant. The vesting schedule for an option will be determined by the plan administrators and will be set forth in a written agreement between us and the optionee. The plan’s administrators may, in their sole discretion, accelerate the date on which any option may be exercised. In the event of certain transactions, including certain changes in control, certain mergers and reorganizations, and certain dispositions of substantially all our assets, the plan administrator’s have the discretion to provide on a case-by-case basis that the option will automatically become exercisable or will terminate. If the option is terminated upon a change of control, the optionee will have the right prior to the change of control to exercise any vested option.

50 Unless otherwise provided for by the plan’s administrators, six months after the date on which an optionee’s employment is terminated by reason of death, the unexercised portion of any vested options granted under the plan will automatically be terminated. Unless otherwise provided by the plan’s administrators, the unexercised portion of any vested options granted under the plan will automatically be terminated three months after the date on which an optionee’s employment is terminated for any other reason provided, however, that the unexercised portion of any vested options will automatically be terminated immediately on the date on which an optionee’s employment is terminated for “cause,” as defined in the plan. If an optionee dies within three months after the termination of his/her employment, the optionee’s estate has the right to exercise any portion of the deceased employee’s option within six months of such optionee’s death.

~~Table~~ To prevent certain types of ~~Contents~~dilution of the rights of a holder of an option, the plan provides for appropriate adjustment of the number of shares for which options may be granted, the number of shares subject to outstanding options and the exercise price of outstanding options in the event of any increase or decrease in the number of issued and outstanding shares of our capital stock resulting from a stock split, reverse split, combination of shares, exchange of shares, stock dividend, recapitalization, reclassification or other capital adjustment. The Compensation Committee has discretion to make appropriate adjustments to outstanding options in the event of a merger, consolidation or other reorganization.

~~Options/SAR~~ The ~~Grants~~plan will expire in ~~Last~~May 2013, ~~Fiscal~~and ~~Year~~any option outstanding on such date will remain outstanding until it expires or is exercised. The Board of Directors may amend or terminate the plan or any option at any time, without the approval of our shareholders, provided that any amendment may not adversely affect the rights of an optionee under an outstanding option without the optionee’s consent. In addition, no such amendment may, without approval of our shareholders, increase the number of shares of common stock reserved for issuance under the plan, or modify the requirements for eligibility to receive options under the plan.

	Individual Grants(1)									PotentialRealizableValue at Assumed
										Annual Rates
	Number of		% of Total							of Stock Price
	Securities		Options/SARs							Appreciation for
	Underlying		Granted to			Exercise or				Option Term (2)
	Options/SARs		Employees in			Base Price		Expiration
Name(1)	Granted		Fiscal Year			($/Share)		Date		5%(3)		10%(3)
Ayman Sabi		400,000		30	%	$	0.36		4/28/2013	$	—	$	—
Michael C. Brant		200,000		15	%	$	0.36		4/28/2013	$	—	$	—
Alain K.K. Lee		200,000		15	%	$	0.36		4/28/2013	$	—	$	—
Mark Rogers		175,000		13	%	$	0.36		4/28/2013	$	—	$	—

Severance Agreements

	(1)		All options awarded under the 2003 Stock Option Plan.
	(2)		The full option term was used in the 5% and 10% annual growth projections for the price of the underlying stock.
	(3)		The closing price of our common stock on the effective date of these stock option grants was $0.20, or 56% of the $0.36 exercise price of the stock options. A 5% and 10% appreciation in our stock price over the full term of these options would represent no gain or an immaterial gain, respectively, in the value of the stock options.

In August 2005, we entered into severance agreements with our executive officers and several of our key employees. Under the severance agreements, we are obligated to pay severance benefits to our executive officers and several of our key employees in the event of a “change of control” (as defined in the agreements) in which such executive officers and key employees are terminated (or, under certain circumstances, voluntarily leave our employment), as follows:

~~AGGREGATED~~• ~~OPTIONS~~Ayman /Sabi, ~~SAR~~our ~~GRANTS~~CEO ~~EXERCISED~~and INone ~~LAST~~of ~~FISCAL~~our ~~YEAR~~directors, ~~AND~~will ~~FISCAL YEAR-END~~receive ~~OPTIONS~~18 /months ~~SAR~~of ~~VALUES~~ salary and certain benefits;

Number of Securities

Value of

Underlying

Unexercised

In-the-Money

Options/SARs at

Acquired

Fiscal Year-End(1)

Value

Exercise

Realized

Exercisable(E)

(#)

($)

Unexercisable(U)

Ayman Sabi

—

E -0-

U-400,000

E -0-

U -0-

Michael C. Brant

—

E -0-

U-200,000

E -0-

U -0-

Alain K.K. Lee

—

E -0-

U-200,000

E -0-

U -0-

Mark Rogers

—

E -0-

U-175,000

E -0-

U -0-

	•		Alain Lee, one of our directors and executive officers, will receive 12 months of salary and certain benefits; and

	•		Mark Rogers, our Vice President of Operations, will receive 12 months of salary and certain benefits.

~~Table~~ Additionally, in August 2005, we entered into an amended and restated retention and severance agreement with our CFO, Michael C. Brant. Under the revised agreement, Mr. Brant will receive certain benefits upon a “change of ~~Contents~~control” in which he is terminated or voluntarily leaves our employ. Notwithstanding, under the revised agreement between us and Mr. Brant, if no change of control has occurred by December 31, 2005, Mr. Brant will receive the balance of the payments already due him under the original retention agreement that we entered into with Mr. Brant in March 2005.

~~Compensation~~ Copies of ~~Directors~~the severance agreements are filed as exhibits to this Form 10-K and this summary is qualified in its entirety by the full terms of such agreements.

~~Each~~Special ~~outside~~Incentive ~~director receives $3,500 for each Board Meeting that he attends and $500 for attendance at each meeting of the Audit Committee or~~ Compensation ~~Committee.~~Plan

~~2003~~ Our ~~Stock~~Board ~~Option~~of Directors has adopted the 2005 Special Incentive Compensation Plan (the “Plan”). Under the Plan, in the event of a change of control, as defined, certain compensation will be paid to persons designated as participants under the Plan. The Compensation Committee of our Board of Directors oversees the Plan and designates those persons who will participate under the Plan. In that regard, in August 2005, our Board’s Compensation Committee approved certain compensation payable to executive officers and certain key employees in the event of a “change of control,” as follows:

We• ~~have~~Special incentive compensation will be payable under the Plan in the event of a ~~stock~~Change ~~option~~of ~~plan~~Control (~~the~~as ~~2003~~defined ~~Stock~~in ~~Option~~the Plan) ~~pursuant~~in toa transaction (“Transaction”) in which ~~options~~ ~~may~~our beshareholders ~~granted~~are tobeing paid consideration in return for their shares (whether such Transaction is in the form of a sale of more than a majority of our ~~officers,~~outstanding ~~directors~~shares, ~~key~~a ~~employees~~merger ~~and independent~~of ~~contractors~~us with or tointo ~~consultants~~another ~~that~~company ~~perform~~in ~~services~~which our existing shareholders receive cash in exchange for ~~us.~~their ~~The plan~~shares, isor ~~administered~~a bysale ~~the~~of ~~Compensation~~all ~~Committee~~or substantially all of our ~~Board~~assets and a subsequent liquidation of ~~Directors,~~ us in which ~~has~~our ~~the~~shareholders ~~sole~~receive ~~authority~~a toliquidating ~~make~~distribution ~~all~~in ~~decisions~~return ~~under~~for ~~the~~their ~~plan~~shares). Such special incentive compensation shall be determined using the Transaction Value (defined below) and multiplier determined as follows:

Wea. ~~have~~if ~~reserved~~the 1net payment made or to be made to our shareholders in the Transaction is less than $0.60 per share,~~500,000~~ ~~shares~~than the multiplier with respect to the Transaction shall be 2.0% of ~~common~~the ~~stock~~Transaction ~~for~~Value; ~~issuance~~b. ~~under~~if the ~~plan~~ net payment made or to be made to our shareholders is $0.60 Atper ~~April 25~~share or higher, ~~2004~~but still less than $0.70 per share, ~~options~~than the multiplier with respect to ~~purchase~~the 1Transaction shall be 2.5% of the Transaction Value; c. if the net payment made or to be made to our shareholders is $0.70 per share or higher,~~395~~ but still less than $0.80 per share,~~000~~ ~~shares~~than the multiplier with respect to the Transaction shall be 3.0% of ~~common~~the ~~stock at~~Transaction anValue; ~~exercise~~d. ~~price~~if the net payment made or to be made to our shareholders is $0.80 per share or higher, but still less than $0.90 per share, than the multiplier with respect to the Transaction shall be 3.5% of the Transaction Value; and e. if the net payment made or to be made to our shareholders in the Transaction is at least $0.3690 per share ~~were~~or ~~outstanding~~higher, ~~under~~than the ~~plan~~multiplier with respect to the Transaction shall be 4. 0% of the Transaction Value.

~~Under~~• ~~the~~For ~~plan,~~purposes ~~the option exercise price per share~~ of ~~common stock may be any price determined by~~ the ~~plan’s~~Plan, ~~administrators at~~ the ~~time~~Transaction ofValue ~~grant;~~shall ~~except that the option price of an incentive stock option granted under the plan may not~~ be ~~less~~determined ~~than~~by ~~the~~multiplying ~~fair market value per share of common stock on~~ the ~~date~~number of ~~grant~~ ~~(or less than 110% of the fair market value for shareholders who own more than 10% of our stock). Under the plan, “fair market value” shall be determined by the plan administrators and if the~~ shares of our common stock ~~are~~outstanding ~~listed~~(including ~~on a~~shares ~~national~~issuable ~~stock~~under ~~exchange~~currently oroutstanding ~~traded on the over the counter market, the fair market value shall equal the average of the closing price of our common~~ stock on ~~the~~options) ~~seven~~immediately ~~market days~~ prior to the ~~option~~Transaction ~~grant~~giving ~~date~~rise asto ~~reported by such exchange or market; provided, however, that~~ the ~~exercise~~Change ~~price~~ of ~~options granted~~Control ~~under~~by the ~~2003~~net ~~Stock Option Plan shall not be less than $0.36~~ per ~~share.~~

~~The exercise price of an option shall be paid in cash. Cash payments will~~47 ~~be used for general corporate purposes.~~

~~Unless~~share ~~otherwise~~price ~~provided~~paid ~~for~~or byto ~~the~~be ~~plan’s~~paid ~~administrators,~~to ~~six~~our ~~months after~~shareholders ~~the~~in ~~date on which an optionee’s employment is terminated by reason of death,~~ the ~~unexercised~~Transaction ~~portion~~(after ofaccounting ~~any~~for ~~vested~~payments ~~options~~made ~~granted~~ under ~~the~~this ~~plan will automatically be terminated~~Plan). ~~Unless~~• ~~otherwise~~The ~~provided~~Compensation byCommittee ~~the~~has ~~plan’s administrators,~~determined ~~the~~that ~~unexercised~~our ~~portion~~executive ofofficers ~~any~~shall ~~vested~~receive ~~options granted under~~ the ~~plan~~ ~~will~~following ~~automatically~~participation bein ~~terminated~~funds ~~three~~available ~~months~~under ~~after~~ the date on which an optionee’s employment is terminated for any other reason provided, however, that the unexercised portion of any vested options will automatically be terminated immediately on the date on which an optionee’s employment is terminated for “cause,” as Plan:

52 a. Ayman Sabi – 27 percent b. Michael C. Brant – 17 percent c. Alain Lee – 17 percent d. Mark Rogers – 17 percent

~~Table~~ A copy of ~~Contents~~the 2005 Special Incentive Compensation Plan is an exhibit to this Form 10-K and this summary is qualified in its entirety by the full terms of such plan.

~~defined~~COMPENSATION inCOMMITTEE ~~the~~INTERLOCKS ~~plan.~~AND IfINSIDER ~~an optionee dies within three months after the termination of his/her employment, the optionee’s~~PARTICIPATION ~~estate has the right to exercise any portion of the deceased employee’s option within six months of such optionee’s death.~~

To Neither ~~prevent~~Mr. Buck ~~certain~~or ~~types~~Mr. Benn, ~~of dilution of~~ the ~~rights~~members of ~~a holder of an option,~~ the ~~plan~~compensation ~~provides for appropriate adjustment of the number of shares for which options may be granted~~committee, ~~the~~served ~~number~~as ofofficers ~~shares subject to outstanding options and the exercise price of~~or ~~outstanding~~employees ~~options in the event~~ of ~~any~~ours ~~increase~~ or ~~decrease~~any ~~in the number~~ of ~~issued and outstanding shares of~~ our ~~capital~~subsidiaries ~~stock resulting~~during ~~from~~fiscal ayear ~~stock~~2005. ~~split,~~Other ~~reverse~~than ~~split,~~as ~~combination~~described ~~of shares, exchange of shares, stock dividend, recapitalization,~~in ~~reclassification or other capital adjustment~~Item 13. ~~The~~“Certain ~~Compensation~~Relationships ~~Committee~~and ~~has~~Related ~~discretion~~Transactions,” tothere ~~make~~were ~~appropriate~~no ~~adjustments~~material totransactions ~~outstanding~~between ~~options~~us inand any of the ~~event~~members of aour ~~merger,~~compensation ~~consolidation~~committee orduring ~~other~~fiscal ~~reorganization~~year 2005.

~~The plan will expire in May 2013, and any option outstanding on such date will remain outstanding until it expires or is~~48 exercised. The Board of Directors may amend or terminate the plan or any option at any time, without the approval of our shareholders, provided that any amendment may not adversely affect the rights of an optionee under an outstanding option without the optionee’s consent. In addition, no such amendment may, without approval of our shareholders, increase the number of shares of common stock reserved for issuance under the plan, or modify the requirements for eligibility to receive options under the plan.

~~Neither~~ITEM Mr12. ~~Buck~~ orSECURITY ~~Mr. Benn,~~OWNERSHIP ~~the~~OF ~~members~~CERTAIN ofBENEFICIAL ~~the~~OWNERS ~~compensation~~AND ~~committee,~~MANAGEMENT ~~served~~AND asRELATED ~~officers~~STOCKHOLDER ~~or employees of ours or any of~~MATTERS our subsidiaries during fiscal year 2004. Other than as described in Item 13. “Certain Relationships and Related Transactions,” there were no material transactions between us and any of the members of our compensation committee during fiscal year 2004.

53Security Ownership of Directors and Named Executive Officers

~~Table~~ The following table indicates the share ownership, as of ~~Contents~~April 24, 2005, of our directors and executive officers, and of all directors and executive officers as a group:

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


	TOTAL SHARES
NAME OF BENEFICIAL OWNER (1)	BENEFICIALLY OWNED (2)		PERCENT OF CLASS
Ayman Sabi (3)		2,781,228		9.5	%

Alain K. K. Lee (4)		—		—

Ronald J. Buck		—		—

Nathan D. Benn		—		—

Michael C. Brant		—		—

Mark Rogers		—		—


All executive officers and directors as a group (six persons) (3)		2,781,228		9.5	%

Security Ownership of Directors and Named Executive Officers


(1)		Unless stated otherwise, the address of the beneficial owners is 2703-A Gateway Drive, Pompano Beach, Florida 33069.

(2)		Information concerning beneficial ownership was furnished by the persons named in the table or derived from documents filed with the U.S. Securities and Exchange Commission. Unless stated otherwise, each person named in the table has sole voting and investment power with respect to the shares beneficially owned.

(3)		Includes (i) 3,450 shares of common stock beneficially owned directly by Mr. Sabi and (ii) 2,777,778 shares owned by Tonto Capital Partners, GP (“Tonto”). Mr. Sabi, as a general partner of Tonto, is deemed a beneficial owner of the Company shares owned by Tonto for U. S. securities law purposes. However, Mr. Sabi disclaims any pecuniary interest in the shares owned by Tonto except to the extent of his proportional interest in Tonto.

(4)		Mr. Lee disclaims any beneficial ownership over the shares of our common stock owned by Berjaya.

~~The following table indicates the share ownership, as of April 25, 2004,~~49 ~~of our directors and executive officers, and of all directors and executive officers as a group:~~

	TOTAL SHARES
NAME OF BENEFICIAL OWNER (1)	BENEFICIALLY OWNED (2)		PERCENT OF CLASS
Ayman Sabi (3)		2,781,228		9.5	%
Alain K. K. Lee		—		—
Ronald J. Buck		—		—
Nathan D. Benn		—		—
Michael C. Brant		—		—
Mark Rogers		—		—
All executive officers and directors as a group (five persons) (3)		2,781,228		9.5	%

~~(1)~~Security ~~Unless~~Ownership ~~stated otherwise, the address~~ of ~~the~~Principal ~~beneficial owners is 2703-A Gateway Drive, Pompano Beach, Florida 33069.~~Shareholders

~~(2)~~ The ~~Information~~following ~~concerning beneficial ownership was furnished by the persons named in the~~ table orindicates ~~derived from documents filed with~~ the ~~U.S.~~share ~~Securities~~ownership, ~~and~~as ~~Exchange~~of ~~Commission.~~April 24, ~~Unless stated otherwise~~2005, ~~each~~of ~~person~~any ~~named~~individual known into ~~the~~us ~~table~~to ~~has~~be ~~sole~~a ~~voting~~beneficial ~~and~~owner ~~investment~~of ~~power~~more ~~with~~than ~~respect~~five topercent ~~the~~of ~~shares~~our ~~beneficially~~common ~~owned~~stock.

(3) Includes (i) 3,450 shares of common stock beneficially owned directly by Mr. Sabi and (ii) 2,777,778 shares owned by Tonto Capital Partners, GP (“Tonto”). Mr. Sabi, as a general partner of Tonto, is deemed a beneficial owner of the Company shares owned by Tonto for U. S. securities law purposes. However, Mr. Sabi disclaims any pecuniary interest in the shares owned by Tonto except to the extent of his proportional interest in Tonto.


	TOTAL SHARES
NAME OF BENEFICIAL OWNER (1)	BENEFICIALLY OWNED (2)		PERCENT OF CLASS
Berjaya Group (Cayman) Limited (3)		19,440,786		66.5	%

Tonto Capital Partners, GP (4)		2,777,778		9.5	%


(1)		Unless stated otherwise, the address of the beneficial owners is 2703-A Gateway Drive, Pompano Beach, Florida 33069.

(2)		Information concerning beneficial ownership was furnished by the persons named in the table or derived from documents filed with the U.S. Securities and Exchange Commission. Unless stated otherwise, each person named in the table has sole voting and investment power with respect to the shares beneficially owned.

(3)		Prime Gaming Philippines, Inc. (“Prime”), an affiliated company of Berjaya, beneficially owns 1,388,889 shares or 4.75% of our common stock. In the aggregate, Berjaya and Prime beneficially own 20,829,675 shares or 71.28% of our common stock. The ultimate parent of Berjaya is Berjaya Group Berhad, a diversified holding company headquartered in Malaysia. Berjaya disclaims beneficial ownership over the securities owned by Prime.

(4)		Mr. Sabi, as a general partner of Tonto Capital Partners, GP, is deemed to be the beneficial owner of all of the shares owned by Tonto for U.S. securities law purposes. However, Mr. Sabi disclaims any pecuniary interest in our shares owned by Tonto except to the extent of his proportional interest in Tonto.

~~Table of Contents~~50

~~The~~Equity ~~following~~Compensation ~~table~~Plan ~~indicates the share ownership, as of April 25, 2004,~~Information ~~of any individual known to us to be a beneficial owner of more than five percent of our common stock.~~

	TOTAL SHARES
NAME OF BENEFICIAL OWNER (1)	BENEFICIALLY OWNED (2)		PERCENT OF CLASS
Berjaya Group (Cayman) Limited (3)		19,440,786		66.5	%
Tonto Capital Partners, GP (4)		2,777,778		9.5	%

The following table provides information, as of April 24, 2005, with respect to all of our compensation plans under which equity securities are authorized for issuance:

(1) Unless stated otherwise, the address of the beneficial owners is 2703-A Gateway Drive, Pompano Beach, Florida 33069.

Number of securities

remaining available for

Number of securities

future issuance under

to be issued upon

Weighted-average

equity compensation

exercise of

exercise price of

plans (excluding

outstanding options,

securities reflected in

Plan category

warrants and rights

the first column)

Equity compensation plans approved by security holders(1)(2)

1,305,000

0.36

195,000

Equity compensation plans not approved by security holders

-0-

N/A

-0-

Total

1,305,000

0.36

195,000

(2) Information concerning beneficial ownership was furnished by the persons named in the table or derived from documents filed with the U.S. Securities and Exchange Commission. Unless stated otherwise, each person named in the table has sole voting and investment power with respect to the shares beneficially owned.


(1)		Under the Confirmed Plan of Reorganization, our 1994 and 1998 stock option plans were terminated and all outstanding options were canceled.

(2)		Effective May 15, 2003, our shareholders approved the 2003 Stock Option Plan. The 2003 Plan reserves an aggregate of 1,500,000 shares for the issuance of options thereunder. During fiscal year 2004, 1,395,000 of those options were granted (870,000 of which are currently exercisable). Options for 90,000 shares were forfeited during fiscal year 2005 and 195,000 options remain issuable.

~~(3) Prime~~ITEM ~~Gaming Philippines, Inc~~13. ~~(“Prime”),~~CERTAIN anRELATIONSHIPS ~~affiliated~~AND ~~company~~RELATED ofTRANSACTIONS Berjaya, beneficially owns 1,388,889 shares or 4.75% of our common stock. In the aggregate, Berjaya and Prime beneficially own 20,829,675 shares or 71.28% of our common stock. The ultimate parent of Berjaya is Berjaya Group Berhad, a diversified holding company headquartered in Malaysia. Berjaya disclaims beneficial ownership over the company securities owned by Prime.

~~(4) Mr. Sabi~~ Berjaya, aswhich abeneficially ~~general~~owns ~~partner~~approximately 66.5% of ~~Tonto~~our ~~Capital~~common ~~Partners~~stock, ~~GP,~~directly ~~is deemed~~or toindirectly beowns ~~the~~Roadhouse ~~beneficial~~Grill ~~owner~~Asia ofPacific ~~all~~(H.K.) ofLimited ~~the~~(“Roadhouse ~~shares~~Grill ~~owned~~Hong byKong”) ~~Tonto for U.S.~~and ~~securities~~Roadhouse ~~law~~Grill ~~purposes.~~Asia ~~However,~~Pacific ~~Mr. Sabi~~(Cayman) ~~disclaims~~Limited ~~any~~(“Roadhouse ~~pecuniary~~Grill ~~interest in~~Asia”). ~~our~~For ~~shares~~a ~~owned~~description byof ~~Tonto~~the franchise ~~except~~relationship tobetween ~~the~~us ~~extent~~and ofBerjaya, ~~his~~see ~~proportional interest~~Item 1. ~~in Tonto~~Business.

55 On February 14, 2001, Berjaya loaned us $1.5 million. The loan was evidenced by a promissory note with interest at 10% per annum, was payable by us on demand at any time after August 14, 2001, and was collateralized by intellectual property and certain unencumbered real and personal property. Pursuant to our Confirmed Plan of Reorganization, in September 2002, Berjaya received in full satisfaction of the principal amount of this loan, 4,166,667 shares of our common stock at the issue price of $0.36 per share. We currently owe Berjaya $100,000 of accrued but unpaid interest as of April 24, 2005 under this loan. Berjaya is currently offsetting this amount against royalties due to us under our franchise arrangement with

~~Table of Contents~~51

~~The~~Roadhouse ~~following~~Grill ~~table~~Asia. ~~provides~~See ~~information,~~Item 1. as“Business of— ~~April 25,~~Franchised ~~2004,~~Restaurants” ~~with respect~~and toNote ~~all~~16 of ~~our~~Notes to ~~compensation~~Consolidated ~~plans~~Financial ~~under~~Statements ~~which equity securities are authorized~~ for ~~issuance:~~information.

Number of securities

remaining available for

Number of securities

future issuance under

to be issued upon

Weighted-average

equity compensation

exercise of

exercise price of

plans (excluding

outstanding options,

securities reflected in

Plan category

warrants and rights

the first column)

Equity compensation plans approved by security holders(1)(2)

1,395,000

0.36

105,000

Equity compensation plans not approved by security holders

-0-

N/A

-0-

Total

1,395,000

0.36

105,000

On September 30, 2002, pursuant to our Confirmed Plan of Reorganization, Berjaya, and its affiliate, Prime Gaming Philippines, Inc, invested and paid $3.5 million and received 9,722,222 shares of common stock at the issue price of $0.36 per share.

~~(1)~~ In August ~~Under~~2005, ~~the~~we ~~Confirmed~~entered ~~Plan~~into ofa ~~Reorganization,~~loan ~~our~~agreement ~~1994~~with ~~and~~Berjaya ~~1998~~under ~~stock~~which ~~option~~we have ~~plans~~borrowed ~~were~~$1.25 million. ~~terminated~~See Item 7. “Management’s Discussion of Financial Condition and ~~all~~Results ~~outstanding~~of Operations” ~~options~~and ~~were~~Note ~~canceled~~22 of Notes to Consolidated Financial Statements for information.

~~(2) Effective~~ Tonto ~~May 15,~~Capital ~~2003~~Partners, ~~our~~GP ~~shareholders~~is ~~approved~~affiliated with Ayman Sabi, the ~~2003~~Company’s ~~Stock~~Chief ~~Option~~Executive ~~Plan.~~Officer, ~~The~~President ~~2003~~and ~~Plan~~a ~~reserves~~director. anPursuant ~~aggregate~~to our Confirmed Plan of 1Reorganization,~~500~~ Tonto purchased 2,~~000~~777,778 shares of our common stock for ~~the~~$0.36 ~~issuance of~~per ~~options~~share. ~~thereunder~~Mr. Sabi, ~~During~~as ~~fiscal~~a ~~year~~general ~~2004,~~partner of 1Tonto,~~395,000~~ is deemed a beneficial owner of ~~those~~the ~~options~~shares owned by Tonto for U.S. securities law ~~were~~purposes. ~~granted~~However, ~~and~~Mr. Sabi ~~105,000~~disclaims ~~remain~~any ~~issuable~~pecuniary interest in the shares owned by Tonto except to the extent of his proportional interest in Tonto.

~~ITEM~~ Ronald 13J. ~~CERTAIN~~Buck, ~~RELATIONSHIPS~~who ~~AND~~is ~~RELATED~~one ~~TRANSACTIONS~~of our directors, is co-founder and Managing Principal of Corsair Partners, LLC and the investment manager of Corsair Special Situations Fund, L.P., both of which are investment firms specializing in investing in distressed and illiquid securities. Corsair Special Situations Fund, L.P. is the holder of a note from us in the amount of $2.9 million as of April 24, 2005 payable in monthly installments of $103,959, with interest at the rate of 5% per annum, through October 2007.

~~Berjaya,~~Nathan ~~which~~D. ~~beneficially~~Benn, ~~owns~~one ~~approximately 66.5%~~ of our ~~common stock~~directors, ~~directly~~ oris ~~indirectly~~currently ~~owns~~the ~~Roadhouse~~Director ~~Grill~~and ~~Asia~~Chief ~~Pacific~~Financial ~~(H.K.)~~Officer ~~Limited~~of ~~(“Roadhouse~~the ~~Grill~~Florida ~~Hong~~Division ~~Kong”)~~of ~~and~~Buckhead ~~Roadhouse~~Beef, ~~Grill~~which ~~Asia~~has ~~Pacific~~a ~~(Cayman)~~contract ~~Limited (“Roadhouse~~with ~~Grill~~us ~~Asia”).~~to ~~For~~supply abeef ~~description~~to ofour ~~the franchise relationship~~food ~~between~~purveyor usfor ~~and~~resale ~~Berjaya,~~to ~~see~~our ~~Item 1~~restaurants. ~~Business.~~

OnWe ~~February 14,~~believe ~~2001,~~that ~~Berjaya~~all ~~loaned~~of usour ~~$1.5 million.~~transactions ~~The loan was evidenced by a promissory note~~ with ~~interest~~related atparties ~~10%~~are ~~per annum, was payable by us on demand~~ at ~~any~~least ~~time~~as ~~after~~favorable ~~August 14, 2001, and was collateralized by intellectual property and certain unencumbered real and personal property. Pursuant~~ to ~~our~~us Confirmed Plan of Reorganization, in September 2002, Berjaya received in full satisfaction of the principal amount of this loan, 4,166,667 shares of our common stock at the issue price of $0.36 per share. We currently owe Berjaya $100,000 of accrued but unpaid interest as oftransactions ~~April 25,~~that ~~2004~~might ~~under this~~have ~~loan.~~occurred ~~Berjaya~~with isunrelated ~~currently~~third ~~offsetting this amount against royalties due to us under our franchise arrangement with~~ parties.

56ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

~~Table~~ The offollowing ~~Contents~~sets forth the aggregate fees billed to us by Grant Thornton LLP, our independent registered public accounting firm for fiscal years 2005 and 2004:

~~Roadhouse~~Audit ~~Grill Asia. See Item 1. “Business — Franchised Restaurants”~~Fees ~~and Note 16 of Notes to Consolidated Financial Statements for information.~~

On Fees ~~September 30,~~billed ~~2002,~~by ~~pursuant~~Grant toThornton ~~our~~for ~~Confirmed~~audit ~~Plan~~services ofwere ~~Reorganization~~approximately $141,000 for fiscal year ~~Berjaya,~~2005 and ~~its affiliate~~$120,000 ~~Prime~~for ~~Gaming~~fiscal ~~Philippines,~~year ~~Inc~~2004, ~~invested~~including ~~and~~fees ~~paid $3.5 million~~associated ~~and~~with ~~received~~the 9annual audit,~~722,222~~ ~~shares~~the reviews of ~~common~~our ~~stock~~quarterly atreports ~~the~~on ~~issue~~Form ~~price of~~10-Q, ~~$0.36~~and ~~per~~fees ~~share~~related to filings with the SEC.

~~Tonto~~Audit-Related ~~Capital Partners, GP is affiliated with Ayman Sabi, the Company’s~~Fees Chief Executive Officer, President and a director. Pursuant to our Confirmed Plan of Reorganization, Tonto purchased 2,777,778 shares of our common stock for $0.36 per share. Mr. Sabi, as a general partner of Tonto, is deemed a beneficial owner of the shares owned by Tonto for U.S. securities law purposes. However, Mr. Sabi disclaims any pecuniary interest in the shares owned by Tonto except to the extent of his proportional interest in Tonto.

~~Ronald~~ Fees J.billed ~~Buck,~~by ~~who~~Grant isThornton ~~one~~for ~~of our directors, is co~~audit-~~founder~~related ~~and~~services ~~Managing Principal~~were ofapproximately ~~Corsair Partners~~$8,000 ~~LLC~~for ~~and the investment manager of Corsair~~fiscal ~~Special~~year ~~Situations Fund~~2005, ~~L.P.,~~primarily ~~both~~fees offor ~~which~~work ~~are~~related ~~investment~~to ~~firms~~our ~~specializing in~~401k ~~investing~~plan, ~~in distressed~~ and ~~illiquid~~nil ~~securities.~~for ~~Corsair~~fiscal ~~Special~~year ~~Situations Fund, L.P. is the holder of a note from us in the amount of $4.0 million as of April 25,~~ 2004 ~~payable in monthly installments of $103,959, with interest at the rate of 5% per annum, through October 2007~~.

~~Nathan~~Tax ~~D. Benn, one of our directors, is currently the Director and Chief~~Fees ~~Financial Officer of the Florida Division of Buckhead Beef, which has a contract with us to supply beef to our food purveyor for resale to our restaurants.~~

~~ITEM~~ Fees ~~14.~~billed ~~PRINCIPAL~~by ~~ACCOUNTANT~~Grant ~~FEES~~Thornton ~~AND~~for ~~SERVICES~~tax services, including tax compliance and tax consulting, were approximately $81,000 for fiscal year 2005 and $31,000 for fiscal year 2004.

~~The~~All ~~following~~Other ~~sets forth the aggregate fees billed to us by Grant Thornton~~Fees ~~LLP, our independent accountants for fiscal years 2004 and 2003 (dollars in thousands):~~

~~Audit~~ There ~~Fees~~were no other fees paid.

~~Fees billed by Grant Thornton for audit services were approximately~~52 $120,000 for fiscal year 2004 and $162,000 for fiscal year 2003, including fees associated with the annual audit, the reviews of our quarterly reports on Form 10-Q, statutory audits required internationally, fees related to filings with the SEC and accounting consultations.

~~Fees~~ The ~~billed~~Audit Committee of the Board of Directors has implemented procedures to ensure that all audit and permitted non-audit services provided to us are pre-approved by ~~Grant~~the ~~Thornton~~Audit ~~for~~Committee. All of the audit-related, tax and all other services ~~were approximately~~provided ~~nil~~by ~~for~~Grant Thornton to us in fiscal year 2005 and fiscal year 2004 ~~and~~were ~~nil~~approved ~~for~~by the Audit Committee pursuant to these procedures. All non-audit services provided in fiscal year ~~2003~~2005 were reviewed with the Audit Committee, ~~for~~which ~~consultations~~concluded onthat ~~proposed~~the ~~financial~~provision ~~reporting~~of ~~standards~~such onservices ~~internal~~by ~~controls~~Grant Thornton was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions.

~~Tax Fees~~53

~~All~~PART ~~Other Fees~~IV

~~Fees~~ITEM ~~billed by Grant Thornton for all other services were approximately nil for fiscal year 2004 and $~~15. EXHIBITS,~~000~~ ~~for~~FINANCIAL ~~fiscal~~STATEMENT ~~year 2003~~SCHEDULES, ~~and~~AND ~~primarily included~~REPORTS ~~fees~~ON ~~for~~FORM ~~audit of the Company’s 401k plan.~~8-K

57 (a) The following documents are filed as part of this Form 10-K.

~~Table~~1. Consolidated Financial Statements The Consolidated Financial Statements are listed in the accompanying “Index to Financial Statements” on Page F-1. 2. Financial Statement Schedules Financial Statement Schedules are listed in the accompanying “Index to Financial Statements” on Page F-1. 3. Exhibits The exhibits listed below are filed or incorporated by reference as part of ~~Contents~~this Form 10-K. For exhibits incorporated by reference, the location of the exhibit in the previous filing is indicated parenthetically.

The Audit Committee of the Board of Directors has implemented procedures to ensure that all audit and permitted non-audit services provided to us are pre-approved by the Audit Committee. All of the audit-related, tax and all other services provided by Grant Thornton to us in fiscal year 2004 were approved by the Audit Committee pursuant to these procedures. All non-audit services provided in fiscal year 2004 were reviewed with the Audit Committee, which concluded that the provision of such services by Grant Thornton was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions.


Exhibit		Description
2.1		Debtor’s Second Amended and Restated Disclosure Statement in Support of Chapter 11 Plan of Reorganization, as Modified, dated June 12, 2002 (incorporated by reference to Exhibit 2.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 28, 2002).

2.2		Debtor’s Second Amended and Restated Chapter 11 Plan of Reorganization as Modified, dated June 12, 2002 (incorporated by reference to Exhibit 2.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 28, 2002).

2.3		Order Confirming Debtor’s Second Amended and Restated Chapter 11 Plan of Reorganization, as Modified (incorporated by reference to Exhibit 2.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 28, 2002).

3.1		Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 27, 2003).

3.2		Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 dated September 26, 1996).

10.2		Master Development Agreement, dated January 5, 1996, between the Company and Roadhouse Grill Asia (incorporated by reference to Exhibit 10.31 to the Registration Statement on Form S-1 dated September 26, 1996).

5854

PART IV


Exhibit		Description
10.3		Addendum to Master Development Agreement, dated August 8, 2003, between the Company and Roadhouse Grill Asia Pacific (Cayman) Limited (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 26, 2003).

10.4		Addendum to Master Development Agreement, dated August 8, 2003, between the Company and Roadhouse Grill Asia Pacific (HK) (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 26, 2003).

10.6		Master Lease Agreement between the Company and Pacific Financial Company, dated June 2, 1997 (incorporated by reference to Exhibit 10.42 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 1997).

10.9		Amendment dated December 1, 1997 to that Master Development Agreement executed January 5, 1996 by and between Roadhouse Grill, Inc. and Roadhouse Grill Asia Pacific (H.K.) Limited (incorporated by reference to Exhibit 10.49 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 1997).

10.10		Amendment dated December 1, 1997 to that Master Development Agreement executed January 5, 1996 by and between Roadhouse Grill, Inc. and Roadhouse Grill Asia Pacific (Cayman) Limited (incorporated by reference to Exhibit 10.50 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 1997).

10.11		Convertible Secured Promissory note, dated February 14, 2001, made by the Company in favor of Berjaya (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report for the fiscal quarter ended January 28, 2001).

10.12		Roadhouse Grill, Inc. 2003 Stock Option Plan (incorporated by reference to the Company’s Proxy Statement dated April 22, 2003).

10.14		Promissory Note, dated September 20, 2002, made by the Company in favor of CNL Funding 2000-A, LP. (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 26, 2003).

10.15		Promissory Note, dated September 20, 2002, made by the Company in favor of CNL Income Fund III, LTD. (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 26, 2003).

10.16		Promissory Note, dated September 20, 2002, made by the Company in favor of CNL APF Partners, LP. (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 26, 2003).

10.17		Promissory Note, dated September 20, 2002, made by the Company in favor of CORSAIR Special Situations Fund LP. (incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 26, 2003).

~~ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K~~55

1. Consolidated Financial Statements The Consolidated Financial Statements are listed in the accompanying “Index to Financial Statements” on Page F-1. 2. Financial Statement Schedules Financial Statement Schedules are listed in the accompanying “Index to Financial Statements” on Page F-1. 3. Exhibits The exhibits listed below are filed or incorporated by reference as part of this Form 10-K. For exhibits incorporated by reference, the location of the exhibit in the previous filing is indicated parenthetically.


Exhibit		Description
10.18		Partnership agreement of Tonto Capital Partners GP (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 25, 2004).

10.19		Trademark License Agreement, dated March 3, 2004, between the Company and Roadhouse Grill Italia S.R.L. (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 25, 2004).

10.20		Purchase Agreement, dated July 28, 2004, between the Company and Sovereign Roadhouse LLC. (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 25, 2004).

10.21		Retention Agreement dated as of March 29, 2005 by and between Roadhouse Grill, Inc. and Michael C. Brant (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 7, 2005).

10.22		Employee Severance Agreement between the Company and Ayman Sabi*

10.23		Amended and Restated Retention and Severance Agreement between the Company and Michael C. Brant*

10.24		Employee Severance Agreement between the Company and Kok Kay (Alain) Lee*

10.25		Employee Severance Agreement between the Company and Mark Rogers*

10.26		Employee Severance Agreement between the Company and David Foulke*

10.27		Employee Severance Agreement between the Company and Dorothy Blalock*

10.28		Employee Severance Agreement between the Company and Kenneth Fordik*

10.29		Roadhouse Grill, Inc. 2005 Special Incentive Compensation Plan*

10.30		Loan Agreement, dated as of August 10, 2005, between Berjaya Group (Cayman) Limited and the Company*

10.31		Line of Credit Promissory Note made by the Company in favor of Berjaya Group (Cayman) Limited*

10.32		Security Agreement between Berjaya Group (Cayman) Limited and the Company*

21.1		Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2000).

31.1		Certification by Chief Executive Officer under Section 302 of Sarbanes-Oxley.*

31.2		Certification by Chief Financial Officer under Section 302 of Sarbanes-Oxley.*

32.1		Certification by Chief Executive Officer under Section 906 of Sarbanes-Oxley.*

32.2		Certification by Chief Financial Officer under Section 906 of Sarbanes-Oxley.*

Exhibit		Description
2.1		Debtor’s Second Amended and Restated Disclosure Statement in Support of Chapter 11 Plan of Reorganization, as Modified, dated June 12, 2002 (incorporated by reference to Exhibit 2.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 28, 2002).
2.2		Debtor’s Second Amended and Restated Chapter 11 Plan of Reorganization as Modified, dated June 12, 2002 (incorporated by reference to Exhibit 2.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 28, 2002).
2.3		Order Confirming Debtor’s Second Amended and Restated Chapter 11 Plan of Reorganization, as Modified (incorporated by reference to Exhibit 2.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 28, 2002).
3.1		Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 27, 2003).
3.2		Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 dated September 26, 1996).


*		Filed herewith.

5956

Exhibit		Description
10.1		Purchase and Sale Agreement, dated August 30, 1996, between Roadwear, Inc. and the Company, relating to the Kendall restaurant (incorporated by reference to Exhibit 10.28 to the Registration Statement on Form S-1 dated September 26, 1996).
10.2		Master Development Agreement, dated January 5, 1996, between the Company and Roadhouse Grill Asia (incorporated by reference to Exhibit 10.31 to the Registration Statement on Form S-1 dated September 26, 1996).
10.3		Addendum to Master Development Agreement, dated August 8, 2003, between the Company and Roadhouse Grill Asia Pacific (Cayman) Limited (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 26, 2003).
10.4		Addendum to Master Development Agreement, dated August 8, 2003, between the Company and Roadhouse Grill Asia Pacific (HK) (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 26, 2003).
10.5		Investment Agreement, dated October 25, 1995 between Berjaya and the Company (incorporated by reference to Exhibit 10.39 to the Registration Statement on Form S-1 dated September 26, 1996).
10.6		Master Lease Agreement between the Company and Pacific Financial Company, dated June 2, 1997 (incorporated by reference to Exhibit 10.42 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 1997).
10.7		Agreement for Purchase and Sale of Membership Interest in Boca Roadhouse, L.C., a limited liability company, dated December 15, 1997 (incorporated by reference to Exhibit 10.47 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 1997).

(b)		REPORTS ON FORM 8-K:

		On April 6, 2005 we filed a Form 8-K under Item 2 reporting that the Company had entered into a retention agreement with Michael C. Brant.

6057

Exhibit		Description
10.8		Roadhouse Grill, Inc. Deferred Compensation Plan. Effective June 3, 1997 (incorporated by reference to Exhibit 10.48 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 1997).
10.9		Amendment dated December 1, 1997 to that Master Development Agreement executed January 5, 1996 by and between Roadhouse Grill, Inc. and Roadhouse Grill Asia Pacific (H.K.) Limited (incorporated by reference to Exhibit 10.49 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 1997).
10.10		Amendment dated December 1, 1997 to that Master Development Agreement executed January 5, 1996 by and between Roadhouse Grill, Inc. and Roadhouse Grill Asia Pacific (Cayman) Limited (incorporated by reference to Exhibit 10.50 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 1997).
10.11		Convertible Secured Promissory note, dated February 14, 2001, made by the Company in favor of Berjaya (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report for the fiscal quarter ended January 28, 2001).
10.12		Roadhouse Grill, Inc. 2003 Stock Option Plan (incorporated by reference to the Company’s Proxy Statement dated April 22, 2003).
10.13		Promissory Notes and Forbearence Agreement with Colorado Boxed Beef (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 28, 2001).
10.14		Promissory Note, dated September 20, 2002, made by the Company in favor of CNL Funding 2000-A, LP. (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 26, 2003).
10.15		Promissory Note, dated September 20, 2002, made by the Company in favor of CNL Income Fund III, LTD. (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 26, 2003).
10.16		Promissory Note, dated September 20, 2002, made by the Company in favor of CNL APF Partners, LP. (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 26, 2003).

SIGNATURES

61 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 12th day of August, 2005.

~~Table~~ROADHOUSE GRILL, INC. By: /s/ Michael C. Brant Michael C. Brant Executive Vice President of ~~Contents~~Finance and Chief Financial Officer

Exhibit		Description
10.17		Promissory Note, dated September 20, 2002, made by the Company in favor of CORSAIR Special Situations Fund LP. (incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 26, 2003).
10.18		Partnership agreement of Tonto Capital Partners GP incorporated by reference to Exhibit 10.1 to the Company‘s Quarterly Report on Form 10-Q for the fiscal quarter ended January 25, 2004).
10.19		Trademark License Agreement, dated March 3, 2004, between the Company and Roadhouse Grill Italia S.R.L.*
10.20		Purchase Agreement, dated July 28, 2004, between the Company and Sovereign Roadhouse LLC.*
16.1		Letter of KPMG LLP to the Securities and Exchange Commission, dated September 24, 2001 (incorporated by reference to Exhibit 16 to the Company’s Form 8-K filed with the Securities and Exchange Commission on September 24, 2001).
21.1		Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2000).
31.1		Certification by Chief Executive Officer under Section 302 of Sarbanes-Oxley.*
31.2		Certification by Chief Financial Officer under Section 302 of Sarbanes-Oxley.*
32.1		Certification by Chief Executive Officer under Section 906 of Sarbanes-Oxley*
32.2		Certification by Chief Financial Officer under Section 906 of Sarbanes-Oxley*

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

* Filed herewith.


Name	Capacity	Date
/s/ Ayman A. Sabi	President, Chief Executive
Ayman A. Sabi	Officer (Principal Executive	August 12, 2005
	Officer), and Director

/s/ Michael C. Brant	Executive Vice President of Finance
Michael C. Brant	and Chief Financial Officer	August 12, 2005
	(Principal Financial Officer)

/s/ Alain K. K. Lee	Executive Vice President,
Alain K. K. Lee	Corporate Secretary, and	August 12, 2005
	Director

/s/ Nathan D. Benn
Nathan D. Benn	Director	August 12, 2005

/s/ Ronald J. Buck
Ronald J. Buck	Director	August 12, 2005

~~(b) REPORTS ON FORM 8-K: None~~58

~~Table~~INDEX ofTO ~~Contents~~FINANCIAL STATEMENTS

SIGNATURES


		Page
Report of Independent Registered Public Accounting Firm		F-1

Consolidated Balance Sheets as of April 24, 2005 and April 25, 2004		F-2

Consolidated Statements of Operations for the Fifty-Two Weeks Ended April 24, 2005, April 25, 2004, and April 27, 2003		F-3

Consolidated Statements of Shareholders’ Equity for the Fifty-Two Weeks Ended April 24, 2005, April 25, 2004, and April 27, 2003		F-5

Consolidated Statements of Cash Flows for the Fifty-Two Weeks Ended April 24, 2005, April 25, 2004, and April 27, 2003		F-6

Notes to Consolidated Financial Statements		F-7

~~Pursuant to the requirements of Section 13 or 15(d) of the Securities~~59 ~~Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 6th day of August, 2004.~~

~~Pursuant~~REPORT toOF ~~the requirements of the Securities Exchange Act of 1934, this~~INDEPENDENT ~~report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.~~

Name	Capacity	Date
/s/ Ayman A. Sabi Ayman A. Sabi	President, Chief Executive Officer (Principal Executive Officer), and Director	August 6, 2004
/s/ Michael C. Brant Michael C. Brant	Executive Vice President of Finance and Chief Financial Officer (Principal Financial Officer)	August 6, 2004
/s/ Alain K. K. Lee Alain K. K. Lee	Executive Vice President, Corporate Secretary, and Director	August 6, 2004
/s/ Nathan D. Benn Nathan D. Benn	Director	August 6, 2004
/s/ Ronald J. Buck Ronald J. Buck	Director	August 6, 2004

REGISTERED PUBLIC ACCOUNTING FIRM

63Board of Directors and Shareholders Roadhouse Grill, Inc.

~~Table~~We have audited the accompanying consolidated balance sheets of ~~Contents~~Roadhouse Grill, Inc. and Subsidiaries as of April 24, 2005 and April 25, 2004, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the fifty-two weeks ended April 24, 2005, April 25, 2004 and April 27, 2003. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

	Page
Report of Independent Registered Public Accounting Firm – Grant Thornton LLP		F-1
Consolidated Balance Sheets as of April 25, 2004 and April 27, 2003		F-2
Consolidated Statements of Operations for the Fifty-Two Weeks Ended April 25, 2004, April 27, 2003, and April 28, 2002		F-3
Consolidated Statements of Shareholders’ Equity for the Fifty-Two Weeks Ended April 25, 2004, April 27, 2003, and April 28, 2002		F-5
Consolidated Statements of Cash Flows for the Fifty-Two Weeks Ended April 25, 2004, April 27, 2003, and April 28, 2002		F-6
Notes to Consolidated Financial Statements		F-7

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Roadhouse Grill, Inc. and Subsidiaries as of April 24, 2005 and April 25, 2004 and the consolidated results of their operations and their consolidated cash flows for the fifty-two weeks ended April 24, 2005, April 25, 2004 and April 27, 2003, in conformity with accounting principles generally accepted in the United States of America.

64/s/ Grant Thornton LLP Miami, Florida June 17, 2005 (except for Note 21 as to which the date is July 5, 2005 and Note 22 as to which the date is August 10, 2005)

~~Table of Contents~~F-1

~~Board~~ROADHOUSE ~~of Directors and Shareholders Roadhouse Grill~~GRILL, ~~Inc~~INC.

WeCONSOLIDATED ~~have~~BALANCE ~~audited the accompanying consolidated balance sheets of Roadhouse~~SHEETS ~~Grill, Inc. and Subsidiaries as of~~ April 2524, ~~2004~~2005 and April ~~27, 2003, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the fifty-two weeks ended April~~ 25, 2004 ($ ~~and~~in ~~April 27~~thousands, ~~2003.~~except ~~These financial~~per ~~statements~~share ~~are the responsibility of the Company’s management. Our~~data) ~~responsibility is to express an opinion on these financial statements based on our audit.~~

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


	April 24, 2005			April 25, 2004
Assets
Current assets:
Cash and cash equivalents	$	810		$	1,181
Accounts receivable, net of allowance for doubtful accounts of $205 and $178 at April 24, 2005 and April 25, 2004, respectively		970			257
Income tax receivable		—			69
Inventory		1,048			1,024
Prepaid expenses		1,062			1,273

Total current assets		3,890			3,804

Property & equipment, net of accumulated depreciation of $52,804 and $54,221 at April 24, 2005 and April 25, 2004, respectively		24,593			49,512
Asset held for sale		465			800
Intangible assets, net of accumulated amortization of $861 and $816 at April 24, 2005 and April 25, 2004, respectively		1,801			1,846
Other assets		965			1,352

Total assets	$	31,714		$	57,314


Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	5,443		$	4,557
Accrued expenses		6,093			6,710
Restructuring accrual		—			159
Unearned revenue		2,044			863
Current portion of long-term debt		2,259			4,448
Current portion of capital lease obligations		1,325			1,119

Total current liabilities		17,164			17,856

Long-term debt		3,338			28,218
Capital lease obligations		3,275			4,279
Long term portion of unearned revenue		2,207			225
Non-current deferred rent		3,344			1,928

Total liabilities		29,328			52,506

Shareholders’ equity:
Common stock $0.03 par value. Authorized 35,000,000 shares; issued and outstanding 29,220,663 shares		877			877
Additional paid-in capital		55,972			55,953
Accumulated deficit		(54,463	)		(52,022	)

Total shareholders’ equity		2,386			4,808

Total liabilities and shareholders’ equity	$	31,714		$	57,314

In The ~~our~~accompanying ~~opinion,~~notes ~~the~~are ~~financial~~an ~~statements~~integral ~~referred~~part toof ~~above~~these ~~present fairly, in all material respects, the~~ consolidated financial ~~position of Roadhouse Grill, Inc~~statements. ~~and Subsidiaries as of April 25, 2004 and April 27, 2003 and the~~ consolidated results of their operations and their consolidated cash flows for the fifty-two weeks ended April 25, 2004 and April 27, 2003, in conformity with accounting principles generally accepted in the United States of America.

~~/s/ Grant Thornton LLP~~F-2 ~~Miami, Florida June 25, 2004 (except for Note 20, as to which the date is August 6, 2004)~~

~~Table~~ROADHOUSE ofGRILL, ~~Contents~~INC.

~~ROADHOUSE~~CONSOLIDATED ~~GRILL,~~STATEMENTS ~~INC.~~OF OPERATIONS ~~CONSOLIDATED~~For ~~BALANCE~~the ~~SHEETS~~ Fifty-Two Weeks Ended April 24, 2005, April 25, 2004, and April 27, 2003 ($ in thousands, except per share data)

	April 25, 2004			April 27, 2003
	April 24, 2005			April 25, 2004			April 27, 2003
Assets
Total revenues	$	129,207		$	139,380		$	140,924
Current assets:
Restaurant operating expenses:
Cash and cash equivalents	$	1,181		$	2,956
Cost of restaurant sales:
Accounts receivable, net of allowance for doubtful accounts of $178 and $195 at April 25, 2004 and April 27, 2003, respectively		257			337
Food and beverage		46,082			49,271			47,439
Income tax receivable		69			741
Labor and benefits		41,829			45,078			47,860
Inventory		1,024			1,163
Occupancy and other		34,010			33,483			34,567
Prepaid expenses		1,273			2,196
Pre-opening expenses		—			120			124
Total current assets		3,804			7,393
Total cost of restaurant sales		121,921			127,952			129,990
Property & equipment, net of accumulated depreciation of $54,221 and $49,741 at April 25, 2004 and April 27, 2003, respectively		49,512			60,024
Depreciation and amortization		6,197			7,078			7,460
Asset held for sale		800			800
General and administrative expenses		6,775			6,506			6,956
Intangible assets, net of accumulated amortization of $816 and $772 at April 25, 2004 and April 27, 2003, respectively		1,846			1,890
Asset impairment		1,768			964			5,854
Other assets		1,352			1,197
Restructuring charge		—			(96	)		46
Total assets	$	57,314		$	71,304
Reorganization expenses		—			—			2,726
Liabilities and Shareholders’ Equity
Total operating expenses		136,661			142,404			153,032
Current liabilities:
Operating loss		(7,454	)		(3,024	)		(12,108	)
Accounts payable	$	4,557		$	3,630
Other income (expense) :
Accrued expenses		7,033			8,242
(Loss) gain on sale/disposal of fixed assets		(464	)		282			75
Restructuring accrual		159			579
Gain on extinguishment of debt		7,102			—			—
Unearned revenue		540			72
Interest expense, net		(1,550	)		(3,236	)		(2,289	)
Current portion of long-term debt		4,448			5,616
Total other income (expense)		5,088			(2,954	)		(2,214	)
Current portion of capital lease obligations		1,119			1,335
Loss before income taxes and extraordinary gain		(2,366	)		(5,978	)		(14,322	)
Total current liabilities		17,856			19,474
Income tax expense (benefit)		75			(1	)		(1,241	)
Long-term debt		28,218			33,943
Loss before extraordinary gain		(2,441	)		(5,977	)		(13,081	)
Capital lease obligations		4,279			5,379
Extraordinary gain		—			—			1,838
Other non-current liabilities		2,153			1,723
Net loss	$	(2,441	)	$	(5,977	)	$	(11,243	)
Total liabilities		52,506			60,519
Shareholders’ equity:
Common stock $0.03 par value. Authorized 35,000,000 shares; issued and outstanding 29,220,663 as of April 25, 2004 and April 27, 2003		877			877
Additional paid-in capital		55,953			55,953
Accumulated deficit		(52,022	)		(46,045	)
Total shareholders’ equity		4,808			10,785
Total liabilities and shareholders’ equity	$	57,314		$	71,304

~~The accompanying notes are an integral part of these consolidated financial~~F-3 ~~statements.~~


	April 24, 2005			April 25, 2004			April 27, 2003
Basic earnings per share:

Loss before extraordinary gain	$	(0.08	)	$	(0.20	)	$	(0.65	)


Extraordinary gain	$	—		$	—		$	0.09


Net loss	$	(0.08	)	$	(0.20	)	$	(0.56	)


Diluted earnings per share:

Loss before extraordinary gain	$	(0.08	)	$	(0.20	)	$	(0.65	)


Extraordinary gain	$	—		$	—		$	0.09


Net loss	$	(0.08	)	$	(0.20	)	$	(0.56	)


Weighted average common shares and share equivalents outstanding-assuming dilution		29,220,663			29,220,663			20,000,744

~~ROADHOUSE~~The ~~GRILL,~~accompanying ~~INC. CONSOLIDATED~~notes ~~STATEMENTS~~are OFan ~~OPERATIONS For~~integral ~~the~~part ~~Fifty-Two~~of ~~Weeks~~these ~~Ended~~consolidated ~~April 25,~~financial ~~2004, April 27, 2003, and April 28, 2002~~statements. ~~($ in thousands, except per share data)~~

	April 25, 2004			April 27, 2003			April 28, 2002
Total revenues	$	139,380		$	140,924		$	158,982
Restaurant operating expenses:
Cost of restaurant sales:
Food and beverage		49,271			47,439			55,066
Labor and benefits		45,078			47,860			51,817
Occupancy and other		33,483			34,567			37,580
Pre-opening expenses		120			124			477
Total cost of restaurant sales		127,952			129,990			144,940
Depreciation and amortization		7,078			7,460			8,991
General and administrative expenses		6,506			6,956			9,106
Asset impairment		964			5,854			7,507
Restructuring charge		(96	)		46			5,086
Reorganization expenses		—			2,726			876
Total operating expenses		142,404			153,032			176,506
Operating loss		(3,024	)		(12,108	)		(17,524	)
Other (expense) income :
Gain (loss) on sale of fixed assets		282			75			(60	)
Interest expense, net		(3,236	)		(2,289	)		(3,810	)
Total other expense		(2,954	)		(2,214	)		(3,870	)
Loss before income taxes and Extraordinary gain		(5,978	)		(14,322	)		(21,394	)
Income tax (benefit) expense		(1	)		(1,241	)		49
Loss before extraordinary gain		(5,977	)		(13,081	)		(21,443	)
Extraordinary gain		—			1,838			—
Net loss		($5,977	)		($11,243	)		($21,443	)

F-4

~~Table~~ROADHOUSE ofGRILL, ~~Contents~~INC.

	April 25, 2004			April 27, 2003			April 28, 2002
Basic earnings per share:
Loss before extraordinary gain	$	(0.20	)	$	(0.65	)	$	(2.21	)
Extraordinary gain	$	—		$	0.09		$	—
Net loss	$	(0.20	)	$	(0.56	)	$	(2.21	)
Diluted earnings per share:
Loss before extraordinary gain	$	(0.20	)	$	(0.65	)	$	(2.21	)
Extraordinary gain	$	—		$	0.09		$	—
Net loss	$	(0.20	)	$	(0.56	)	$	(2.21	)
Weighted average common shares and share equivalents
Outstanding-assuming dilution		29,220,663			20,000,744			9,708,741

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the Fifty-Two Weeks Ended April 24, 2005, April 25, 2004, and April 27, 2003
($ in thousands)

The accompanying notes are an integral part of these consolidated financial statements.


	Common Stock				Additional Paid-in		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance April 28, 2002		9,708,741	$	291	$	50,039	$	(34,802	)	$	15,528
Issuance of additional shares		19,511,922		586		5,914		—			6,500
Net loss		—		—		—		(11,243	)		(11,243	)


Balance April 27, 2003		29,220,663		877		55,953		(46,045	)		10,785
Net loss		—		—		—		(5,977	)		(5,977	)

Balance April 25, 2004		29,220,663		877		55,953		(52,022	)		4,808
Net loss		—		—		—		(2,441	)		(2,441	)

Vesting of stock options		—		—		19		—			19


Balance April 24, 2005		29,220,663	$	877	$	55,972	$	(54,463	)	$	2,386

~~F-4~~The accompanying notes are an integral part of these consolidated financial statements.

~~Table of Contents~~F-5

	Common Stock				Additional Paid-in		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance April 29, 2001		9,708,741	$	291	$	50,039	$	(13,359	)	$	36,971
Net loss		—		—		—		(21,443	)		(21,443	)
Balance April 28, 2002		9,708,741		291		50,039		(34,802	)		15,528
Issuance of additional shares		19,511,922		586		5,914		—			6,500
Net loss		—		—		—		(11,243	)		(11,243	)
Balance April 27, 2003		29,220,663		877		55,953		(46,045	)		10,785
Net loss		—		—		—		(5,977	)		(5,977	)
Balance April 25, 2004		29,220,663	$	877	$	55,953	$	(52,022	)	$	4,808

ROADHOUSE GRILL, INC.

~~The~~CONSOLIDATED ~~accompanying~~STATEMENTS ~~notes~~OF ~~are~~CASH anFLOWS For ~~integral~~the ~~part~~Fifty-Two ofWeeks ~~these~~Ended ~~consolidated~~April 24, ~~financial~~2005, April 25, 2004, and April 27, 2003 ~~statements.~~($ in thousands)

F-5


	April 24,			April 25,			April 27,
	2005			2004			2003
Cash flows from operating activities:
Net loss	$	(2,441	)	$	(5,977	)	$	(11,243	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		6,197			7,078			7,460
Asset impairment		1,768			964			5,854
Cash used for reorganization items		(6	)		(179	)		(2,519	)
Restructuring charge		—			(96	)		46
Reorganization expenses		—			—			2,726
Stock option expense		19			—			—
Forgiveness of debt due to reorganization		—			—			(1,838	)
Net loss on sale/disposal of assets		464			(282	)		(75	)
Gain on extinguishment of debt		(7,102	)		—			—
Provision for bad debt		27			14			6

Changes in assets and liabilities:
(Increase) decrease in accounts receivable		(713	)		66			343
Decrease (increase) in income tax receivable		69			672			(864	)
(Increase) decrease in inventory		(24	)		139			142
Decrease in prepaid expenses		211			463			394
(Increase) decrease in other assets		(139	)		(248	)		506
Increase in accounts payable		886			1,031			682
Decrease in restructuring accrual		(126	)		(82	)		(874	)
Increase (decrease) in unearned revenue		1,545			693			(30	)
Increase (decrease) in accrued expenses		774			(473	)		454

Net cash provided by operating activities		1,409			3,783			1,170


Cash flows from investing activities:
Proceeds from sales of property and equipment		20,575			4,502			782
Purchases of property and equipment		(904	)		(1,570	)		(2,194	)

Net cash provided by (used in) investing activities		19,671			2,932			(1,412	)


Cash flows from financing activities:
Proceeds from issuance of common stock		—			—			5,000
Repayment of long-term debt		(19,539	)		(7,174	)		(4,113	)
Payments on capital lease obligations		(1,912	)		(1,316	)		(882	)

Net cash (used in) provided by financing activities		(21,451	)		(8,490	)		5


Decrease in cash and cash equivalents		(371	)		(1,775	)		(237	)
Cash and cash equivalents at beginning of year		1,181			2,956			3,193

Cash and cash equivalents at end of year	$	810		$	1,181		$	2,956


Supplementary disclosures:
Interest paid	$	1,483		$	3,219		$	1,994

Income taxes paid	$	13		$	29		$	50

~~Table~~The accompanying notes are an integral part of ~~Contents~~these consolidated financial statements.

~~ROADHOUSE GRILL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Fifty~~F-~~Two Weeks Ended April 25, 2004, April 27, 2003, and April 28, 2002~~6 ~~($ in thousands)~~

	April 25,			April 27,			April 28,
	2004			2003			2002
Cash flows from operating activities:
Net loss	$	(5,977	)	$	(11,243	)	$	(21,443	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		7,078			7,460			8,991
Asset impairment		964			5,854			7,507
Cash used for reorganization items		(179	)		(2,519	)		(1,187	)
Restructuring charge		(96	)		46			5,086
Reorganization expenses		—			2,726			876
Forgiveness of debt due to reorganization		—			(1,838	)		—
Net (gain) loss on sale/disposal of assets		(282	)		(75	)		60
Provision for bad debt		14			6			336
Cash used for store closings		—			—			(404	)
Changes in assets and liabilities:
Decrease in accounts receivable		66			343			1,037
Decrease (increase) in income tax receivable		672			(864	)		2,236
Decrease in inventory		139			142			157
Decrease (increase) in prepaid expenses		463			394			(548	)
(Increase) decrease in other assets		(248	)		506			219
Increase in accounts payable		1,031			682			862
(Decrease) increase in restructuring accrual		(82	)		(874	)		4,691
(Decrease) in notes payable to vendor		—			—			(1,117	)
Increase (decrease) in unearned revenue		693			(30	)		(1	)
(Decrease) increase in accrued expenses		(473	)		454			(904	)
Net cash provided by operating activities		3,783			1,170			6,454
Cash flows from investing activities:
Proceeds from sales of property and equipment		4,502			782			—
Purchases of property and equipment		(1,570	)		(2,194	)		(2,619	)
Net cash provided by (used in) investing activities		2,932			(1,412	)		(2,619	)
Cash flows from financing activities:
Proceeds from issuance of common stock		—			5,000			—
Repayment of long-term debt		(7,174	)		(4,113	)		(1,448	)
Payments on capital lease obligations		(1,316	)		(882	)		(776	)
Net cash (used in) provided by financing activities		(8,490	)		5			(2,224	)
(Decrease) increase in cash and cash equivalents		(1,775	)		(237	)		1,611
Cash and cash equivalents at beginning of year		2,956			3,193			1,582
Cash and cash equivalents at end of year	$	1,181		$	2,956		$	3,193
Supplementary disclosures:
Interest paid	$	3,219		$	1,994		$	2,486
Income taxes paid	$	29		$	50		$	40

~~The~~ROADHOUSE ~~accompanying~~GRILL, ~~notes are an integral part of these consolidated financial statements~~INC.

~~F-6~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS APRIL 24, 2005, APRIL 25, 2004 AND APRIL 27, 2003

~~Table~~(1) BASIS ofOF ~~Contents~~PRESENTATION AND DESCRIPTION OF BUSINESS

~~ROADHOUSE~~ Roadhouse ~~GRILL~~Grill, ~~INC~~Inc. (the “Company”) was incorporated under the laws of the state of Florida ~~NOTES~~in TO1992. ~~CONSOLIDATED~~The ~~FINANCIAL~~principal ~~STATEMENTS~~business of the Company is the operation of full service specialty restaurants. The Company has also granted franchises and licenses to operate restaurants under the “Roadhouse Grill” name. The Company opened its first restaurant in Pembroke Pines, Florida (the greater Ft. Lauderdale area) in 1993. As of April 2524, ~~2004~~2005, ~~April 27~~there were 68 company-owned Roadhouse Grill restaurants, ~~2003~~33 of which are located in Florida and the balance of which are located in Alabama, Arkansas, Georgia, Louisiana, Mississippi, New York, North Carolina, Ohio and South Carolina. Subsequent to April 2824, ~~2002~~2005, one restaurant was closed upon the termination of the related lease.

~~(1)~~ The ~~BASIS~~Company OFoperates ~~PRESENTATION~~on ~~AND~~a ~~DESCRIPTION~~fifty-two OFor ~~BUSINESS~~fifty-three week fiscal year. Each fiscal quarter consists of thirteen weeks, except in the case of a fifty-three week year, in which case the fourth fiscal quarter consists of fourteen weeks.

~~Roadhouse~~ The ~~Grill,~~accompanying ~~Inc.~~consolidated ~~(the~~financial ~~“Company”)~~statements ~~was~~include ~~incorporated under~~ the ~~laws~~accounts of ~~the~~ ~~state of Florida in 1992. The principal business of~~ the Company ~~is the operation of full service specialty restaurants. The Company has also granted franchises~~ and ~~licenses to operate restaurants under the “Roadhouse Grill” name. The Company opened~~ its ~~first restaurant in Pembroke Pines, Florida (the~~ ~~greater Ft. Lauderdale area) in 1993. As of April 25, 2004, there were 69 company~~wholly-owned ~~Roadhouse~~subsidiaries. ~~Grill~~All ~~restaurants,~~significant 34intercompany oftransactions ~~which are located in Florida~~ and ~~the~~balances ~~balance~~have ~~of which are located in Alabama, Arkansas, Georgia, Louisiana,~~been ~~Mississippi, New York, North Carolina, Ohio and South Carolina~~eliminated.

The Company ~~operates~~emerged onfrom a ~~fifty-two~~Chapter 11 orbankruptcy ~~fifty-three~~(see ~~week~~Note ~~fiscal~~2 ~~year~~below) in September 2002. ~~Each~~While ~~fiscal~~in ~~quarter~~bankruptcy, ~~consists~~the Company applied the provisions of ~~thirteen~~SOP ~~weeks~~90-7, ~~except~~“Financial Reporting by Entities in Reorganization Under the ~~case~~Bankruptcy ofCode”, awhich ~~fifty-three~~does not significantly change the application of ~~week~~accounting ~~year,~~principles generally accepted in ~~which~~the ~~case~~United States; however, it does require that the financial ~~fourth~~statements ~~fiscal~~for ~~quarter~~periods ~~consists~~including and subsequent to the Chapter 11 bankruptcy distinguish transactions and events that are directly associated with the reorganization from those transactions that are the result of ~~fourteen~~ongoing ~~weeks~~operations of the business. The holders of the Company’s common stock representing in excess of 50 percent of the voting shares immediately prior to confirmation of the Plan of Reorganization continued to own in excess of 50 percent following confirmation of the Plan of Reorganization. As a result, the Company did not adopt “fresh start” accounting upon its emergence from bankruptcy in accordance with SOP 90-7.

The ~~accompanying~~Company’s ~~consolidated~~ability ~~financial~~to ~~statements~~meet ~~include~~its operating expenses as they come due, including its ability to service its debt and pay its capital and operating lease obligations, is dependent on the Company’s ~~accounts~~meeting its 2006 business plan, of which there can be no assurance. In that regard, the Company recently obtained a loan from its majority shareholder (Note 22) and collected the proceeds of an outstanding insurance claim (Note 21). The Company ~~and~~is also in the process of selling a closed property in an effort to raise additional working capital. Assuming that the Company meets all material respects of its ~~wholly-owned~~2006 ~~subsidiaries~~business plan, management believes that the Company will have sufficient working capital to meet its obligations during the 2006 fiscal year. ~~All~~Factors that could cause the Company to not meet its business plan could include unforseen events such as material food cost increases, significant ~~intercompany~~decreases in customer volume, hurricanes or other unforseen factors. However, if cash generated from operations is ~~transactions~~insufficient to fund the Company’s financial commitments and ~~balances~~working capital requirements, it will have ~~been~~to ~~eliminated~~obtain additional capital from debt or equity financing sources. There can be no assurance that additional debt and/or equity financing will be available on terms acceptable to the Company, or at all. In the event that the Company is unable to secure additional needed financing, it would likely have a material adverse effect upon the Company’s business, results of operations or financial condition.

~~While in a Chapter 11 bankruptcy proceeding (see Note 2 below), the Company applied the provisions of SOP 90~~F-7~~, “Financial Reporting by Entities in~~ Reorganization Under the Bankruptcy Code”, which does not significantly change the application of accounting principles generally accepted in the United States; however, it does require that the financial statements for periods including and subsequent to the Chapter 11 bankruptcy distinguish transactions and events that are directly associated with the reorganization from those transactions that are the result of ongoing operations of the business. As discussed in Note 2, the holders of the Company’s common stock representing in excess of 50 percent of the voting shares immediately prior to confirmation of the Plan of Reorganization continued to own in excess of 50 percent following confirmation of the Plan of Reorganization. As a result, the Company did not adopt “fresh start” accounting upon its emergence from bankruptcy in accordance with SOP 90-7.

(2) COMPLETED PROCEEDINGS UNDER CHAPTER 11 OF THE BANKRUPTCY CODE

On January 18, 2002 (the “Petition Date”), an involuntary petition ~~(the “Involuntary Petition”)~~ for relief under Chapter 11 of the United States ~~Bankruptcy~~ ~~Code (the “~~Bankruptcy Code”) was filed against the Company by certain of its creditors, all of which were affiliated with one another, in the United States Bankruptcy Court for the Southern District of Florida (~~collectively~~the “Court”). Ultimately, the Company decided to consent to the entry of an order for relief and on April 16, 2002, the Court entered an order for relief and the Company filed its proposed Chapter 11 plan of reorganization and its disclosure statement in support of its plan of reorganization. On August 23, 2002, the Court issued its Order Confirming Debtor’s Second Amended and Restated Chapter 11 Plan of Reorganization, as Modified. In November 2003, the Court issued the final decree officially closing the Chapter 11 case.

~~F-7~~ The Confirmed Plan of Reorganization became effective on September 20, 2002. Under the Confirmed Plan of Reorganization, the Company received an infusion of new capital of $5.0 million in exchange for 13,888,889 shares of the authorized but unissued common stock of the Company. Additionally, pursuant to the Confirmed Plan of Reorganization, the Company’s majority shareholder, Berjaya Group (Cayman) Limited, received, in full satisfaction of the principal amount of a $1.5 million loan to the Company, 4,166,667 shares of the Company’s authorized but unissued common stock at $0.36 per share. Unpaid interest, approximating $0.1 million at April 24, 2005, remains outstanding on this note. After issuance of the additional shares, the existing shareholders owned an aggregate of 11,165,107 shares of the outstanding common stock, representing 38.21% of the outstanding stock of the reorganized Company. The total number of shares of common stock outstanding after effecting the Confirmed Plan of Reorganization was 29,220,663.

~~Table~~ Liabilities through the date the Company emerged from bankruptcy, September 20, 2002, which were incurred prior to April 16, 2002 were adjusted during fiscal year 2003 to the amounts to be paid pursuant to the Confirmed Plan of ~~Contents~~Reorganization. As a result, the Company recorded an extraordinary gain relating to the early extinguishment of debt in the consolidated statements of operations in the amount of $1.8 million for the fiscal year ended April 27, 2003. This gain resulted primarily from obligations to pay lease payments that were stayed while the Company was in bankruptcy and other obligations that were canceled as a result of the bankruptcy proceeding. In addition, on the Petition Date, the Company stopped accruing interest on all unsecured pre-petition debt in accordance with SOP 90-7. Contractual interest expense not accrued or recorded on certain pre-petition debt totaled $0.9 million.

~~“Petitioning~~ Reorganization ~~Creditors”),~~items inrepresent ~~the~~amounts ~~United~~incurred ~~States~~as ~~Bankruptcy~~a ~~Court~~result ~~for the Southern District~~ of ~~Florida (~~the ~~“Court”).~~Chapter 11 ~~Prior~~proceedings ~~to the Petition Date, the~~in ~~Company~~accordance ~~had~~with ~~been~~SOP ~~experiencing~~90-7. ~~significant~~The ~~cash~~Company ~~flow~~incurred ~~problems~~$3.6 million ~~primarily resulting from the opening~~ of 31expenses ~~new~~relating ~~restaurants~~to ~~in the prior three years~~its ~~combined~~reorganization, ~~with~~including a$2.7 million ~~net~~and ~~loss of~~ $150.9 million, inrespectively, during fiscal year ~~2001~~2003 and ~~a net loss of~~ ~~$21.4 million in~~ fiscal year 2002. ~~Prior~~These toreorganization ~~the~~expenses ~~filing~~primarily ofinclude ~~the~~fees ~~Involuntary Petition~~for legal, ~~the Company had been in negotiations with the Petitioning Creditors~~accounting, consulting, and ~~its~~outside ~~other major creditors in an effort to effect an out-of-court restructuring of its liabilities~~services.

In response to the filing of the Involuntary Petition, the Company initially filed a motion requesting the Court to abstain from taking jurisdiction over the Company to allow out-of-court restructuring efforts to continue. Ultimately, however, the Company decided to consent to the entry of an order for relief in the Chapter(3) 11SUMMARY ~~case,~~OF ~~provided~~SIGNIFICANT ~~that~~ACCOUNTING ~~the order would not~~POLICIES ~~be entered until the Company had an opportunity to prepare a Chapter 11 plan of reorganization.~~

OnACCOUNTING ~~April 16,~~FOR ~~2002, the Court entered an order for relief and the Company~~LEASES filed its proposed Chapter 11 plan of reorganization and its disclosure statement in support of its plan of reorganization. Subsequent to the entry of the order for relief, the Company temporarily operated its businesses as a debtor-in-possession pursuant to Chapter 11 of the Bankruptcy Code and concentrated its efforts on emerging from Chapter 11 as quickly as possible.

In ~~its~~response ~~plan~~to ofrecent ~~reorganization,~~accounting ~~the~~adjustments ~~Company~~that ~~classified~~have ~~the~~been ~~claims~~recorded ofby ~~its creditors~~restaurant and ~~interests of its equity security holders and provided for the~~other ~~treatment~~companies ofin ~~such~~regards ~~claims and interests. Under the Bankruptcy Code, various classes of claims and interests were entitled~~ to ~~vote~~their onaccounting ~~whether~~for ~~to accept or reject the plan of reorganization. On June 12~~leases, ~~2002,~~ the Company ~~filed Debtor’s~~conducted ~~Second~~a ~~Amended~~review ~~and Restated Chapter 11 Plan~~ of ~~Reorganization, as~~its ~~Modified~~accounting ~~(the~~policies ~~“Plan”)~~ and ~~Debtor’s~~historical ~~Second~~financial ~~Amended and Restated Disclosure Statement in Support of Chapter 11 Plan of Reorganization, as Modified (the “Disclosure Statement”)~~information. ~~The Court conducted a hearing on June 12~~Historically, ~~2002~~rent ~~to consider~~expense ~~approval~~has ofbeen ~~the Disclosure Statement. On June 20, 2002, the Court~~recorded ~~issued~~on ~~an order approving the Disclosure Statement, authorizing the Disclosure Statement, Plan and ballot to be disseminated to creditors and equity security holders and scheduling~~ a ~~hearing on confirmation of the Plan for August 21,~~straight-line ~~2002.~~

~~On June 25, 2002, a hearing was held on the motion of the Petitioning~~F-8 Creditors to terminate the exclusivity period within which only the Company could file a plan of reorganization and to delay the hearing on confirmation of the Plan. On June 26, 2002, the Court terminated exclusivity but refused to postpone the hearing on confirmation of the Plan.

Ayman Sabi

President and Chief Executive Officer

Michael C. Brant

Executive Vice President of Finance and Chief Financial Officer

Alain K.K. Lee

Executive Vice President and Corporate Secretary

Mark Rogers

Vice President of Operations

Filing Compare · ROADHOUSE GRILL INC