SECURITIES AND EXCHANGE COMMISSION ~~WASHINGTON, D.C. 20549~~

WASHINGTON, D.C. 20549

FORM 10-K

(MARK ONE)

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

FOR THE FISCAL YEAR ENDED DECEMBER 3127, ~~2001~~ 2004

o	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 1-9684

~~CHART HOUSE ENTERPRISES~~AM-CH, INC. ~~(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)~~

~~DELAWARE~~ (~~STATE~~EXACT ORNAME ~~OTHER JURISDICTION~~ OF ~~INCORPORATION~~REGISTRANT ORAS ~~ORGANIZATION)~~SPECIFIED ~~33-0147725~~IN ~~(I.R.S. EMPLOYER IDENTIFICATION NO.~~ITS CHARTER) ~~640 North LaSalle, Suite 295 Chicago, Illinois 60610 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)~~

Registrant's telephone number including area code: (312) 266-1100

DELAWARE		33-0147725
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)		(I.R.S. EMPLOYER IDENTIFICATION NO.)

2 North Riverside, 7^th Floor

Chicago, Illinois 60606

(ADDRESS OF PRINCIPAL EXECUTIVE

OFFICES, INCLUDING ZIP CODE)

Registrant’s telephone number including area code: (312) 466-3966

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: ~~Common Stock, par value $.01 per share Series A Senior Convertible Redeemable Preferred Stock, par value $1.00 per share~~

INDICATE BYSeries CHECKA MARKSenior IFConvertible DISCLOSURERedeemable OFPreferred DELINQUENT FILERS PURSUANT TO ITEM 405 OF REGULATION S-K ((S) 229.405 OF THIS CHAPTER) IS NOT CONTAINED HEREINStock, ANDpar WILLvalue NOT BE CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K$1. o00 per share

~~The aggregate~~INDICATE ~~market~~BY ~~value~~CHECK ofMARK WHETHER ~~the~~REGISTRANT ~~voting~~(1) ~~and~~HAS ~~non-voting~~FILED ~~common~~ALL ~~equity~~REPORTS ~~held~~REQUIRED byTO ~~non-affiliates~~BE ofFILED ~~the~~BY ~~registrant~~SECTION ~~(based upon the per share closing sale price of~~13 ~~$6.00~~OR on15(d) ~~March 20,~~OF ~~2002,~~THE ~~and~~SECURITIES ~~for~~EXCHANGE ~~the~~ACT ~~purpose~~OF of1934 ~~this~~DURING ~~calculation~~THE ~~only,~~PRECEDING ~~the~~12 ~~assumption~~MONTHS (OR ~~that~~FOR ~~all~~SUCH ofSHORTER ~~the~~PERIOD ~~registrant's~~THAT ~~directors~~THE ~~and~~REGISTRANT ~~executive~~WAS ~~officers~~REQUIRED ~~are~~TO ~~affiliates)~~FILE ~~was approximately~~SUCH ~~$7.6 million.~~REPORTS), ~~The~~AND ~~number~~(2) ofHAS ~~shares~~BEEN ~~outstanding~~SUBJECT ofTO ~~common~~SUCH ~~stock~~FILING asREQUIREMENTS ofFOR ~~March 20,~~THE ~~2002~~PAST ~~was 1,978,316~~90 DAYS. YES ý NO o

INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405 OF REGULATION S-K ((S) 229.405 OF THIS CHAPTER) IS NOT CONTAINED ~~DOCUMENTS~~HEREIN, AND WILL NOT BE CONTAINED, TO THE BEST OF REGISTRANT’S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K. ý

~~Part III—"Item 10.~~INDICATE ~~Directors~~BY ~~and~~CHECK ~~Executive~~MARK ~~Officers~~WHETHER ofTHE ~~the Registrant," "Item 11. Executive Compensation," "Item 12. Security Ownership of Certain Beneficial Owners~~REGISTRANT ~~and~~IS ~~Management,"~~AN ~~and~~ACCELERATED ~~"Item 13.~~FILER ~~Certain~~(AS ~~Relationships~~DEFINED ~~and~~IN ~~Related~~EXCHANGE ~~Transactions"~~ACT ~~are~~RULE ~~herein~~12b-2 ~~incorporated~~OF ~~by reference to the Registrant's Proxy Statement for its 2002 Annual Meeting of~~THE ~~Stockholders~~ACT). YES o NO ý

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant ~~PART~~(based I upon the per share closing sale price of $.83 on June 28, 2004, and for the purpose of this calculation only, the assumption that all of the registrant’s directors and executive officers are affiliates) was approximately $1.6 million. The number of shares outstanding of common stock as of March 30, 2005 was 2,005,131.

~~This~~DOCUMENTS ~~Annual~~INCORPORATED ~~Report~~BY on Form 10-K and the documents incorporated herein by reference contain forward-looking statements that have been made pursuant to provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent the Company's expectations or beliefs concerning future events, including any statements regarding: future sales and gross profit percentages, the continuation of historical trends, the sufficiency of the Company's cash balances, and cash generated from operating, financing and/or investing activities for the Company's future liquidity and capital resource needs. Without limiting the foregoing, the words "believes," "intends," "projects," "plans," "expects," "anticipates," and similar expressions are intended to identify forward-looking statements. The Company cautions that these statements are further qualified by important economic and competitive factors that could cause actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, risks of the restaurant industry, an industry with many well-established competitors with greater financial and other resources than the Company, and the impact of changes in consumer trends, employee availability, and cost increases. In addition, the Company's ability to expand is dependent upon various factors, such as the availability of attractive sites for new restaurants, the ability to negotiate suitable lease terms, the ability to generate or borrow funds to develop new restaurants, the ability to obtain various government permits and licenses, and the recruitment and training of skilled management and restaurant employees. Accordingly, such forward-looking statements do not purport to be predictions of future events or circumstances and may not be realized. REFERENCE

~~ITEM 1~~None. ~~BUSINESS.~~

~~GENERAL~~ CONTENT OUTLINE FOR COMPANY’S

~~Chart~~2004 ~~House~~FORM ~~Enterprises, Inc. (the "Company") operates full~~10-~~service~~K seafood and steakhouse restaurants located predominately throughout the East and West coasts of the United States. At December 31, 2001, the Company's restaurants included 38 seafood oriented Chart House restaurants, six Angelo and Maxie's Steakhouses, and one Peohe's, a seafood restaurant with a more extensive menu. The Company was incorporated in Delaware in 1985. The Company's headquarters are located in Chicago, Illinois. FILING

~~FINANCIAL~~TABLE ~~CONDITION~~ OF CONTENTS

The Company has experienced net losses in each of the last three fiscal years. These results, in conjunction with an extensive restaurant renovation and expansion program, have severely strained the Company's capital resources. At December 31, 2001, the Company had in excess of $25 million of senior, secured debt that matures on April 30, 2002. Since December 2001, the Company has been conducting a review of strategic alternatives with a principal focus on identifying appropriate sources of capital to address the debt maturity matter. This process has identified a number of capital sources, several of whom have expressed possible interest in making a significant investment in the Company. Although no definitive agreements have been reached with any of these potential investors, and no assurances can be given, management continues to believe that this process will be successful.

PART I
ITEM 1.	BUSINESS

ITEM 2.	PROPERTIES

ITEM 3.	LEGAL PROCEEDINGS

ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

PART II
ITEM 5.	MARKET FOR THE REGISTRANT’S COMMON EQUITY RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

ITEM 6	SELECTED FINANCIAL DATA

ITEM 7	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9A	CONTROLS AND PROCEDURES

ITEM 9B.	OTHER INFORMATION

PART III
ITEM 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

ITEM 11.	EXECUTIVE COMPENSATION

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

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES

PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

SIGNATURES

In the event the Company is not able to obtain sufficient capital by April 30, 2002 to retire the senior, secured debt, the lenders have the right to foreclose on their collateral. Alternatives to foreclosure include, among others, extension of the maturity date or a filing for reorganization by the Company under the Federal Bankruptcy Code. While no assurances can be given, management believes that the Company will be able to continue to operate its restaurants and that the debt maturity matter will be satisfactorily resolved. 2

2PART I

~~CONCEPTS~~ This Annual Report on Form 10-K and the documents incorporated herein by reference contain forward-looking statements that have been made pursuant to provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent the Company’s expectations or beliefs concerning future events, including any statements regarding: future sales and gross profit percentages, the continuation of historical trends, the sufficiency of the Company’s cash balances, and cash generated from operating, financing and/or investing activities for the Company’s future liquidity and capital resource needs. Without limiting the foregoing, the words “believes,” “intends,” “projects,” “plans,” “expects,” “anticipates,” and similar expressions are intended to identify forward-looking statements. The Company cautions that these statements are further qualified by important economic and competitive factors that could cause actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, risks of the restaurant industry, an industry with many well-established competitors with greater financial and other resources than the Company, and the impact of changes in consumer trends, employee availability, and cost increases. Accordingly, such forward-looking statements do not purport to be predictions of future events or circumstances and may not be realized.

~~The Company's operations commenced in 1961 with the opening of the first Chart House restaurant in Aspen, Colorado by a predecessor of the Company. The Company~~ITEM ~~was established in 1985 as a vehicle to acquire the 54 unit Chart House brand from a predecessor, as well as two other concepts subsequently disposed of by the Company~~1. ~~The Chart House brand grew to a peak of 63 domestic units located in 21 states as well as Puerto Rico and the U~~BUSINESS.S. Virgin Islands. In early 1998, the Company began forming a new management team that developed and executed an operational strategy including: disposal of 22 restaurants that did not meet sales and profitability standards, demographic requirements, or geographic fit; completion of a $31 million renovation program during 1998-2000 to remodel the remaining restaurants; re-engineering of the menu to a predominately fresh seafood focus; and enhanced information systems.

At December 31, 2001, there were 38 Chart House restaurants in operation in 17 states located predominately on the East and West coasts. Chart House restaurants are full-service seafood restaurants characterized by a comprehensive menu of eight species of fresh fish at any one time that are the basis for over 40 preparation choices. Chart House restaurants are designed to capture the distinguishing elements of the surrounding area and transform them into the building's exterior architecture and offer an interior design that enhances the Company's seafood-driven value proposition. The restaurant buildings are sensitive to their surroundings, functional in layout, and typically freestanding structures. Each interior room is customized to adopt the textures and colors representative of the geographic location in a contemporary setting accentuated by nautical-themed and action-adventure oriented artwork. Many of the restaurants offer patrons stunning views of the Atlantic ocean, Pacific ocean, area lakes, or mountain ranges. Representative exteriors of Chart House restaurants range from the restored 18th century former office of John Hancock on Boston's Long Wharf to the modern three-tiered glass restaurant in Philadelphia overlooking the Delaware River. GENERAL

~~The Company opened its Peohe's restaurant in January 1988~~AM-CH, inInc. formerly ~~Coronado,~~known ~~California~~as ~~overlooking~~Angelo ~~San Diego Bay~~ and ~~the~~Maxie’s, ~~San Diego city skyline~~Inc. ~~Although~~and ~~similar to the Company's~~ Chart House ~~restaurants~~Enterprises, inInc. (the ~~many respects~~“Company”), ~~Peohe's~~has ~~opened~~sold ~~under~~or aclosed ~~different~~all ~~name~~of init’s ~~part~~restaurants toand ~~minimize~~has ~~confusion~~no ~~and~~ongoing business ~~competition~~operations. In accordance with the ~~other~~stockholder ~~nearby~~approved ~~Chart~~“Plan ~~House~~of ~~restaurants~~Dissolution”, ~~and~~the ~~also~~Company tohas ~~provide~~filed ~~Chart House~~a ~~management~~certificate aof ~~suitable~~dissolution ~~vehicle~~with ~~for~~the ~~experimentation~~State ~~and development~~ of ~~different~~Delaware ~~menu~~on ~~items,~~February ~~restaurant design~~2, 2005 and is ~~operating~~in ~~concepts.~~the ~~Peohe's~~process ~~has~~of awinding ~~more~~up ~~extensive~~its ~~and~~affairs. ~~higher~~The ~~priced~~Company ~~menu,~~was ~~higher~~incorporated ~~level~~in ofDelaware ~~service,~~in ~~and~~1985. The ~~greater~~Company’s headquarters ~~variety~~are oflocated ~~cooking~~in ~~techniques~~Chicago, ~~than the typical Chart House restaurant~~Illinois.

~~In April 1999,~~SALE ~~the~~OF ~~Company~~THE ~~acquired~~CHART ~~the~~HOUSE Angelo and Maxie's Steakhouse in Manhattan, New York and expanded the concept by opening four additional units in 2000 (one of which closed in 2001) and two in 2001. The Angelo and Maxie's concept offers steaks supported by a comprehensive selection of American fare, served in oversized portions at prices lower than competing upscale steakhouses. The Angelo and Maxie's concept appeals to a more diverse group of predominately younger men and women from multiple ethnic backgrounds who use the restaurant for a broader variety of occasions than typical steakhouse users. Each location offers a wide variety of premium cigars and offers customers the opportunity to lease humidor space at the restaurant on an annual basis. The setting is designed to communicate an energetic, fun, and retro 1930's atmosphere that encourages a "see and be seen" environment. The Angelo and Maxie's concept combines the sophistication of the traditional steakhouse with the energy and openness of contemporary fine dining. The restaurants are designed in an art deco-style décor, with warm woodwork reminiscent of Frank Lloyd Wright, including glowing bronzes and contemporary Tiffany light fixtures. Giant murals on the walls, depicting dining and drinking cows, are present in all units and help to reinforce the whimsical, modern feel that the brand represents. Angelo and Maxie's energetic feel and lower price point lends itself to everyday dining, in addition to special occasions. As a result, the concept has a very broad customer base. The acquisition and growth of the Angelo and Maxie's concept created diversification for the Company's predominately seafood operations. BUSINESS

3In 1961, the Company commenced operations with the opening of the first Chart House restaurant in Aspen, Colorado by a predecessor of the Company. The Company was established in 1985 as a vehicle to acquire the 54 unit Chart House brand from a predecessor, as well as two other concepts subsequently disposed of by the Company. The Chart House brand grew to a peak of 63 domestic units located in 21 states as well as Puerto Rico and the U.S. Virgin Islands. The Company also opened its higher-priced Peohe’s restaurant in January 1988, in Coronado, California. In early 1998, the Company began forming a new management team that developed and executed an operational strategy, which included: disposal of restaurants that did not meet sales and profitability standards, demographic requirements, or geographic fit; completion of a $31 million renovation program during 1998-2000 to remodel the remaining restaurants; re-engineering of the menu to a predominately fresh seafood focus; and enhanced information systems.

~~The~~In December ~~annual~~2001, ~~revenue~~the ~~for~~Board ~~each~~of ~~Chart~~Directors ~~House restaurant in operation for all~~ of ~~2001~~the ~~ranged~~Company ~~from~~responded ~~$1.6 million~~ to ~~$10.6 million,~~the ~~with average annual revenues per restaurant of~~recessionary ~~$3.1 million.~~economic ~~The~~environment, ~~annual~~the ~~revenue for each Angelo and Maxie'~~Company’s ~~restaurant~~limited inaccess ~~operation for all of 2001 ranged from $1.6 million~~ to ~~$9.2 million~~capital, ~~with~~and ~~average annual revenues per~~the ~~restaurant~~near-term maturity of ~~$3.9 million.~~the ~~The~~Company’s ~~average~~senior, ~~dinner~~secured ~~check~~debt atby ~~Chart~~retaining ~~House~~a financial ~~restaurants~~advisor ~~was~~to ~~approximately~~initiate ~~$39~~a ~~per~~review ~~person.~~of ~~The~~strategic ~~average~~alternatives, ~~dinner~~including ~~check~~a possible atsale ~~Angelo~~of ~~and~~the ~~Maxie's was approximately $54 per person~~Company.

~~The~~In May 2002, ~~Company's~~the ~~business~~Board isof ~~seasonal~~Directors inauthorized ~~nature,~~the ~~with~~sale ~~revenues~~of the remaining 38 Chart House restaurants and ~~operating~~one ~~income~~Peohe’s ~~for~~restaurant (the ~~second~~“Chart ~~and~~House ~~third~~Business”) ~~quarters~~to ~~greater~~a subsidiary ~~than~~of ina publicly-traded restaurant company (the ~~first~~“Purchaser”). The ~~and~~sale ~~fourth~~received ~~quarters~~the asapproval of the Company ~~benefits~~’s ~~from~~stockholders ~~expanded~~at ~~seating~~a ~~capacity~~special meeting held as of July 30, 2002, and closed on the same ~~generally~~date. At ~~higher~~the ~~level~~special ofmeeting, ~~leisure~~the Company’s ~~travel~~stockholders inalso approved the ~~spring~~change ~~and~~of ~~summer~~the ~~quarters~~Company’s name from Chart House Enterprises, Inc. to Angelo and Maxie’s, Inc. The ~~operating~~Company ~~hours~~received ~~are~~consideration ~~typically~~of approximately ~~5:00 p~~$55.m3 million, consisting of cash and the assumption of approximately $3.1 tomillion ~~11:00 p~~of certain current liabilities.m. The ~~Some~~Company ~~selected~~used a portion of the proceeds to ~~restaurants~~repay ~~are~~all ~~also~~amounts ~~open~~outstanding ~~for~~on ~~lunch~~its senior, secured Revolving Credit and~~/or~~ ~~Sunday~~Term Loan ~~brunch;~~Agreement ~~selected~~(the ~~restaurants~~“Credit ~~also~~Agreement”) ~~offer~~and ~~banquet~~a ~~services.~~subordinated note owed to a related party.

~~Alcoholic beverages~~ANGELO ~~are~~AND ~~available~~MAXIE’S at all locations. The sale of alcoholic beverages accounted for approximately 24% of 2001 revenues generated at the Chart House restaurants, and accounted for approximately 30% of 2001 revenues generated at the Angelo and Maxie's restaurants. STEAKHOUSE

~~EXPANSION~~In ~~STRATEGY~~ April 1999, the Company acquired the Angelo and Maxie’s Steakhouse located at 233 Park Avenue South in New York, New York. The Company expanded the concept by opening four additional restaurants during 2000 located in New York (Midtown), New York, Atlanta, Georgia (subsequently closed in 2001), Washington, DC, and Phoenix, Arizona

The Company's long-term growth strategy includes expanding both the Chart House and Angelo and Maxie's concepts. Toward this end the Company has developed plans and specifications for a prototype Chart House restaurant that could be developed in both urban and suburban locations. Among other things, the prototype capitalizes on the dramatic views with which the Chart House concept has been associated by bringing the view inside the four walls of the restaurant through the use of water walls, aquariums, and nautical theme artwork. The future development of the Angelo and Maxie's concept will be facilitated by the knowledge garnered from the recent development of six steakhouses. Through this development process, the Company has determined the ideal space requirement and seating, lounge, and kitchen layout. In addition, the Company has now refined its operating procedures and menu execution for this concept. 3

~~When identifying~~(subsequently ~~and~~closed ~~developing~~in December ~~future~~2002). The ~~restaurant sites, the~~ Company ~~places~~opened ~~particular~~two additional ~~emphasis~~restaurants onduring a2001 ~~potential~~located ~~site's~~in ~~physical~~West ~~location.~~Palm ~~Trade area demographics~~Beach, ~~traffic volume,~~Florida ~~visibility,~~(subsequently ~~and~~closed ~~accessibility~~in ~~are~~November ~~all~~2004) ~~key performance indicators analyzed by management. Sales~~ and ~~profit~~Reston, ~~projections are then prepared to determine whether the economics of investment are sound~~Virginia. The Company accords great importance to the selection of and coordination with the architect to ensure that the proposed restaurant structure fits the Company's image. Senior management is involved extensively in each facet of the site selection process.

~~The rate~~SALE atOF ~~which~~THE ~~the~~ANGELO ~~Company~~AND ~~can~~MAXIE’S ~~successfully~~BRAND ~~achieve~~AND ~~these~~RELATED ~~expansion~~OPERATING objectives is dependent upon the success of locating acceptable sites, negotiating acceptable lease terms, obtaining requisite governmental permits and approvals, supervising location construction, recruitment and training of qualified personnel, and access to capital. Since the latter part of 2000, the Company's access to expansion capital has been severely limited. The Company's financial condition does not allow for the expansion of either of its restaurant concepts in 2002. See "Item 7. Management's Discuss and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources." Results of operations and changes in the Company's capital structure will determine the nature, extent, and timing of future restaurant development. ASSETS

~~MENU~~ In August 2003, the Board of Directors approved the sale of three of the Company’s then-existing five steakhouses which were located in Midtown Manhattan, New York, Reston, Virginia, and Washington, D.C. The purchaser, McCormick and Schmick Restaurant Corp. (“M&S”), converted all three steakhouses to another restaurant concept following the sale. On January 7, 2004, the sale was consummated for approximately $5.6 million.

~~The~~In ~~Chart~~September 2003, ~~House~~the ~~menu~~Board isof ~~comprised~~Directors ofapproved ~~eight~~a ~~species~~proposal ofto ~~fresh~~sell ~~fish~~the atCompany’s remaining ~~any~~two ~~one~~steakhouses ~~time~~and ~~that~~certain ~~are~~Angelo ~~the~~and ~~basis~~Maxie’s ~~for~~intellectual property. The ~~over~~Company 40executed ~~imaginative~~a definitive agreement with A & M Acquisitions, ~~proprietary~~LLC ~~recipes~~on ~~including~~June a22, ~~vast~~2004, for the ~~section~~sale of ~~fresh~~its ~~fish~~remaining ~~and~~two ~~seafood~~steakhouses ~~entrees~~located ~~that~~on ~~are~~Park ~~grilled~~Avenue in New York City and in West Palm Beach, ~~baked~~Florida, orincluding ~~blackened~~all atthe rights to the ~~customer's~~name ~~preference~~“Angelo and Maxie’s.” The ~~menu~~agreement ~~changes~~was ~~daily~~approved ~~based~~by ~~upon~~ the ~~local~~Company’s ~~availability~~stockholders in September, 2004. Following the closure of ~~species,~~the ~~seasonality~~West Palm Beach, Florida restaurant and the termination of the related ~~price~~lease, the definitive agreement with A&M Acquisitions, LLC was amended to exclude ~~maximize~~the ~~both~~sale ~~selection~~of the West Palm Beach, Florida restaurant. The sale of the Park Avenue restaurant was consummated on November 30, 2004 and the Company received approximately $4.5 million. After the completion of the sale, the Company’s name was changed to AM-CH, Inc.

4OPERATIONS

~~profitability.~~As ~~Signature~~noted ~~items~~above ~~include~~the ~~Sesame~~Company ~~Crusted~~no ~~Salmon,~~longer ~~Macadamia~~operates ~~Crusted~~any ~~Mahi~~restaurants ~~Mahi, Spiced Yellow Fin Ahi,~~ and ~~Hot Chocolate Lava Cake dessert. The Company also promotes special seasonal fish~~is ~~choices,~~currently ~~such~~in asthe ~~its~~process ~~spring Alaska seafood promotion, to provide consumers with additional limited availability seafood selections. Fresh fish and seafood items represent over 65%~~ of ~~Chart~~dissolving ~~House food entrée sales~~ and ~~management~~winding ~~believes~~up ~~that~~ its ~~ability~~affairs. The toCompany ~~execute~~has ~~such~~only ~~sophisticated~~one ~~menu~~employee ~~offerings~~who ~~in multiple markets throughout the United States~~ is ~~a key competitive advantage. In~~ ~~addition~~responsible tofor ~~its~~resolving ~~proprietary~~any ~~selection~~remaining ofissues ~~imaginative~~as ~~entrees,~~well ~~the~~as ~~majority~~complying ofwith ~~Chart~~any applicable ~~House~~regulatory ~~restaurants feature an elaborate salad bar~~requirements.

~~Angelo and~~GOVERNMENT Maxie's is renowned for its thick, juicy steaks and has devised a menu which provides high-quality products served in portions that emphasize "American abundance" at reasonable prices. Angelo and Maxie's menu is split into two categories, "Meat and Not Meat," and offers a broad spectrum of oversized steaks, salads, fish, and chicken and a broad selection of á la carte side dishes. Diners can choose from a wide array of over 20 entrees offering a more diverse selection than many competing steakhouses. Signature items include the 26-ounce Ribeye Steak, 13-ounce Filet Mignon, Grilled 10-ounce Yellowfin Tuna, Two-pound Roasted Chicken Breast with Garlic Lemon Black Pepper Crust, and the White Chocolate Martini. Angelo and Maxie's also offers an extensive 100 bottle wine list. The menu also offers a wide selection of premium cigars, which can be purchased either from the menu or in a retail area at the front of the restaurant. REGULATION

5The Company believes it is operating in compliance with applicable laws, regulations, and administrative practices governing its operations.

~~RESTAURANT LOCATIONS~~ EMPLOYEES

~~The~~At ~~following~~December ~~table~~27, ~~depicts~~2004, ~~existing~~the ~~restaurants~~Company ashad oftwo ~~December 31~~employees at the corporate office located in Chicago, ~~2001:~~Illinois. One of the remaining two employees was terminated on February 1, 2005.

Location	Date opened	Square footage	No. of seats
Chart House—East
Alexandria, VA	July-90	10,000	396
Annapolis, MD	November-79	15,014	300
Boston, MA	September-73	12,000	230
Daytona Beach, FL	May-82	10,900	220
Dobbs Ferry, NY	July-77	10,455	248
Ft Myers, FL	August-84	8,400	222
Jacksonville, FL	October-82	8,200	255
Longboat Key, FL	April-89	9,679	204
Melbourne, FL	May-82	6,800	168
Miami, FL	June-82	10,026	250
Newport, KY	April-96	8,900	364
Philadelphia, PA	April-86	15,786	362
Savannah, GA	March-79	8,500	220
Simsbury, CT	June-73	10,448	212
Weehawken, NJ	August-94	32,000	280	(1)
Chart House—West
Aspen, CO	July-61	5,184	180
Boise, ID	September-77	5,508	156
Cardiff, CA	July-76	7,100	275
Coronado, CA (Peohe's)	January-88	10,633	310
Dana Point, CA	December-79	8,360	200
Genesee, CO	July-84	6,816	232
La Jolla, CA	May-71	6,598	216
Lake Tahoe, NV	February-77	7,200	240
Los Gatos, CA	December-76	7,514	200
Malibu, CA	November-70	5,100	142
Mammoth, CA	December-81	6,800	220
Marina del Rey, CA	July-76	5,861	200
Montara, CA	October-78	11,000	300
Monterey, CA	December-81	6,200	154
Newport Beach, CA	November-63	5,800	140
Oceanside, CA	July-76	7,570	172
Portland, OR	April-85	9,700	250
Rancho Mirage, CA	July-79	7,500	234
Redondo Beach, CA	September-69	9,565	346
San Diego, CA (Rowing Club)	June-83	8,500	231
Scottsdale, AZ	September-90	6,550	301
Steamboat Springs, CO	December-88	7,000	200
Vancouver, WA	December-80	8,600	188
Ventura, CA	August-81	7,600	224
Chart House—Average		9,112	237
Angelo and Maxie's
New York, NY (Manhattan)	July-00	9,172	300
New York, NY (Park Ave)	May-96 (2)	6,486	210
Phoenix, AZ	December-00	8,962	276
Reston, VA	May-01	7,900	251
Washington, DC	October-00	8,500	241
West Palm Beach, FL	March-01	9,700	320
Angelo and Maxie's—Average		8,453	266

ITEM 2. PROPERTIES.

6On June 30, 2003, the Company’s lease on its corporate headquarters in Chicago, Illinois expired and the Company relocated to a space commensurate with its current needs. The Company entered into an operating lease on its new corporate headquarters on June 26, 2003. This new operating lease is terminable with 30 days notice.

~~COMPETITION~~ ITEM 3. LEGAL PROCEEDINGS

The ~~restaurant~~Company ~~industry~~ periodically is ~~highly~~a ~~competitive~~defendant ~~and~~in ~~menu,~~litigation ~~price,~~incidental ~~service,~~to ~~convenience,~~its ~~location,~~business ~~and~~activities. ~~ambience~~While ~~are~~any litigation ~~all~~or ~~important~~investigation ~~factors~~has ~~that~~an ~~differentiate~~element ~~concepts for~~of ~~consumers.~~uncertainty, ~~The~~the Company ~~competes~~believes that ~~with~~the ~~many~~outcome ~~other~~of ~~restaurants~~any inof ~~the~~these ~~upscale~~matters ~~casual~~will ~~and~~not ~~fine~~have ~~dining~~a ~~markets,~~material asadverse effect ~~well~~on asits financial condition or operations. No matters were pending nor threatened to the best ~~seafood~~knowledge ~~and~~of ~~steakhouse~~the ~~sectors.~~Company as of March 30, 2005.

~~Chart~~ITEM ~~House competes with a broad selection of national, regional, and independent restaurants~~4. OnSUBMISSION ~~a national scale, Chart House is a leading brand with few direct competitors and no~~OF ~~clear~~MATTERS ~~market~~TO ~~leader~~A ~~that~~VOTE ~~dominates~~OF ~~the~~SECURITY ~~segment~~HOLDERS. Chart House feels that it offers a superior value proposition and differentiates itself by providing the most comprehensive and innovative selection of high-quality fresh fish and seafood, a unique ambience, and superior customer service at reasonable price points in non-duplicative destination locations.

~~Angelo and~~No ~~Maxie's~~matters ~~competes~~were ~~in the steakhouse segment and its primary competition comes from other national upscale steakhouses, as well as regional and independent steakhouses in~~submitted ~~selected~~to ~~markets. Angelo and Maxie's believes it offers~~ a ~~differentiated~~vote ~~guest~~of ~~experience~~security byholders ~~providing~~during ~~unique,~~the ~~high-quality~~fourth ~~aged~~quarter ~~steaks~~of inthe ~~abundant~~fiscal ~~portions, coupled with an energetic~~year ~~environment~~covered ~~that~~by ~~provides~~this ~~broader occasion appeal than other traditional steakhouses~~report.

~~OPERATIONS~~ 4

InPART order to maintain a consistently high level of food quality and service in all of its restaurants, the Company has established uniform operational standards which are implemented by the managers of each restaurant. All restaurants are required to be operated in accordance with rigorous standards and specifications relating to the quality of ingredients, preparation of food, menu selection, maintenance of premises, and employee conduct. Corporate office personnel ensure standard menu offerings are adhered to with periodic revision to standard recipes and menus, and lists of approved ingredients and supplies based upon the quality, availability, cost, and customer acceptance of various menu items. The Company maintains centralized financial and accounting control for its restaurants. On a daily basis, restaurants report customer counts, sales, labor costs, and deposit information to Company headquarters. On a weekly basis, restaurant managers forward a summarized profit and loss statement, sales report, and supplier invoices. II

~~MARKETING~~ ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

The Company'’s common ~~marketing~~stock, ~~strategy~~par isvalue ~~designed~~$0.01 toper ~~capitalize~~share on (the ~~historical~~“Common ~~strength~~Stock”) ofis ~~the~~quoted ~~Chart~~on ~~House brand and~~ the ~~deep-brand penetration that~~ ~~Angelo~~NASD ~~and~~OTC ~~Maxie's~~Bulletin ~~has~~Board ~~achieved~~under inthe ~~New York~~trading ~~City,~~symbol ~~its core market~~AMHN.OB. On ~~The~~March ~~Company's~~30, ~~headline~~2005, ~~for~~there ~~Chart~~were ~~House~~approximately 655 isholders ~~"America's~~of ~~Favorite~~record ~~Seafood,"~~of ~~while~~ the ~~headline for Angelo and Maxie'~~Company’s isCommon ~~"I'm in the mood~~Stock.~~.."~~ AsThe ~~the~~ Company has ~~developed~~not ~~Angelo~~paid any ~~and~~cash ~~Maxie's~~dividends ~~outside~~on ofits ~~New York,~~Common ~~marketing~~Stock ~~initiatives~~during tothe ~~build~~last ~~brand~~two ~~awareness~~fiscal ~~have~~years ~~included a~~and ~~combination~~does ofnot ~~local~~anticipate ~~promotional~~paying ~~efforts~~cash asdividends ~~well~~on asits ~~radio~~Common ~~and~~Stock ~~print~~in ~~advertising.~~the foreseeable future. The ~~advertising~~Company ~~focus~~can ~~for~~not declare ~~Angelo~~or ~~and~~pay ~~Maxie's~~any isdividends ~~centered~~on ~~around~~the ~~delivering~~Common anStock ~~engaging~~so ~~and~~long ~~memorable~~as ~~tag~~any ~~line~~shares ~~that~~of the ~~appeals~~Preferred toStock ~~the~~are ~~concept's~~outstanding, ~~younger~~unless, ~~more~~in ~~energetic~~each ~~target~~case, ~~market. The Company uses edgy advertising campaigns to differentiate~~ the ~~brand~~full ~~from~~amount ~~its~~of accrued ~~stuffier~~and ~~counterparts~~unpaid ~~and~~dividends ~~deliver~~(whether aor ~~fresh~~not ~~twist~~declared) on anall outstanding ~~American~~shares ~~classic:~~of the ~~steakhouse.~~Preferred ~~Bold~~Stock ~~print~~for ~~ads,~~all individend ~~eye-catching~~periods ~~colors,~~ending ~~feature~~on ~~the~~or ~~superlative~~before ~~steak~~the date ~~and~~of ~~other~~payment ~~fare~~of ~~offered~~such atdividend ~~the~~have ~~restaurant.~~been ~~Bold~~paid ~~radio~~or ~~spots~~set ~~reinforce~~apart ~~both~~for ~~brands'~~payment or ~~younger~~contemporaneously ~~consumer~~are declared and ~~fun, exotic feel~~paid.

~~The~~In connection with the dissolution of the Company's, ~~integrated~~its ~~marketing~~stock ~~communications~~transfer ~~programs~~books ~~consist~~were closed as of ~~public~~the end ~~relations,~~of ~~advertising~~trading ~~(print,~~on ~~direct~~February ~~mail~~7, ~~electronic mail~~2005, ~~and~~on ~~local~~which ~~radio),~~date ~~and~~the ~~promotions.~~Company ~~The~~ceased ~~Company~~recording ~~also~~transfers ~~commits~~of ~~resources~~shares toof its ~~internally~~Common ~~developed~~and ~~ViewPoints~~Preferred ~~Frequent~~Stock ~~Dining~~and ~~Program.~~issuing ~~Established~~shares inof ~~1999,~~its Common ~~ViewPoints~~Stock ~~enables~~upon ~~approximately~~the ~~200,000~~exercise ~~participating~~of ~~Chart~~options ~~House~~to ~~patrons~~purchase toCommon ~~earn~~Stock. The ~~dining~~record date for purposes of determining ~~rewards~~stockholders ~~such~~who aswill ~~purchasing~~be ~~discounts~~eligible ~~through~~to ~~frequent~~participate ~~dining~~in ~~use.~~any ~~The~~distributions made by the Company ~~manages~~in connection with the ~~customer~~dissolution and liquidation of the Company is February 7, 2005.

7Under the Plan of Dissolution, prior to making any distributions to its stockholders, the Company is required to pay or make reasonable provision to pay, all claims and obligations of the Company.

In addition, in ~~profile~~connection ~~database~~with the dissolution of the Company, holders of the Company’s Preferred Stock will be entitled to ~~drive~~liquidating ~~visit~~payments ~~frequency~~before any payment is made to holders of Common Stock. The amount per share of the liquidating payment to holders of Preferred Stock will be the greater of (a) $2.25, ~~increase~~plus ~~customer~~all ~~loyalty~~accrued but unpaid dividends to date, plus a ratable distribution of any remaining assets and funds along with holders of the Company’s other equity securities (on an as-converted basis), provided that the additional distribution to ~~ensure~~such holders will not exceed $4.0 million in the ~~Chart~~aggregate, ~~House~~subject ~~brand~~to ~~remains~~reduction ~~top~~in certain circumstances; or (b) the amount determined by dividing (i) the total amount available of ~~mind~~distribution by ~~through~~(ii) the ~~use~~total number of ~~electronic~~outstanding ~~mail~~shares ~~and~~of ~~other~~Common ~~direct~~Stock, ~~marketing~~determined on ~~initiatives.~~an as-converted basis.

~~Chart House~~The ~~has~~Company ~~also~~is ~~developed a strategic relationship with iDine Rewards Network, Inc. ("iDine"), a related party and owner of the iDine frequent diner program. iDine manages a~~not ~~member~~able ~~base~~to ofpredict ~~over~~whether ~~six~~any ~~million~~distributions ~~diners~~will ~~and~~be ~~promotes~~made ~~rewards~~to ~~through frequent dining on designated days of the week at~~ its ~~participating~~stockholders ~~restaurants. In~~ in connection with the ~~advance~~dissolution, ~~sale~~or ofif ~~discounted food~~such ~~and~~distributions ~~beverage~~are ~~credits~~made, the ~~Company~~amount or ~~receives~~timing ~~advertising~~thereof. The inCompany ~~iDine~~believes that ~~publications~~if ~~and~~any ~~through~~such ~~the~~distributions ~~relationships~~are ~~iDine~~made, ~~has~~it ~~established~~is ~~with~~likely ~~major~~they ~~airlines~~would tonot ~~feature~~be ~~Chart~~made until ~~House~~late ~~and~~in ~~Angelo and Maxie's as preferred dining choices~~2005.

~~Advertising~~The following ~~expense~~table ~~was~~sets ~~$3.3 million,~~forth ~~$1.6 million,~~the ~~and~~quarterly ~~$1.1 million~~high inand ~~fiscal~~low ~~years~~sales ~~2001,~~prices ~~2000,~~for ~~and~~a ~~1999,~~share ~~respectively,~~of ~~representing~~the Company’s ~~2.2%,~~Common ~~1.1%,~~Stock ~~and~~for ~~0.7%~~the ~~of respective~~two ~~revenues~~most ~~for~~recent ~~each~~fiscal ~~year.~~ years:

PURCHASING

2004	High		Low
Fourth quarter	$	0.79	$	0.53
Third quarter	$	1.10	$	0.66
Second quarter	$	1.45	$	0.82
First quarter	$	1.90	$	1.35

The Company's ability to maintain consistent quality throughout its system depends in large part upon its ability to acquire food products and related items from reliable sources in accordance with Company specifications. Suppliers are pre-approved by the Company and are required to adhere to strict product specifications to ensure that high-quality food and beverage products are served in the restaurants. The Company negotiates directly with the major suppliers to obtain competitive prices and uses purchase agreements to stabilize the potentially volatile pricing associated with certain commodities. Management believes that adequate alternative sources of quality food and supplies are readily available.

2003	High		Low
Fourth quarter	$	3.10	$	1.60
Third quarter	$	3.15	$	2.45
Second quarter	$	2.95	$	2.30
First quarter	$	3.50	$	2.85

~~TRADEMARKS~~ 5

~~The original "Chart House" logo and trademark were registered with the United States Patent and Trademark Office (the "USPTO") in 1972 and 1977, respectively. An~~ITEM ~~updated corporate "Chart House" logo and trademark were registered with the USPTO in August 1997~~6. ~~The~~SELECTED ~~"Peohe's"~~FINANCIAL ~~logo and trademark were registered with the USPTO in 1988~~DATA. The "Angelo and Maxie's Steakhouse" word mark was registered with the USPTO in 1997. The "Angelo & Maxie's Steakhouse" logo was registered with the USPTO in April 2000. Trademarks in connection with "ViewPoints," the Company's frequent dining program, were registered with the USPTO in January 2001. Various marketing slogans and other marks are currently pending with the USPTO.

The Company ~~"Chart~~has ~~House"~~sold ~~trademark~~or closed all its restaurants as of December 27, 2004 and ~~logo~~filed isa certificate ~~licensed~~of bydissolution with the ~~Company~~State toof Delaware on February 2, 2005. As such the ~~operators~~following offinancial ~~two~~information presents ~~Chart~~the ~~House~~operations of the restaurants, ~~one~~that ~~located~~were insold ~~Honolulu,~~or ~~Hawaii~~closed ~~and~~during ~~one~~the fiscal inyear ~~Kona,~~as ~~Hawaii.~~discontinued operations.

~~GOVERNMENT~~Selected ~~REGULATION~~ Financial Data

~~Each~~(In ~~of the Company's restaurants is subject to various federal~~thousands, ~~state~~except ~~and~~per ~~local~~share ~~laws, regulations,~~ and ~~administrative~~number practices affecting its business and must comply with provisions regulating, among other things, health and sanitation standards, equal employment, public accommodations for disabled patrons, minimum wages, worker safety and compensation, and licensing for the sale of food and alcoholic beverages. Difficulties or failures in obtaining or maintaining required liquor licenses, or other required licenses, permits, or approvals, could delay or prevent the opening of new restaurants ~~or adversely affect the operations of existing restaurants.~~ data)

Federal and state environmental regulations have not had a material effect on the Company's operations, but more stringent and varied requirements of local governmental bodies with respect to zoning, land use, and environmental factors could delay construction of new restaurants and add to their construction cost.

	2004			2003			2002			2001			2000
Statements of operations data:
Impairment of assets and restructuring charges	$	(3,229	)	$	(5,728	)	$	(7,596	)	$	(5,699	)	$	(3,810	)
Interest expense, net	(72		)	(112		)	(2,615		)	(4,772		)	(2,901		)
Other income	204			204			202			1,080			75
Loss before discontinued operations	(3,097		)	(5,636		)	(10,009		)	(9,391		)	(6,636		)
Loss from discontinued operations	(1,057		)	(289		)	(1,691		)	(10,602		)	(3,790		)

Net Loss	(4,154		)	(5,925		)	(11,700		)	(19,993		)	(10,426		)

Loss from discontinued operations per common share	(0.53		)	(0.14		)	(0.85		)	(5.38		)	(1.93		)

Net Loss per common share	(2.53		)	(3.44		)	(6.37		)	(10.37		)	(5.31		)
Weighted-average number of common shares outstanding - basic and diluted	2,005			1,995			1,981			1,970			1,965

Balance sheet data:
Cash and cash equivalents	10,996			4,551			7,651			260			383
Restricted cash	2,029			2,627			2,702			—			—
Total assets	14,264			22,028			31,568			88,527			106,761
Long-term obligations	1,922			2,600			4,172			4,874			26,419
Stockholder’s equity	9,210			14,283			21,101			33,254			45,961

Operational data (end of period):
Number of Angelo and Maxie’s Steakhouses	—			5			5			6			5
Number of restaurants in the Chart House Business	—			—			—			39			39

8ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The Company is also subject to the Fair Labor Standards Act, which governs such matters as minimum wages, overtime, and other working conditions. A significant number of the Company's food service personnel are paid at rates related to federal and state minimum wage requirements and, accordingly, increases in the minimum wage or decreases in the allowable tip credit will increase the Company's labor cost. There can be no assurance that future legislation covering, among other matters, mandated health insurance and living wage increases, will not be enacted and subsequently have a significant effect on Company profitability. OVERVIEW

~~The~~As of December 27, 2004, the Company sold or closed all of its restaurants and has no ongoing business operations. Therefore the Company ~~believes~~has itpresented isall restaurant ~~operating~~results as discontinued operations for all periods, in ~~compliance~~accordance with FAS 144. The Company filed a certificate of dissolution with ~~applicable~~the ~~laws,~~State ~~regulations~~of Delaware on February 2, 2005 and is ~~administrative~~in ~~practices~~the ~~governing~~process of winding up its ~~operations~~affairs.

~~EXECUTIVE~~In ~~OFFICERS~~September OF2003, ~~THE~~the ~~COMPANY~~ Board of Directors approved a proposal to sell the Company’s remaining two steakhouses and certain Angelo and Maxie’s intellectual property. In September of 2004, the Company’s stockholders approved a purchase agreement for the sale of the remaining two Angelo & Maxie’s restaurants. In November of 2004, the Company entered into a lease termination agreement for the West Palm Beach property and the restaurant was closed on November 15, 2004. The sale of the remaining Park Avenue restaurant, including the Angelo & Maxie’s name for approximately $4.5 million, was consummated on November 30, 2004.

~~The~~In ~~following~~August ~~table~~2003, ~~sets~~the ~~forth~~Board ~~certain~~of ~~information~~Directors ~~about~~approved the ~~Executive~~sale ~~Officers~~ of three of the Company.’s ~~The~~then-existing ~~positions~~five ~~are~~steakhouses ~~with~~located ~~Chart~~in ~~House~~Midtown ~~Enterprises~~Manhattan, ~~Inc~~ New York, Reston, Virginia, and Washington, D.C. On January 7, 2004, the sale was consummated for approximately $5.6 million.

NAME		AGE		POSITIONS HELD
Thomas J. Walters		43		Chief Executive Officer
Kenneth R. Posner		54		President and Chief Financial Officer

~~Executive~~The Company consummated the sale of the Chart House Business, 39 of its ~~Officers~~then-existing 45 restaurants, as of July 30, 2002. The sale was completed for consideration of approximately $55.3 million, consisting of cash and the assumption of approximately $3.1 million of certain current liabilities. The Company ~~are~~used ~~appointed~~$30.8 ~~annually~~million byof the proceeds ~~Board~~to ofrepay ~~Directors~~all amounts outstanding under its Credit Agreement and ~~serve~~a subordinated atnote owed to a related party. See “Liquidity and Capital Resources.” The Company recognized a $2.4 million loss on the ~~Board's~~sale, ~~discretion~~in addition to $2.2 million of restructuring costs related to the sale. In 2003, the Company further adjusted its liabilities associated with the sale resulting in the recognition of an additional $0.6 million loss on the sale.

Thomas J.RESULTS WaltersOF was promoted to Chief Executive Officer in November 1998. He joined the Company as President and Chief Operating Officer and became a member of the Board of Directors in February 1998. From March 1995 until February 1998, Mr. Walters was President of Morton's of Chicago. He also previously held the positions at Morton's of Vice President of Operations and Regional Manager from March 1993 to March 1995. Prior to Mr. Walters' association with Morton's, he was Director of Food and Beverage with the Ritz-Carlton Hotel Corporation for six years. He has also held positions as Director of Food and Beverage for the La Costa Resort & Spa, and Director of Catering and Banquet for the Hyatt Hotels Corporation. OPERATIONS

~~Kenneth R.~~The ~~Posner was appointed President and Chief Financial Officer of the~~ Company reports infiscal ~~April 2001.~~years ~~From~~under ~~April 1999~~a ~~until~~52/53-week ~~July 2000, Mr~~format. ~~Posner was Executive~~ ~~Vice~~This ~~President~~reporting ~~and~~method ~~Chief~~is ~~Financial~~used ~~Officer~~by ofmany ~~Lodgian, Inc.,~~companies in the ~~owner~~hospitality industry and ~~operator~~is ofmeant ~~106~~to ~~mid~~improve year-~~scale~~to-year ~~hotels~~comparisons inof ~~32 states~~operating results. Under ~~Prior~~this ~~to Mr. Posner's position at Lodgian~~method, ~~he spent~~certain 18 years aswill ~~Senior~~contain ~~Vice~~53 ~~President~~weeks. Fiscal 2004, 2003 ofand ~~Finance~~2002 ~~and~~all ~~Treasurer~~contained of52 weeks. HAs ~~Group~~stated ~~Holdings~~earlier, ~~Inc.,~~ the ~~privately~~Company ~~held~~has ~~parent~~sold ~~company~~or ~~for~~closed ~~more~~all ~~than~~of ~~200~~its ~~corporations, including, among others, Hyatt~~restaurants ~~Hotels~~ and ~~Resorts~~is ~~and~~following ~~Grand Victoria Riverboat Casinos. He has also served on~~ the ~~Board~~stockholder ofapproved ~~Directors~~Plan ~~for most business units~~ of ~~H Group Holdings, Inc~~Dissolution. Consequently, ~~and~~all asof athe ~~trustee~~Company’s ofrestaurant operations ~~all~~have ofbeen ~~its~~categorized ~~employee benefit~~as ~~programs~~discontinued.

~~EMPLOYEES~~The ~~AND~~following table ~~RESTAURANT~~presents ~~STAFFING~~ the results of operations for each of the fiscal years ended December 27, 2004, December 29, 2003, and December 30, 2002 (dollars in thousands):

Each restaurant is managed by one general manager and typically three assistant managers, depending on the operating characteristics and size of the restaurant. On average, general managers possess approximately five years experience with the Company. Each of the Company's general managers has primary responsibility for day-to-day operations in one of the Company's restaurants, including customer relations, food service, cost controls, restaurant maintenance, personnel relations, implementation of Company policies, and the restaurant's profitability. A portion of each general manager's and other restaurant manager's compensation depends directly on the restaurant's profitability.

	2004 Amount			2003 Amount			2002 Amount

Impairment of assets and restructuring charges	(3,229		)	(5,728		)	(7,596		)

Interest expense, net	(72		)	(112		)	(2,615		)
Other income	204			204			202

Loss before discontinued operations	(3,097		)	(5,636		)	(10,009		)

Discontinued operations:
Gain (loss) from operations	(3,002		)	283			742
Gain (Loss) on sale	1,945			(572		)	(2,433		)
Loss from discontinued operations	(1,057		)	(289		)	(1,691		)

Net loss	$	(4,154	)	$	(5,925	)	$	(11,700	)
Preferred stock dividends	928			928			910
Net loss applicable to common shares	$	(5,082	)	$	(6,853	)	$	(12,610	)

~~The success~~DISCONTINUED ~~of each concept relies on the continued involvement of regional Directors of Operations, Vice Presidents of Operations, the President, and the Chief Executive Officer of the~~ OPERATIONS

9As stated above, all of the Company’s restaurants have been sold or otherwise disposed and the Company no longer has any operations. The Company has filed a Certificate of Dissolution with the office of the Secretary of State of Delaware on February 2, 2005. Therefore the Company is in the process of selling any remaining assets and settling any remaining liabilities. Pursuant to the Plan of Dissolution, the Company will distribute any remaining cash to its stockholders. No assurances can be provided as to whether any cash will be available for distribution or when a distribution may occur.

~~Company.~~Interest ~~There~~expense ~~are~~decreased ~~currently~~$40,000 ~~five~~or ~~regional~~35.7%, ~~Directors~~to ~~of Operations~~$72,000 ~~each~~in offiscal ~~whom~~2004, compared isto ~~responsible~~$112,000 ~~for~~in ~~five~~fiscal 2003 due to ~~eight~~the ~~restaurants~~extinguishment inand retirement of three letters of credit related to leases and a ~~designated~~workers ~~region~~compensation agreement. The ~~regional~~decrease ~~Directors~~in interest expense of ~~Operations~~$2.5 ~~report~~million from 2002 to ~~one~~ of2003 ~~two~~was ~~Vice~~due ~~Presidents~~to the reduction of ~~Operations~~debt. The ~~involvement~~Company ofused ~~operations~~$30.8 ~~management~~million ~~ranges~~of the proceeds from ~~attracting~~the ~~quality~~sale ~~management~~of ~~teams~~the ~~for~~Chart ~~the~~House ~~restaurants~~Business toin ~~routine~~August ~~visits~~2002 to ~~each~~repay ~~location enforcing~~all ~~strict~~amounts ~~adherence~~outstanding under its Credit Agreement and a subordinated note owed to a ~~Company~~related ~~strategies,~~party. The ~~polices,~~decrease from 2002 also reflects the extinguishment and ~~standards~~retirement of ~~quality.~~a landlord note during the second quarter 2003.

~~At December 31,~~Other ~~2001,~~income remained the ~~Company~~same ~~employed~~in ~~approximately~~fiscal 32004,~~200~~ ~~persons,~~2003 ofand ~~whom approximately 46 are corporate personnel~~2002. The ~~Approximately~~Company ~~190~~is ~~are~~committed ~~restaurant~~to ~~management~~a ~~personnel~~capital ~~and~~lease ~~the~~at ~~remainder~~a ~~represents~~location ~~hourly~~it ~~restaurant~~has ~~personnel.~~subleased ~~None~~to ~~of the Company's employees are covered by~~ a ~~collective~~third ~~bargaining agreement~~party. This ~~The~~capital ~~Company~~lease ~~has~~continues ~~never~~to ~~experienced~~be ~~a work stoppage and considers~~reported ~~its~~on ~~labor~~the ~~relations~~balance tosheet bein ~~good.~~accordance with

~~ITEM 2. PROPERTIES.~~ 7

~~All~~Statement of ~~the~~Financial ~~restaurant~~Accounting ~~properties~~Standards ~~used by the Company are subject to a lease agreement~~No. ~~The Company currently leases 38 Chart House restaurants~~13, ~~one~~“Accounting ~~Peohe's~~for ~~restaurant,~~Leases” ~~and six Angelo and Maxie's restaurants. The average remaining lease term~~ (~~including~~“FAS ~~renewal options~~13”) ~~as of December 31~~, ~~2001,~~and ~~was~~non-cash ~~25.5 years~~reductions ~~for~~to the ~~Chart~~liability ~~House~~of ~~restaurants~~approximately ~~(including~~$200,000 ~~Peohe's)~~per ~~and~~annum ~~17.3 years~~are ~~for~~reflected ~~Angelo~~in ~~and~~other ~~Maxie's restaurants~~income.

~~Chart House~~The ~~restaurant~~Company ~~sizes~~issued ~~range~~Series ~~from~~A 5convertible preferred stock,~~100~~ topar 32value $1.00 per share (“Series A Preferred Stock”),~~000~~ ~~square~~during ~~feet~~June ~~with~~2001. The anSeries ~~average~~A Preferred Stock is entitled to dividends at the rate of 910.0% per annum,~~112~~ ~~square~~based ~~feet~~on the original issue price of $2.25 ~~Seating~~per ~~capacities~~share. The ~~range~~Company ~~from~~paid ~~140~~the first totwo ~~396~~semi-annual ~~with~~dividend anobligations ~~average~~through the issuance of ~~237~~additional shares of Series A Preferred Stock. Subsequent ~~Angelo~~to ~~and~~the retirement of the Credit Agreement in August 2002, ~~Maxie's~~which ~~restaurant~~restricted ~~sizes~~the ~~range~~payment ~~from~~of 6cash dividends,~~486~~ tothe Company began paying these dividends in cash. The Company paid approximately $0.9~~,700~~ ~~square~~million ~~feet~~in ~~with~~cash andividends ~~average~~in fiscal 2004 and 2003 to holders of 8the Series A Preferred Stock,~~453~~ ~~square~~compared ~~feet~~to $0.5 ~~Seating~~million ~~capacities~~in ~~range~~cash ~~from~~dividends ~~210~~and $0.4 tomillion ~~320~~in ~~with~~additional anshares ~~average~~of Series of ~~266.~~Series A Preferred Stock in fiscal 2002.

~~The amount~~OPERATING of rent paid to lessors and the methods of computing rent vary considerably from lease to lease. All of the Company's restaurant property leases provide for a minimum annual rent, and most leases require payment of additional rent based on sales volume at the particular location over specified minimum levels. All of the Company's assets are pledged as collateral under a Revolving Credit and Term Loan Agreement among the Company, Chart House, Inc., certain banks and Fleet National Bank, as agent, as amended ("Credit Agreement"). OUTLOOK

The Company'’s ~~executive~~primary ~~offices~~objective ~~occupy~~in ~~approximately~~2005 ~~13,200~~is ~~square~~to ~~feet~~complete its stockholder approved Plan of ~~leased~~Dissolution. This ~~office~~will require ~~space~~compliance inwith avarious ~~building~~regulatory ~~located~~requirements, inresolution ~~Chicago~~of certain outstanding matters, ~~Illinois.~~including ~~This~~but ~~lease~~not ~~expires~~limited into ~~June 2003,~~release ~~with~~from anseveral letter ~~option~~of credit agreements related to ~~extend~~workers ~~the~~compensation claims and lease obligations, settlement of a long term tolease ~~June 2006.~~arrangement and payment of any general claims that may arise.

~~ITEM~~LIQUIDITY 3.AND ~~LEGAL~~CAPITAL ~~PROCEEDINGS.~~ RESOURCES

The Company periodically is a defendant in litigation incidental to its business activities. While any litigation or investigation has an element of uncertainty, the Company believes that the outcome of any of these matters will not have a material adverse effect on its financial condition or operations.

	2004			2003			2002
	(In thousands)
Net cash used in operating activities	$	(3,168	)	$	(1,080	)	$	(9,563	)
Proceeds from the sale of the Chart House Business	—			—			52,022
Proceeds from the sale of Angelo & Maxies/other assets	9,985			15			—
Expenditures for disposal of Chart House Business	—			(572		)	—
Expenditures for equipment and improvements	(9		)	(80		)	(971		)
Net cash used in financing activities	(363		)	(1,383		)	(34,097		)
Net (decrease) increase in cash	$	6,445		$	(3,100	)	$	7,391

~~ITEM~~During 4fiscal 2004, the Company sold or closed all its restaurants. The ~~SUBMISSION~~Company OFreceived ~~MATTERS~~from TOthe Asale ~~VOTE~~of OFthe restaurants ~~SECURITY~~and ~~HOLDERS~~the trade name approximately $10. 0 million in proceeds. In accordance with the approved Plan of Dissolution, the Company will distribute to its stockholders the remaining cash (if any exist) after settlement of all of its affairs. No assurances can be provided as to whether any cash will be available or when such cash will be distributed.

NoNet ~~matters~~cash ~~were~~used ~~submitted~~in operating activities was $3.2 million in 2004, compared to anet ~~vote~~cash used in operating activities of ~~security~~$1.1 ~~holders~~million ~~during~~in 2003 and net cash used in operating activities of $9.6 million in 2002. In 2004, net cash was used primarily to support general operating activities. In 2003, net cash used in operating activities primarily related to the settlement ~~fourth~~of ~~quarter~~short-term liabilities for severance payments in connection with the sale of the ~~fiscal~~Chart ~~year~~House ~~covered~~Business byand ~~this~~certain ~~report~~accrued exit costs for previously disposed locations. In 2002, net cash used in operating activities primarily related to the settlement of short-term liabilities related to the Chart House Business.

10Capital expenditures for 2004 and 2003 were approximately $9,000 and $80,000 respectively, all of which were for additions and improvements to the Angelo and Maxie’s Steakhouse asset base. Net cash provided by investing activities in 2002 included $52.0 million received for the sale of the Chart House Business. Capital expenditures for 2002 were approximately $1.0 million, of which approximately $0.8 million related to the Chart House Business.

~~PART~~Net II cash used in financing activities was $0.4 million in 2004, representing payment of $0.9 million of semiannual dividends on the Series A Preferred Stock originally issued in 2001 partially offset by the settlement of a letter of credit agreement amounting to $0.6 million. Net cash used in financing activities was $1.4 million in 2003, representing the retirement and extinguishment of a landlord note for $0.5 million and the payment of $0.9 million of semiannual dividends on the Series A Preferred Stock originally issued in 2001. Net cash used in financing activities was $34.1 million in 2002, representing the retirement of amounts owing under the Credit Agreement and a subordinated note to a related party,

~~ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.~~ 8

~~The~~primarily ~~Company's~~with ~~Common Stock was listed on~~ the ~~New York Stock Exchange under the trading symbol CHT through January 30, 2002. The Company's Common~~net ~~Stock~~proceeds isfrom ~~currently quoted on~~ the ~~NASD~~sale ~~OTC~~of ~~Bulletin Board under~~ the ~~trading~~Chart ~~symbol~~House ~~FISH~~Business. The Company ~~has~~also ~~submitted~~used ~~applications for listing of its shares on other stock exchanges, although no assurances can be given that such applications will be approved~~$2.7 Onmillion ~~March 20, 2002, there were approximately 654 holders~~ of ~~record of~~ the ~~Company's Common Stock. The Company has not paid any~~net ~~cash~~proceeds ~~dividends~~from ~~on its Common Stock and does not anticipate paying cash dividends in~~ the ~~foreseeable~~sale ~~future.~~of ~~In addition,~~ the ~~Company's~~Chart ~~Credit~~House ~~Agreement~~Business ~~restricts~~to ~~the~~collateralize ~~payment~~outstanding letters of ~~cash dividends~~credit.

The ~~following~~ ~~table~~Series ~~sets~~A Preferred ~~forth~~Stock ~~the~~is ~~quarterly~~entitled ~~high~~to ~~and~~dividends ~~low~~at ~~sales~~the ~~prices~~rate ~~for a share~~ of ~~the~~10.0% ~~Company's~~per ~~Common~~annum, ~~Stock~~based on ~~for~~ the ~~two~~original ~~most~~price ~~recent~~of ~~fiscal years~~$2.25 Onper ~~February~~share. ~~22,~~ Dividends ~~2002,~~are ~~the Company~~payable ~~effected~~semiannually aon ~~reverse~~June ~~split~~1 ofand ~~its~~December ~~Common~~1. Dividends ~~Stock,~~paid ~~pursuant~~through toJune ~~which~~1, ~~each~~2002 ~~six~~were ~~shares~~in the form of ~~Common~~additional ~~Stock~~shares ~~issued~~of ~~and~~Series ~~outstanding~~A onPreferred ~~such~~Stock, ~~date~~in ~~were~~part, ~~reclassified~~because asthe Company’s ~~and~~Credit ~~converted~~Agreement ~~into~~prohibited ~~one~~the ~~share~~payment of ~~Common Stock~~cash ~~immediately~~dividends. Subsequent ~~following~~to the ~~reverse~~retirement ~~split.~~of ~~See~~amounts ~~"Note 15.~~owing under ~~'Subsequent~~the ~~Events'~~Credit ofAgreement, ~~Item 8.~~the ~~'Financial~~Company ~~Statements.' "~~began ~~The~~paying ~~prices~~these dividends in cash. The ~~the~~Company ~~table~~expects ~~below~~to ~~do not~~continue ~~reflect~~satisfying ~~the~~any ~~impact~~future ofdividend ~~the~~obligations ~~reverse~~in ~~stock split~~cash.

2001	HIGH		LOW
First Quarter	$	4.3750	$	2.4000
Second Quarter		2.7000		1.9500
Third Quarter		2.0000		0.9500
Fourth Quarter		0.9900		0.3500
2000	HIGH		LOW
First Quarter	$	6.1875	$	4.0625
Second Quarter		6.0625		5.1250
Third Quarter		5.9375		5.2500
Fourth Quarter		5.8750		4.1875

The Company used the remaining proceeds from the sale of the Chart House Business in 2002 to settle $3.8 million in costs associated with the transaction and for general corporate purposes including, but not limited to, the settlement of short-term liabilities, certain of which related to the Chart House Business.

11The Company consummated the sale of the Chart House Business as of July 30, 2002. The total cash consideration received from this transaction was approximately $52.2 million, of which $33.5 million was used in 2002 for the following financing and operating activities (in thousands):

ITEM 6. SELECTED FINANCIAL DATA.

Retire senior, secured debt and accrued interest (1)	$	24,285
Retire related party subordinated debt, accrued interest, and accrued consulting fees	6,510
Establish collateral for outstanding letters of credit	2,702
	$	33,497

~~Selected~~(1) Includes ~~Financial~~$1.5 ~~Data~~ million to a related party, which was a participant under the Credit Agreement.

(In connection with ~~thousands,~~the ~~except~~termination ~~per~~of ~~share~~the credit agreement, and ~~number~~in order to minimize costs associated with outstanding letters of ~~restaurants~~credit, ~~data)~~the Company established a cash collateral account equal to the full balance of its obligations under outstanding letters of credit, which totaled $2.7 million in 2002. In the third quarter 2003, the Company was released from one of its obligations under an outstanding letter of credit in the amount of $0.1 million, bringing the total amount of funds in its cash collateral account to $2.6 million at December 29, 2003. During 2004, the Company was released from the obligation of two additional outstanding letters of credit in the combined amount of $0.3 million, resulting in reducing the total amount of funds in its cash collateral account to $2.0 million at December 27, 2004. Such funds are disclosed on the Company’s balance sheet as restricted cash, a non-current asset.

	2001			2000			1999			1998		1997
Revenues	$	150,871		$	141,697		$	140,937		$	145,188	$	151,202
Impairment of assets and restructuring charges		5,699			3,810			4,890			—		43,374
Total restaurant and operating expenses		160,484			149,074			142,454			143,841		190,494
(Loss) income before income taxes and extraordinary item		(13,671	)		(10,426	)		(3,540	)		571		(40,757	)
Extraordinary item, material modification of debt		942			—			—			—		—
Net (loss) income		(19,993	)		(10,426	)		(3,540	)		571		(31,118	)
Net (loss) income available to common shares		(20,427	)		(10,426	)		(3,540	)		571		(31,118	)
Net (loss) income per common share before extraordinary item—Basic and diluted(1)		(9.89	)		(5.31	)		(1.81	)		0.29		(15.92	)
Extraordinary item, material modification of debt(1)		(0.48	)		—			—			—		—
Net (loss) income per common share—Basic and diluted (1)		(10.37	)		(5.31	)		(1.81	)		0.29		(15.92	)
Balance sheet data (end of period):
Total assets		89,678			108,395			100,456			88,446		88,245
Current portion of long-term obligations		25,390			4,210			1,685			724		816
Long-term indebtedness		8,409			25,908			22,413			8,470		5,746
Stockholders' equity		33,254			45,961			56,289			59,754		59,005
Number of restaurants (end of period)		45			46			51			58		60

As of December 27, 2004, the Company had two outstanding letter of credits related to outstanding worker’s compensation claims as well as requirements under two lease agreements.

~~ITEM~~OFF-BALANCE ~~7. MANAGEMENT'S~~SHEET ~~DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.~~ ARRANGEMENTS

~~OVERVIEW~~ The Company presently does not have any off-balance sheet arrangements.

~~The~~CONTRACTUAL Company operates full-service seafood and steakhouse restaurants located predominately throughout the East and West coasts of the United States. The Company's restaurant concepts include Chart House restaurants, which are full-service seafood restaurants characterized by a comprehensive menu of eight species of fresh fish at any one time that are the basis for over 40 preparation choices; Angelo and Maxie's Steakhouse, which competes in the upscale steakhouse sector, providing a differentiated, high-energy dining experience that appeals to non-traditional steakhouse consumers; and OBLIGATIONS

12The Company is liable under a capital and several operating lease agreements, primarily related to restaurant locations. The Company is also contingently liable under letters of credit, primarily related to leasing obligations and self-insurance reserves.

~~Peohe's, a seafood restaurant with a more extensive menu. The Company operated the following number of restaurants at the end of fiscal years 2001, 2000, and 1999:~~ 9

	Chart House	Angelo and Maxie's(1)	Peohe's	Total
2001	38	6	1	45
2000	40	5	1	46
1999	49	1	1	51

The following table summarizes the scheduled expiration of the Company’s contractual obligations as of December 27, 2004 (in thousands):

During 1998, the Company identified a number of opportunities intended to reposition the Company for growth. These opportunities included disposing of 22 restaurants, 11 of which were identified for disposal during 1999. In addition, the Company executed a $31 million renovation program to remodel the restaurants it continues to operate. The Company also acquired Angelo and Maxie's Steakhouse during 1999 to diversify its seafood portfolio. The Company opened a total of six additional Angelo and Maxie's restaurants over 2000 and 2001. One of these locations was closed during the fourth quarter of 2001 and the Company anticipates closing another location in 2002. During 2001, the Company canceled restaurant development plans at three locations and currently has no plans to open additional restaurants during 2002. The Company will continue to evaluate disposition options for existing restaurants that do not positively contribute to the operations of the Company.

		Payments due by year
	Total	Less than 1 year	2-3 years	4-5 years	After 5 years
Capital lease obligation (1)	3,769	205	410	410	2,744

The Company has increased its borrowings from banks and established borrowings with a related party over the three years ended December 31, 2001, primarily to fund the renovation program of the Chart House restaurants and the acquisition and growth of the Angelo and Maxie's Steakhouses. The Company's bank credit facility was most recently amended during the fourth quarter of 2001 in order to, among other things, increase availability by $2.0 million and accelerate the maturity to April 30, 2002. The Company also raised a net $7.1 million (~~$8.5 million before related costs~~1) Includes ~~from the issuance of Series A preferred stock during the second quarter of 2001~~interest. Net proceeds were used primarily to repay a portion of the Company's related party borrowings and construction and other costs associated with the recently opened Angelo and Maxie's Steakhouses. See "Liquidity and Capital Resources."

~~RESULTS~~The OFfollowing table ~~OPERATIONS~~ summarizes the Company’s contingent liabilities as of December 27, 2004 (in thousands):

The Company reports fiscal years under a 52/53-week format. This reporting method is used by many companies in the restaurant and retail industries and is meant to improve year-to-year comparisons of operating results. The fiscal quarters of the Company consist of 13-week periods. Under this method, certain years will contain 53 weeks. Fiscal 2001 contains 53 weeks, while fiscal 2000 and 1999 contain 52 weeks.

			Amount of contingent liability expiration per year
	Total		Less than 1 year		2-3 years		4-5 years		After 5 years
Letters of credit (1)	2,029		2,029		—		—		—
Property subleases (2)	730		165		329		236		—
Total	$	2,759	$	2,194	$	329	$	236	$	—

13(1) Related to lease obligations and self-insurance reserves. The majority of these letters of credit automatically renew for one-year terms until the leases expire or the insurance claims are settled. These letters of credit are fully collateralized and the collateral is reflected on the balance sheet as restricted cash.

(2) The ~~following~~ ~~table~~Company ~~presents~~holds ~~the~~a ~~results~~standby letter of ~~operations~~credit from ~~for~~the ~~each~~sublessee of ~~the~~this ~~fiscal~~property ~~years~~equaling ~~ended~~one ~~December 31,~~year’s ~~2001,~~rent ~~December 25,~~on ~~2000,~~the ~~and December 27, 1999~~property.

			2001					2000					1999
			Amount			%		Amount			%		Amount			%
Revenues			$	150,871		100.0		$	141,697		100.0		$	140,937		100.0
Operating costs and expenses:
	Cost of sales			47,695		31.6			46,347		32.7			45,059		32.0
	Restaurant labor			42,603		28.2			40,499		28.6			42,015		29.8
	Other operating costs			33,842		22.4			25,795		18.2			26,525		18.8
	Rent			9,949		6.7			7,933		5.6			5,405		3.8
		Total restaurant costs		134,089		88.9			120,574		85.1			119,004		84.4
Restaurant operating income				16,782		11.1			21,123		14.9			21,933		15.6
	Selling, general and administrative expenses			11,245		7.5			12,224		8.6			11,472		8.1
	Depreciation and amortization			7,753		5.1			6,922		4.9			7,830		5.6
	Pre-opening costs			597		0.4			5,266		3.7			—		—
	Impairment of assets and restructuring charges			5,699		3.8			3,810		2.7			4,890		3.5
	Loss (gain) on sales of assets			1,101		0.7			278		0.2			(742	)	(0.5	)
		Total restaurant and operating costs		160,484		106.4			149,074		105.2			142,454		101.1
Loss from operations				(9,613	)	(6.4	)		(7,377	)	(5.2	)		(1,517	)	(1.1	)
	Interest expense, net			4,958		3.3			3,049		2.2			2,023		1.4
	Other income			(900	)	(0.6	)		—		—			—		—
Loss before income taxes and extraordinary item				(13,671	)	(9.1	)		(10,426	)	(7.4	)		(3,540	)	(2.5	)
Provision for income taxes				5,380		3.5			—		—			—		—
Net loss before extraordinary item				(19,051	)	(12.6	)		(10,426	)	(7.4	)		(3,540	)	(2.5	)
Extraordinary item, material modification of debt				942		0.7			—		—			—		—
Net loss			$	(19,993	)	(13.3	)	$	(10,426	)	(7.4	)	$	(3,540	)	(2.5	)
Preferred stock dividends				434		0.2			—		—			—		—
Net loss available to common shares			$	(20,427	)	(13.5	)	$	(10,426	)	(7.4	)	$	(3,540	)	(2.5	)

CRITICAL ACCOUNTING POLICIES

~~Fiscal~~A ~~2001~~critical ~~Compared~~accounting policy is one that would materially affect the Company’s operations or financial condition, and requires management to ~~Fiscal~~make ~~2000~~ estimates or judgments in certain circumstances. Set forth below is a description of those accounting policies which the Company believes are most critical and could have the greatest impact on its operations or financial condition.

~~Revenues~~Valuation ~~increased~~of ~~$9.2 million,~~Exit orCosts 6and Restructure Reserves.~~5%,~~ On an as-needed basis and subject to ~~$150.9 million~~approval of inthe ~~fiscal~~Company’s ~~2001~~Board of Directors, ~~compared~~the toCompany ~~$141.7 million~~establishes inreserves ~~fiscal~~for unusual ~~2000.~~and ~~The~~non-recurring ~~increase~~items inassociated with the activities of exiting ~~revenues~~restaurant islocations ~~primarily~~and ~~due~~reorganizing support staff to address changes in the Company’s ~~addition~~operations. This ofrequires ~~two~~that management ~~new~~make ~~Angelo~~estimates for cash inflows and ~~Maxie's~~outflows ~~restaurants~~based ~~opened~~on ~~during~~judgment, market ~~2001~~conditions, ~~($5~~advice from counsel and consultants, and historical experience.~~0 million)~~ These estimates include, ~~2001~~but are ~~full-year~~not ~~performance~~limited to, future payments of ~~four~~rents, ~~Angelo~~severance, legal and ~~Maxie's~~consulting ~~restaurants~~costs, ~~opened~~consideration for contract modifications, and ~~two~~proceeds ~~Chart~~from ~~House~~the ~~restaurants~~sale ~~reopened~~of disposed ~~during~~assets. Because ~~2000~~of ~~($12~~factors beyond management’s control, actual results may be different from the estimates, which may cause the Company to record adjustments in future periods.~~6 million)~~ In June 2002, ~~and~~the aFinancial Accounting ~~53rd~~Standards ~~week~~Board issued Statement of ~~sales~~Financial ~~($3~~Accounting Standards No.~~6 million~~ 146, “Accounting for Costs from Exit or Disposal Activities” (“FAS 146”). FAS ~~These~~146 ~~increases~~requires, ~~were~~among ~~offset~~other bythings, that a liability ~~4.8%~~for costs associated with an exit or disposal activity be recognized ~~decrease~~when inthe ~~comparable~~liability ~~restaurant~~is ~~revenues~~incurred ~~($5.7 million)~~rather ~~and~~than at the time of commitment to a formal ~~reduction~~shutdown inplan. The ~~revenues~~Company adopted ~~from~~this ~~restaurants~~Standard ~~disposed~~as ~~during~~of ~~2000~~January ~~and~~1, ~~2001~~2003 ~~($6.3 million).~~with no material impact.

~~Comparable restaurant~~Impairment ~~revenues~~of ~~for~~Assets. On January 1, 2002, the 36Company ~~Chart~~adopted ~~House~~FAS 142, ~~one~~which ~~Angelo~~requires, ~~and~~among ~~Maxie's~~other things, ~~and~~that ~~one~~effective ~~Peohe's~~January ~~restaurants~~1, ~~open~~2002, goodwill resulting from a business combination accounted for ~~the~~as ~~entire~~a ~~current~~purchase ~~and~~no longer ~~prior~~be ~~fiscal~~amortized, ~~years~~but ~~decreased~~be 4subject to ongoing impairment review.~~8%.~~ On ~~Management attributes~~an ongoing basis, the ~~decline~~Company inreviewed ~~comparable~~its carrying value of restaurant ~~revenues~~assets toand ~~the~~compared ~~economic~~them ~~slowdown~~with ~~experienced~~fair ~~since~~market value. In ~~early~~determining ~~2001,~~the ~~particularly~~fair onmarket value ~~the~~of ~~West~~its ~~coast.~~assets, ~~The~~management ~~decline~~considers inseveral ~~revenues~~factors ~~for~~requiring the exercise ~~year~~of ~~was~~its ~~also~~business judgment. Such ~~significantly~~business judgment included developing

1410

~~affected~~valuation bymultiples, such as the ~~national~~ratio ~~tragedy~~of ontotal ~~September 11,~~capitalized ~~2001.~~value Into ~~addition,~~restaurant ~~the~~earnings ~~Company's~~before ~~first~~interest, taxes, ~~quarter~~depreciation, ~~2001 experienced unseasonably cold~~ and~~/or~~ ~~wet~~amortization ~~weather~~for ~~compared~~an ~~with~~industry ~~rather~~peer ~~mild~~group ~~weather~~of inpublicly ~~spring~~traded ~~2000.~~companies, ~~Adverse~~and ~~weather~~applying ~~conditions~~those ~~affect~~multiples to the Company'’s ~~ability~~historical toand projected ~~utilize~~operating ~~outdoor~~performance. If management ~~seating~~determines atthat athe ~~number~~fair market value of its ~~restaurants~~assets inis ~~addition to reducing customer visits in general. Management believes~~materially below the ~~corporate~~current ~~community,~~carrying acost ~~significant component~~ of ~~upscale~~the ~~restaurant revenues~~assets, ~~has~~an ~~altered~~impairment ~~its~~charge ~~travel~~is recognized ~~and~~in ~~entertainment~~operating ~~practices~~income in ~~response~~the toperiod the ~~current~~impairment ~~economic~~is ~~slowdown and fears over recent national events~~identified. ~~Management expects that continued economic weakness will continue to challenge its ability to stimulate revenue growth.~~

~~Cost of~~Self-Insurance ~~sales~~Liability. The asCompany awas ~~percentage~~self-insured ofthrough ~~restaurant~~October 2002 ~~revenues~~for ~~decreased~~its byworkers’ ~~1.1 percentage~~compensation ~~points~~and ingeneral ~~fiscal~~liability ~~2001, compared with fiscal 2000~~insurance programs. The ~~This~~Company ~~margin improvement was attributable to the~~maintained ~~continued~~stop-loss ~~emphasis~~coverage onwith ~~generally~~third ~~lower~~party ~~cost~~insurers ~~seafood~~to ~~entrees~~limit onits ~~the~~total ~~Chart House menus~~exposure. The ~~Additionally,~~accrued ~~margins~~liability ~~benefited~~associated ~~from~~with ~~price~~these programs ~~increases~~is ~~for~~based ~~select~~on ~~menu~~management’s ~~items.~~estimate ~~Cost~~ of ~~sales~~the atultimate ~~the~~costs ~~Angelo~~to ~~and~~be ~~Maxie's~~incurred ~~Steakhouses~~to ~~are~~settle ~~higher~~known ~~than~~claims atand ~~Chart~~claims ~~House~~incurred, ~~restaurants~~but asnot areported, ~~result~~as of ~~significantly~~the ~~more~~balance sheet ~~beef~~date. Our ~~entrees~~estimated ~~and~~liability ~~large~~is not ~~portion~~discounted ~~sizes.~~and ~~Accordingly,~~is ~~the~~based ~~Company~~on ~~anticipates~~a ~~that~~number ~~its~~of ~~cost~~assumptions ofand ~~sales~~factors, ~~percentage~~including ~~will~~historical ~~increase~~trends, asactuarial ~~relative~~assumptions, ~~revenue contribution from the Angelo~~ and ~~Maxie's~~economic ~~Steakhouses increases~~conditions. If ~~Part~~actual oftrends ~~this~~differ ~~increase~~from ~~will~~our ~~be mitigated by contractual arrangements with vendors limiting the effects~~estimates, ofour ~~inflation~~financial onresults ~~the~~could ~~Company's~~be ~~food costs~~impacted.

~~Restaurant labor~~NEW asACCOUNTING a percentage of restaurant revenues decreased by 0.4 percentage points in fiscal 2001, compared with fiscal 2000. This includes the impact of the January 1, 2001 increase in the Federal minimum wage and reflects operational performance improvements and increased attention to staffing levels by restaurant management. PRONOUNCEMENTS

~~Other~~In December ~~operating~~2004, ~~costs~~the asFASB aissued ~~percentage~~SFAS ofNo. ~~restaurant~~123(R), ~~revenues~~“Share-Based ~~increased~~Compensation.” byIt 4replaces SFAS No.~~2 percentage~~ ~~points~~123, in“Accounting ~~fiscal~~for ~~2001,~~Stock ~~compared~~Issued ~~with~~to ~~fiscal~~Employees.” ~~2000~~SFAS No. ~~This~~123(R) requires ~~increase~~that isthe ~~primarily~~compensation ~~due~~cost relating to share-based payment ~~increased~~transactions ~~marketing,~~be ~~insurance,~~recognized and ~~utility~~reported ~~costs~~in ~~over~~financial ~~the~~statements. ~~prior~~It ~~year.~~is Inrequired to ~~addition,~~be ~~new~~applied ~~restaurants~~by us beginning July 1, of2005. ~~which~~We ~~there~~intend ~~have~~to ~~been~~adopt ~~four~~SFAS ~~new~~No. ~~Angelo~~123(R) using ~~and~~the ~~Maxie's~~modified ~~opened~~prospective ~~since~~application ~~fourth~~method ~~quarter~~which ofrequires, ~~2000~~among other things, ~~typically~~that we recognize compensation expense for all awards outstanding at ~~deliver~~July a1, ~~lower~~2005 ~~margin~~for inwhich the ~~first~~requisite ~~months~~service ofhas ~~operations~~not asyet ~~the~~been ~~restaurant~~rendered. ~~gains~~The Company’s ~~operational~~adoption ~~efficiencies~~of SFAS No. 123(R) is not expected to have a material effect on our consolidated financial statements.

~~Rent as~~EFFECT aOF percentage of restaurant revenues increased by 1.1 percentage points in fiscal 2001, compared with fiscal 2000. This increase is primarily the result of a sale-leaseback transaction completed with five of the Company's restaurants during June 2000, whereby previously owned properties are currently leased. In addition, the Company has opened four Angelo and Maxie's restaurants since fourth quarter of 2000, offset in part by the closure of three restaurants during 2001. INFLATION

~~Selling, general,~~The ~~and~~Company ~~administrative~~no ~~expenses~~longer ~~decreased~~has any ~~$1.0 million~~operations, ortherefore ~~8.0%,~~management todoes ~~$11.2 million~~not inbelieve ~~fiscal~~inflation ~~2001,~~had ~~compared~~or ~~to $12.2 million in fiscal 2000. This~~will ~~decrease~~have ~~relates to lower salary and employment expenses as~~ a ~~result~~significant ofeffect ~~lower~~on ~~headcount~~Company ~~and tighter control of related discretionary spending~~operations.

~~Depreciation~~ITEM ~~and amortization increased $0~~7A.~~8 million,~~ ~~or 12.0%, to $7.8 million in fiscal 2001, compared to $6.9 million in fiscal 2000. The increase is primarily~~QUANTITATIVE ~~due~~AND toQUALITATIVE ~~$10.5 million~~DISCLOSURES ofABOUT ~~additional~~MARKET ~~equipment and improvements during 2001, primarily related to leasehold improvements at the new Angelo and Maxie's restaurants~~RISK. Amortization expense related to goodwill and trade name contributed $0.8 million, $0.8 million, and $0.6 million to these costs during fiscal 2001, 2000, and 1999, respectively. Amortization for goodwill and trade name will be eliminated in 2002 and beyond when the Company implements new accounting standards relative to intangible assets. See "New Accounting Pronouncements."

~~Pre-opening~~The Company is ~~costs~~exposed ~~were~~to ~~$0.6 million~~market risk from changes in ~~fiscal~~market ~~2001,~~rates ~~compared~~earned toon $5cash equivalents.~~3 million~~ The inimpact ~~fiscal~~on ~~2000.~~the ~~Pre~~Company’s results of operations of a one-~~opening~~point ~~costs~~market ~~primarily~~rate ~~reflect~~change ~~salaries~~on ~~and~~its cash equivalent ~~benefits~~balance ~~and~~as ~~training~~of ~~costs~~December ~~for~~27, ~~new~~2004, ~~employees.~~would not be material. The Company ~~opened~~does ~~two~~not ~~new~~use ~~Angelo~~derivative instruments ~~and~~to ~~Maxie's~~manage ~~restaurants~~borrowing costs or reduce exposure to adverse fluctuations in the ~~first~~interest ~~half~~rate. ofThe ~~2001;~~Company nodoes ~~restaurants~~not ~~were~~use derivative instruments for trading purposes.

1511

ITEM ~~opened during the second half of 2001~~8. ~~The~~FINANCIAL STATEMENTS ~~Company~~AND ~~currently~~SUPPLEMENTARY ~~has no plans to open any new restaurants during 2002~~DATA.

~~The Company incurred special charges of $5.7 million in fiscal 2001~~AM-CH, ~~primarily for impairment of assets and exit costs related to the termination of leases on five restaurants~~INC. ~~The~~ ~~impairment~~AND charges and a portion of the exit costs relate to two Angelo and Maxie's restaurants, one of which was closed in the fourth quarter of 2001 and the other of which is expected to be closed in 2002. The balance of the exit costs relate to three locations where restaurant development plans have been canceled. During fiscal 2000, the Company incurred special charges of $3.8 million, related to fixed asset write-downs due to impairment and exit costs related to the disposition of several Chart House restaurants. SUBSIDIARIES

~~Several asset~~CONSOLIDATED ~~disposals~~BALANCE ~~resulted in a $1.1 million net loss during fiscal 2001. Asset disposals during fiscal 2000 resulted in a $0.3 million net loss.~~ SHEETS

~~Interest expense~~(In ~~increased $1.9 million~~thousands, orexcept ~~62.6%,~~share to $4.9 million in fiscal 2001, compared to $3.0 million in fiscal 2000. This increase relates to higher debt balances, including third party debt which accrues interest at a higher rate than the debt under the Credit Agreement, offset in part by lower market rates. See "Liquidity and Capital Resources." data)

The Company recognized $0.9 million of other income during the first quarter of 2001, related to proceeds received from the sale of rights to a ground lease for one restaurant that had been closed.

	December 27, 2004			December 29, 2003
ASSETS
Current assets:
Cash and cash equivalents	$	10,996		$	4,551
Accounts receivable, net	222			600
Inventories	—			370
Prepaid expenses and other current assets	—			1,024
Total current assets	11,218			6,545
Equipment and improvements (held for sale, see Note 3):
Equipment	—			3,830
Leasehold interests and improvements	—			8,422
	—			12,252
Less: Accumulated depreciation and amortization	—			3,340
Equipment and improvements, net	—			8,912
Other non-current assets:
Restricted cash	2,029			2,627
Leased property under capital leases, net	1,017			1,077
Intangibles, net (held for sale, see Note 3)	—			2,370
Other non-current assets	—			497
Total other non-current assets	3,046			6,571
Total assets	14,264			22,028

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of non-current liabilities	33			30
Accounts payable	496			1,289
Accrued liabilities	2,603			2,859
Deferred gain	—			967
Total current liabilities	3,132			5,145
Non-current liabilities (excluding current portion):
Long-term portion of capital lease obligations	1,812			1,848
Other long-term obligations	110			752
Total non-current liabilities (excluding current portion)	1,922			2,600
Stockholders’ equity:
Preferred stock, $1.00 par value, 10,000,000 shares authorized; 4,134,736 and 4,134,736 shares issued and outstanding at December 27, 2004 and December 29, 2003, respectively	4,135			4,135
Common stock, $0.01 par value, 30,000,000 shares authorized; 2,005,131 and 2,001,713 shares issued and outstanding at December 27, 2004 and December 29, 2003, respectively	20			20
Additional paid-in capital	65,460			65,451
Retained deficit	(60,405		)	(55,323		)
Total stockholders’ equity	9,210			14,283
Total liabilities and stockholders’ equity	$	14,264		$	22,028

The ~~decline~~ inaccompanying ~~restaurant~~notes ~~revenues~~are ~~following~~an ~~the~~integral ~~events~~part of ~~September 11th~~these ~~challenged the Company's ability to achieve a level of profitability sufficient to utilize~~consolidated ~~net~~financial ~~operating loss and tax credit carryforwards and thereby realize the balance of its deferred tax asset~~statements. Accordingly, the Company has determined that, more likely than not, it will be unable to utilize the benefits of its deferred tax asset and increased its valuation allowance by $5.4 million during the third quarter of fiscal 2001, fully reserving the balance of its deferred tax asset.

The Company amended its Credit Agreement during October 2001, materially modifying its terms. Accordingly, the Company expensed $0.9 million of unamortized deferred financing costs related to the Credit Agreement during the third quarter of 2001. See "Liquidity and Capital Resources." 12

~~The Company issued Series A convertible preferred stock during June 2001. The Series A preferred stock is entitled to dividends at the rate of 10% per annum~~AM-CH, ~~based on the original issue price of $2~~INC.25 ~~per~~AND share. The Company paid and accrued preferred dividends in the aggregate of $0.4 million during 2001. The dividends paid were in the form of additional preferred shares. See "Liquidity and Capital Resources." SUBSIDIARIES

~~Fiscal~~CONSOLIDATED ~~2000~~STATEMENTS ~~Compared~~OF ~~to Fiscal 1999~~ OPERATIONS

Revenues increased $0.8 million, or 0.5%, to $141.7 million in fiscal 2000, compared to $140.9 million in fiscal 1999. The increase in revenues is primarily due to the reopening in May 2000 of one Chart House restaurant that had been closed due to a fire since 1998 and four new Angelo and Maxie's Steakhouses opened during 2000 (~~$10.4 million),~~In ~~2000 full-year performance of the first Angelo and Maxie's Steakhouses acquired during April 1999 ($3.7 million)~~thousands, ~~and~~except aper ~~6.3%~~share ~~increase in comparable restaurant revenues ($6.5 million~~data)~~. These increases were offset by a decrease in revenues related to 18 restaurants closed during 1999 and 2000 ($19.8 million).~~

Comparable restaurant revenues for the 37 Chart House and one Peohe's restaurants open for the entire 2000 and 1999 fiscal years increased 6.3%. Management attributes this growth to the continued focus on executing a quality menu with uncompromising customer service, and, in several locations, renewed interest following significant remodeling.

	Fiscal years ended
	December 27, 2004			December 29, 2003			December 30, 2002

Impairment of assets and restructuring Charges	(3,229		)	(5,728		)	(7,596		)
Interest expense, net	(72		)	(112		)	(2,615		)
Other income	204			204			202
Loss before discontinued operations	(3,097		)	(5,636		)	(10,009		)
Discontinued operations:
Income (loss) from operations	(3,002		)	283			742
Gain (Loss) on sale	1,945			(572		)	(2,433		)
Loss from discontinued operations	(1,057		)	(289		)	(1,691		)
Net loss	$	(4,154	)	$	(5,925	)	$	(11,700	)
Preferred dividends	928			928			910
Net loss applicable to common shares	$	(5,082	)	$	(6,853	)	$	(12,610	)
Net loss per common share - basic and diluted:
Continuing operations	$	(2.01	)	$	(3.29	)	$	(5.51	)
Discontinued operations	(0.53		)	(0.14		)	(0.85		)
	$	(2.53	)	$	(3.44	)	$	(6.37	)
Weighted-average number of common shares outstanding	2,005			1,995			1,981

~~Cost of sales as a percentage of restaurant revenues increased by 0.7 percentage points in fiscal 2000, compared with fiscal 1999.~~ The ~~increase~~accompanying isnotes ~~largely~~are ~~due~~an tointegral ~~the~~part ~~increase in the ratio~~ of ~~Angelo~~these ~~and~~consolidated financial statements.

1613

~~Maxie's~~AM-CH, ~~Steakhouses to total restaurants~~INC. ~~The~~AND ~~menu at Angelo and Maxie's contains significantly more beef items and large portion sizes. This results in higher food costs than have typically been realized at the Chart House restaurants.~~ SUBSIDIARIES

~~Restaurant labor~~CONSOLIDATED asSTATEMENTS aOF ~~percentage of restaurant revenues decreased by 1.2 percentage points in fiscal 2000, compared with fiscal 1999. In 1999, higher restaurant labor expense was~~STOCKHOLDERS’ ~~due to enhanced management staffing and the addition of several catering sales managers, as well as training expenditures related to a new menu roll out.~~ EQUITY

~~Other operating~~(In costs as a percentage of restaurant revenues decreased by 0.6 percentage points in fiscal 2000, compared with fiscal 1999. This decrease is primarily attributable to lower repair and maintenance expenses. thousands)

Rent as a percentage of restaurant revenues increased by 1.8 percentage points in fiscal 2000, compared with fiscal 1999. This increase is primarily the result of a sale-leaseback transaction completed with five of the Company's restaurants during June 2000, whereby previously owned properties are currently leased. In addition, the Company opened four Angelo and Maxie's Steakhouses during 2000.

	Preferred stock			Common stock			Additional paid-in					Total stockholders’
	Shares	Amount		Shares	Amount		capital		Retained deficit			equity
Balance, December 31, 2001 (Unaudited - see Note 1)	3,971	3,971		1,976	20		65,123		(35,860		)	33,254
Preferred dividends	164	164		—	—		205		(910		)	(541		)
Non-employee director compensation	—	—		12	—		88		—			88
Net loss	—	—		—	—		—		(11,700		)	(11,700		)
Balance, December 30, 2002	4,135	4,135		1,988	20		65,416		(48,470		)	21,101
Preferred dividends	—	—		—	—		—		(928		)	(928		)
Non-employee director compensation	—	—		14	—		35		—			35
Net loss	—	—		—	—		—		(5,925		)	(5,925		)
Balance, December 29, 2003	4,135	$	4,135	2,002	$	20	$	65,451	$	(55,323	)	$	14,283
Preferred dividends	—	—		—	—		—		(928		)	(928		)
Non-employee director compensation	—	—		3	—		9		—			9
Net loss	—	—		—	—		—		(4,154		)	(4,154		)
Balance, December 27, 2004	4,135	4,135		2,005	20		65,460		(60,405		)	9,210

~~Selling, general,~~The ~~and~~accompanying ~~administrative~~notes ~~expenses~~are ~~increased~~an ~~$0.8 million,~~integral orpart ~~6.6%,~~of tothese ~~$12.2 million in fiscal 2000, compared to $11.5 million in fiscal 1999. This~~consolidated ~~increase~~financial ~~reflects Company initiatives in 2000 to expand its restaurant base and build a corporate infrastructure to promote the Angelo and Maxie's concept and restaurant growth~~statements.

Depreciation and amortization decreased $0.9 million, or 11.6%, to $6.9 million in fiscal 2000, compared to $7.8 million in fiscal 1999. Depreciation and amortization decreased as a percentage of sales due to the fewer number of restaurants in operation. Furthermore, a sale-leaseback transaction entered into in June 2000 eliminated depreciation for five buildings. 14

~~Pre~~AM-opening costs were $5.3 million in fiscal 2000. These costs primarily reflect salaries and benefits and training costs for new employees. The Company opened four new Angelo and Maxie's Steakhouses and reopened two major Chart House restaurants (BostonCH, ~~MA and Weehawken, NJ) during 2000~~INC. AND SUBSIDIARIES

~~The Company~~CONSOLIDATED ~~incurred~~STATEMENTS ~~special~~OF ~~charges~~CASH of $4.9 million in fiscal 1999 for asset impairment write-downs and other charges related to the closure of eleven Chart House restaurants. In 2000, the Company incurred an additional $3.8 million restructuring charge for incremental exit costs and asset impairment write-downs for the remaining restaurants identified for disposal. The restructuring charge includes a net write-down of assets of $1.0 million and an additional restructuring charge of $2.8 million. FLOWS

~~Several asset~~(In ~~disposals resulted in a net loss of $0.3 million during fiscal 2000. Six restaurant properties were sold in 1999 generating gains of $0.7 million.~~ thousands)

Interest expense increased $1.0 million, or 50.7%, to $3.0 million in fiscal 2000, compared to $2.0 million in fiscal 1999. This increase reflects a full year of interest on the $15 million term loan obtained in mid-1999.

	Fiscal years ended
	December 27, 2004			December 29, 2003			December 30, 2002
Cash flows from operating activities:
Net loss	$	(4,154	)	$	(5,925	)	$	(11,700	)
Adjustments to reconcile net loss to cash flows used in operating activities:
Depreciation and amortization	82			792			3,569
Loss provision for impairment of assets and restructuring charges	3,229			5,728			7,596
Expenditures for exit from disposed properties	—			(29		)	—
Loss on sale of Chart House Business	—			572			2,433
(Gain) loss on disposal of assets	—			(6		)	37
Common stock issued in lieu of compensation	9			35			88
Amortization of debt issuance costs, included in interest expense	—			—			443
Gain on sale of assets	(1,945		)	—			—
Recognition of deferred gain	(967		)
Changes in working capital:
(Increase) decrease in accounts receivable	378			(59		)	2,117
Decrease in inventories	370			46			243
(Increase) decrease in prepaid expenses and other current assets	1,024			(50		)	(370		)
Decrease (increase) in other non-current assets	497			8			(471		)
Decrease in accounts payable	(793		)	(390		)	(8,381		)
(Decrease) increase in accounts payable to related parties	—			—			(1,510		)
Decrease in accrued liabilities	(256		)	(1,463		)	(2,341		)
Decrease in liabilities of discontinued operations	—			(170		)	(1,663		)
(Decrease) increase in other non-current obligations (excluding current portion)	(642		)	(169		)	347
Cash used in operating activities	(3,168		)	(1,080		)	(9,563		)
Cash flows from investing activities:
Proceeds from sale of Chart House Business	—			—			52,022
Expenditures for disposal of Chart House Business	—			(572		)	—
Expenditures for equipment and improvements	(9		)	(80		)	(971		)
Proceeds from sale of restaurant assets	9,985			—			—
Proceeds from sale of other assets	—			15			—
Cash (used in) provided by investing activities	9,976			(637		)	51,051
Cash flows from financing activities:
Net (payments) borrowings under revolving credit agreement	—			—			(14,395		)
Payments on term loans				(501		)	(10,836		)
Payments on borrowings from related parties	—			—			(5,000		)
Restricted cash for letters of credit	598			75			(2,702		)
Payments on acquisition indebtedness	—			—			(125		)
Preferred stock dividend payments	(928		)	(928		)	(465		)
Debt and equity issuance costs	—			—			(400		)
Reduction of obligations under capital leases	(33		)	(29		)	(174		)
Cash used in financing activities	(363		)	(1,383		)	(34,097		)
(Decrease) increase in cash	6,445			(3,100		)	7,391
Cash and cash equivalents, beginning of period	4,551			7,651			260
Cash and cash equivalents, end of period	$	10,996		$	4,551		$	7,651

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

The Company's primary operating objective in 2002 is to recapture the positive trend in comparable restaurant revenues following the devastating impact of the events of September 11, 2001. The Company experienced a 4.8% decline in comparable restaurant revenues in 2001 after posting a 6.3% increase in 2000. Although severely affected by last September's tragedy, the Company's revenues were also negatively impacted by the economic recession. Management believes that an improving 15

17AM-CH, INC. AND SUBSIDIARIES

~~economic~~NOTES ~~environment~~TO ~~coupled~~CONSOLIDATED ~~with~~FINANCIAL ~~targeted marketing strategies will permit it to achieve its revenue objectives.~~ STATEMENTS

~~The Company's~~DECEMBER ~~marketing strategies for the Chart House concept include continued focus on the seafood oriented menu and targeted marketing related to an early dining program~~27, ~~prix fixe dinner selection, and monthly seafood promotions. The marketing strategies for Angelo and Maxie's will primarily be oriented toward brand recognition for this relatively new concept.~~ 2004

Commodity price increases, especially for seafood and beef products, will decrease profit margins to the extent the Company is not able to pass on these cost increases to its customers. To partially mitigate this risk, the Company has entered into purchase agreements for certain frozen seafood and fresh beef items. In addition, the State of California, where the Company has a significant number of restaurants, increased the minimum wage from $6.25 to $6.75, effective January (1~~, 2002. Any future~~) NATURE ~~minimum~~OF ~~wage~~OPERATIONS ~~increases~~AND ~~legislated~~SUMMARY byOF ~~Federal~~SIGNIFICANT orACCOUNTING state authorities will have a detrimental impact on labor costs. Further, significant increases in utility costs similar to those experienced at a number of the Company's restaurants in 2001 will have an adverse impact on operating margins. Finally, continued availability and capacity issues relative to the Company's property and casualty insurance programs will have an adverse impact on operating margins. The Company continues to evaluate operating efficiencies to improve margins and protect against significant operating cost increases that cannot be mitigated by price increases. POLICIES

~~The Company~~Basis ~~has experienced net losses in each~~ of the last three fiscal years. Although improvements have been realized in cost of sales and labor costs, these improvements have been more than offset by increased costs for utilities, insurance, and rent. Additionally, the Company experienced a 4.8% decline in comparable restaurant revenues in 2001. Recent trends indicate that comparable restaurant revenues will improve in 2002 and, consequently, management anticipates maintaining and possibly improving operating margins. The maturation of the Angelo and Maxie's Steakhouses and cost saving initiatives implemented in October 2001 should permit the Company to achieve appropriate operating margins. Finally, changes in the Company's capital structure will be required to reduce the interest burden on the Company's operations. Presentation

The Company's consummated ~~financial~~the ~~condition~~sale ~~does~~of ~~not~~its ~~allow~~Chart ~~for~~House restaurants in July of 2002 and completed the ~~expansion~~sale of ~~either~~all of its ~~restaurant~~remaining ~~concepts~~Angelo in& ~~2002~~Maxie’s restaurants during 2004. The ~~Results~~Company ofhas no ongoing business operations. It has filed a certificate of dissolution and ~~changes~~is in the ~~Company's~~process ~~capital~~of ~~structure~~winding ~~will determine~~up ~~the~~its ~~nature~~affairs. Accordingly, ~~extent,~~the ~~and~~results ~~timing~~ of ~~future~~the ~~restaurant~~restaurants are ~~development.~~presented as discontinued operations.

~~LIQUIDITY~~The ~~AND~~Company ~~CAPITAL~~reports ~~RESOURCES~~ fiscal years under a 52/53-week format. This reporting method is used by many companies in the hospitality industry and is meant to improve year-to-year comparisons of operating results. The fiscal quarters for the Company consist of 13-week periods. Under this method, certain years will contain 53 weeks. Fiscal 2004, 2003 and 2002 contained 52 weeks.

	2001			2000			1999
Cash provided by operating activities	$	858		$	552		$	3,177
Business acquisition, net of cash		—			—			(10,383	)
Net proceeds from disposition of assets		98			17,835			7,363
Cash used in investing activities (other than business acquisition and dispositions of assets)		(10,517	)		(24,671	)		(13,837	)
Cash provided by financing activities		9,438			6,243			13,838
Net (decrease) increase in cash	$	(123	)	$	(41	)	$	158

On February 22, 2002, the Company effected a reverse stock split of its Common Stock pursuant to which each six shares of Common Stock issued and outstanding on such date were reclassified as and converted into one share of Common Stock immediately following the reverse stock split. The reverse stock split has been reflected in the accompanying financial statements and notes thereto as if it had occurred on December 25, 2000 for comparative purposes.

~~The Company~~Nature ~~requires the introduction~~ of capital in 2002 to retire or refinance in excess of $25 million of senior, secured debt under the Credit Agreement that matures on April 30, 2002. In December 2001, the Company's Board of Directors retained an investment bank to assist the management of the Company in a review of its strategic alternatives with a principal focus on identifying appropriate sources of capital to address the debt maturity matter. This process has Operations

18The Company was engaged in the restaurant business. At December 27, 2004 the Company did not operate any restaurants. The Company operated five Angelo and Maxie’s Steakhouses as of December 29, 2003.

~~identified~~Principles ~~a number~~ of capital sources, several of whom have expressed possible interest in making a significant investment in the Company. Although no definitive agreements have been reached with any of these potential investors, and no assurances can be given, management continues to believe that this process will be successful. While no assurances can be given, management believes that it will be able to continue to operate its restaurants and that the debt maturity matter will be satisfactorily resolved. Consolidation

~~Historically, the~~The ~~Company~~accompanying ~~required~~consolidated ~~capital~~financial ~~principally~~statements ~~for~~include the ~~construction~~accounts of ~~and~~all ~~opening~~subsidiaries ~~expenses~~of ~~for new restaurants and for~~ the ~~remodeling and refurbishing of existing restaurants~~Company. ~~The~~ All ~~Company~~significant ~~funded~~intercompany ~~its~~balances ~~capital requirements through debt financing, both with third party banks~~ and ~~related~~transactions ~~parties,~~have ~~equity~~been ~~financing,~~eliminated ~~and cash flows from operations~~in consolidation.

~~Cash from~~Use ~~operating activities did not change materially in 2001 compared to 2000. Cash from operating activities decreased in 2000 from 1999 due to the payment~~ of more than $5 million in pre-opening expenses, occupancy costs incurred at restaurants held for disposal, and increased insurance costs. The Company did not incur significant pre-opening costs in 2001. The Company received $1.0 million and $1.1 million in 2001 and 2000, respectively, from iDine for the advance sale of discounted food and beverage credits, and in turn paid $3.1 million during 2001 toward these advances and for marketing benefits, to iDine in connection with the Company's participation in iDine's frequent diner program. The current marketing agreement provides for $3 million of additional cash advances subsequent to December 31, 2001. In 2001 and 2000, landlords contributed $0.7 million and $2.3 million, respectively, to the Company toward the Company's development of five restaurants. Estimates

~~Cash used~~The inpreparation ~~investing~~of ~~activities~~financial statements in ~~2001~~conformity ~~consists~~with ofaccounting principles ~~capital~~generally ~~expenditures~~accepted ofin ~~$4.6 million related to~~ the ~~opening~~United States of ~~two~~America ~~new Angelo and Maxie's Steakhouses and capital~~requires ~~expenditures~~management atto ~~the~~make ~~existing~~estimates ~~restaurants~~ and ~~corporate~~assumptions ~~headquarters.~~that ~~Cash~~affect ~~used~~the inreported ~~investing~~amounts of ~~activities~~assets inand ~~2000~~liabilities ~~consists~~and disclosure of ~~capital~~contingent ~~expenditures~~assets ~~approaching~~and ~~$25 million offset by~~liabilities ~~$17.8 million~~at ~~in proceeds from~~ the ~~disposal~~date of ~~restaurant~~the ~~properties.~~financial ~~The~~statements ~~$10.6 million~~and ~~increase~~the inreported ~~capital~~amounts ~~expenditures~~of ~~from 1999 to 2000 reflects investment in four newly constructed~~revenues ~~Angelo~~ and ~~Maxie's~~expenses ~~Steakhouses.~~during ~~Capital~~the ~~expenditures~~reporting ~~in previous years reflects remodeling and renovation of existing restaurants~~period. Actual ~~The~~results ~~Company~~could ~~currently~~differ ~~projects~~from ~~2002~~those ~~capital expenditures to be approximately $1~~estimates.~~2 million.~~

Cash provided by financing activities in 2001 includes $7.1 million ($8.5 million before related costs) from the issuance of Series A preferred stock during the second quarter of 2001. Net proceeds were used primarily to repay a portion of the Company's subordinated indebtedness owed to a related party and construction costs related to the opening of new Angelo and Maxie's Steakhouses. The Company also increased its borrowings under its Credit Agreement by a net $0.6 million to fund investing and operating activities. The Company increased its borrowings from a related party by a net $3.0 million during 2001, primarily to fund capital expenditures. Cash provided by financing activities in 2000 included proceeds from a related party and net borrowings under its Credit Agreement. In 2000, the Company began making quarterly principal payments that were originally due under the Credit Agreement. Principal payments subsequent to September 24, 2001, have been deferred until the maturity date of April 30, 2002. Continued payments to the previous owners of the Angelo and Maxie's Steakhouse totaled $0.8 million in both 2001 and 2000. Payments under this agreement continue until April 2002. Reclassification

~~At the~~In ~~end~~addition ofto ~~2001,~~ the ~~Company~~reclassifications ~~had~~required ~~approximately~~by ~~$3.7 million~~FAS ~~available for future borrowings under the Credit Agreement~~144, ~~including~~certain ~~$0.5 million from a related party.~~prior ~~Amounts~~year ~~outstanding~~balances ~~under~~have ~~the~~been ~~Credit~~reclassified Agreement at the end of 2001 totaled $25.2 million and accrued interest at the prime rate, plus 2.75%, which was 7.5% at December 31, 2001. The balance outstanding under the Credit Agreement at December 31, 2001 includes $1.5 million funded by a related party, which accrues interest at 16.32% to ~~give~~conform ~~effect~~ to the ~~subordinate nature~~current ~~of the related party's participation in the Credit Agreement. The~~year ~~terms of the Credit Agreement were amended during October 2001, providing for, among other things, up to $2 million of additional liquidity provided by a related party, deferral of~~ presentation.

1916

~~principal~~Cash and ~~interest~~Cash payments, elimination of all but one financial covenant, and acceleration of the maturity date to April 30, 2002. The changes contained in the amendment constitute a material modification of the Credit Agreement; accordingly, deferred finance charges of $0.9 million related to the Credit Agreement were written-off and reported as an extraordinary item in the statement of operations during the third quarter of 2001. Equivalents

~~The Company~~Cash ~~also~~and ~~owes~~cash ~~$5.6 million~~equivalents toinclude ~~EGI-Fund~~investments that ~~(01) Investors,~~are ~~L.L.C.,~~readily aconvertible ~~related~~to ~~party,~~cash atwith ~~the~~an ~~end~~original ofmaturity ~~2001.~~date ~~The amount consists~~ of ~~an aggregate~~three ~~$5.0 million~~months inor ~~notes,~~less ~~due March 31, 2005,~~ and ~~accrued~~are ~~interest~~stated at ~~the applicable Eurodollar rate~~cost, ~~plus 16%,~~ which ~~was~~approximates ~~18.03%~~fair ~~at December 31, 2001~~value. The additional $0.6 million consists of accrued interest and consulting fees. Interest is payable at maturity or when certain leverage ratios are attained, which management believes will not be met during 2002.

~~In June 2001,~~Accounts the Company issued, pursuant to a rights offering, 3,777,778 shares of $1.00 par value Series A Preferred Stock and received net proceeds of $7.1 million ($8.5 million before related costs). Net proceeds were used primarily to repay a portion of the indebtedness owed to a related party and pay certain amounts owed to contractors and other expenses related to new restaurant openings and for certain other purposes. Dividends are payable at the rate of $0.225 per share per annum, accrue from the date of issuance, and are cumulative. The Credit Agreement currently restricts the payment of cash dividends. The terms of the Series A Preferred Stock provide that, to the extent that dividends may not be paid in cash, they are to be paid with additional shares of Preferred Stock. Dividends of $0.3 million in additional shares of Preferred Stock were issued in December 2001. An additional $0.1 million of dividends has been accrued as of December 31, 2001. The shares are convertible at the option of the holder at any time into shares of Common Stock on a six-for-one basis, subject to adjustment in certain circumstances, after giving effect to a one for six reverse split of the Company's Common Stock effective February 22, 2002. See "Note 15. 'Subsequent Events' of Item 8. 'Financial Statements."' The Company may, under certain circumstances, redeem the preferred shares after June 26, 2002, at redemption prices that increase each year. The initial redemption price is 150% of the original issuance price. Upon liquidation, dissolution, or if a change in control of the Company occurs, as defined, holders of the Series A preferred shares will be entitled to payment. The amount per share of the payment will be the greater of (a) $2.25, plus all accrued but unpaid dividends to date, plus, if after the payment is made, there are any remaining assets and funds, they will be distributed to holders of the Series A preferred shares and the Company's other equity securities, ratably, on an as-converted basis, provided that the distributions to holders of the Series A preferred shares will not exceed $4 million in the aggregate, subject to reduction in certain circumstances; or (b) the amount determined by dividing (i) the total amount available for distribution, by (ii) the total number of outstanding shares of common stock, determined on an as-converted basis. Receivable

~~The Company~~Accounts isreceivable ~~liable~~primarily ~~under~~consists ~~various~~of ~~capital~~receivables ~~and~~from ~~operating~~a ~~lease agreements, primarily~~ landlord related to ~~restaurant~~a ~~locations.~~terminated ~~The~~lease ~~Company~~as isof ~~also~~December ~~contingently~~27, ~~liable~~2004 ~~under~~and ~~letters~~credit card processors as of ~~credit~~December 29, 2003. The ~~primarily~~allowance ~~related~~for todoubtful ~~leasing~~accounts ~~obligations~~was ~~and~~$0.1 ~~self-insurance~~million ~~reserves~~at December 29, ~~and~~2003. The ~~guarantees~~Company ondid ~~various~~not ~~third~~record ~~party~~an ~~leasing~~allowance ~~and~~for doubtful ~~debt~~accounts ~~agreements.~~in 2004.

~~The following table summarizes the Company's contractual obligations as of December 31, 2001 (in 000's):~~ Inventories

			Payments due by year
	Total		Less than 1 year		2-3 years		4-5 years		After 5 years
Credit Agreement	$	25,150	$	25,150	$	—	$	—	$	—
Related party debt		5,577		—		—		5,577		—
Capital lease obligations (1)		5,864		522		914		851		3,577
Operating lease obligations (2)		61,065		6,341		12,018		11,199		31,507
Total	$	97,656	$	32,013	$	12,932	$	17,627	$	35,084

Inventories consisted primarily of food and beverage items and were valued at the lower of cost (first-in, first-out) or market.

20Equipment and Improvements

~~The following~~Depreciation ~~table~~and ~~summarizes~~amortization were recorded for financial reporting purposes using the ~~Company's~~straight-line ~~contingent~~method ~~liabilities~~over asthe estimated useful lives of ~~December~~the assets. Equipment was depreciated over lives ranging from three to eight years. 31 Leasehold interests and improvements were amortized over the shorter of the lease term, ~~2001~~including ~~(in~~planned ~~000's):~~extensions, or the asset life, ranging up to 25 years.

			Amount of contingent liability expiration per year
	Total		Less than 1 year		2-3 years		4-5 years		After 5 years
Letters of credit (1)	$	1,888	$	1,888	$	—	$	—	$	—
Property subleases (2)		3,151		223		644		416		1,868
Guarantees of debt (3)		4,000		—		4,000		—		—
Total	$	9,039	$	2,111	$	4,644	$	416	$	1,868

Maintenance, repairs, and minor purchases were expensed as incurred. Major purchases of equipment and facilities, and major replacements and improvements, were capitalized. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from the accounts and the resulting gains or losses are reflected in the accompanying consolidated statements of operations.

~~NEW~~The ~~ACCOUNTING~~Company recorded ~~PRONOUNCEMENTS~~ no depreciation or amortization expense in 2004 due to the sale of all the restaurants and trade name. Depreciation and amortization expense related to equipment and improvements utilized in the continuing business was $0.8 million and $1.3 million in 2003 and 2002, respectively. Depreciation and amortization expense related to equipment and improvements utilized in the Chart House Business was $2.2 million in 2002 and is included in discontinued operations.

InThe ~~June 2001,~~Company capitalized ~~the~~interest ~~Financial~~costs ~~Accounting~~directly ~~Standards~~related ~~Board~~to ~~("FASB")~~the ~~issued~~acquisition ~~Statement~~of equipment and improvements. Capitalized interest, net of ~~Financial~~accumulated ~~Accounting~~amortization, ~~Standards~~was No$0. ~~141~~0 ~~("SFAS~~million, No$0. ~~141")~~02 million, ~~"Business~~ ~~Combinations~~and $0."2 ~~SFAS~~million at ~~No. 141~~December ~~requires~~27, ~~all~~2004, ~~business~~December ~~combinations~~29, ~~initiated~~2003 ~~after~~and ~~June~~ December 30, ~~2001~~2002, torespectively, and bewas ~~accounted~~reflected ~~for~~with ~~using~~leasehold ~~the~~interests ~~purchase~~and ~~method~~improvements ofon ~~accounting.~~the balance sheet. The ~~adoption~~capitalized ofcosts ~~this~~were ~~statement~~amortized ~~had~~over nothe ~~impact~~respective onlives of the ~~Company's~~assets. Amortization ~~financial~~expense ~~statements~~related ~~for~~to ~~the~~these capitalized ~~year~~costs ~~ended~~was ~~December 31,~~less ~~2001~~than $0.1 million during fiscal years 2004, 2003 and 2002.

~~In June 2001,~~The ~~the~~Company ~~FASB~~evaluated ~~issued~~its ~~Statement~~equipment ofand ~~Financial~~improvements ~~Accounting~~for ~~Standards~~impairment ~~No. 142~~in accordance ~~("SFAS~~with ~~No. 142"),~~FAS ~~"Goodwill and Other Intangible Assets~~144.~~" SFAS No. 142~~ Such ~~requires~~evaluation indicated that, ~~upon adoption,~~ the ~~Company~~recorded ~~discontinue~~value ~~amortization~~ of ~~goodwill~~the ~~and~~restaurant ~~certain~~leasehold improvements ~~other~~was ~~intangible~~impaired ~~assets~~by $3.2 Inand ~~addition,~~$3.6 ~~the~~million ~~requirements~~in ~~include~~2004 ~~assessing goodwill~~ and ~~intangible assets for~~2003, ~~impairment~~respectively. See atNote ~~least~~3 ~~once per fiscal year.~~ “Impairment ~~losses~~of Assets ~~will~~and beRestructuring ~~reported as operating expenses~~Charges.” There was ~~The~~no ~~Company~~such ~~will~~impairment ~~adopt~~charges ~~the~~recorded ~~provisions~~in of2002, ~~this~~however, ~~statement~~$0.2 ~~for~~million ~~the first quarter~~ of corporate ~~2002.~~leasehold ~~Future financial~~improvements ~~statements,~~were ~~post~~written-off ~~adoption,~~in ~~will~~conjunction ~~reflect~~with ~~results~~the sale of ~~operations~~the ~~without~~Chart ~~goodwill~~House Business and ~~trade~~a ~~name~~corresponding ~~amortization~~restructuring ~~expense~~charge ~~as well as possible impairment charges~~was recorded. In ~~Amortization~~2003, ~~expense~~the ~~related~~Company torecorded ~~goodwill~~an ~~and~~additional ~~trade name was approximately~~ $0.~~8 million,~~1 ~~$0.8~~ million~~, and~~ ~~$0.6 million~~restructuring ~~for~~charge ~~fiscal~~resulting ~~years~~from ~~2001,~~the ~~2000,~~Company receiving ~~and~~lower ~~1999,~~than ~~respectively.~~anticipated ~~These~~proceeds ~~costs~~for ~~will~~the ~~not~~sale beand ~~included~~disposal inof ~~operations~~its furniture ~~beginning~~and inequipment ~~fiscal~~located ~~2002.~~at ~~The~~its ~~impact~~corporate onheadquarters ~~the~~after ~~Company's~~its ~~financial statements,~~lease ifexpired ~~any,~~in ~~for~~June ~~impairment charges from the adoption of SFAS No~~2003. ~~142 is not readily determinable.~~

~~In September 2001,~~Capital the FASB issued Statement of Financial Accounting Standards No. 143 ("SFAS No. 143"), "Accounting for Asset Retirement Obligations." SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and (or) the normal operation of a long-lived asset. This statement does not apply to obligations that arise solely from a plan to dispose of a long-lived asset, which is governed by the provisions of SFAS No. 144. The Company will adopt the provisions of this statement for the first quarter of 2002. The adoption of this statement will have no impact on the Company's financial statements. Lease

21The Company has subleased one of its restaurant properties to a third party, but was not relieved of its primary obligation under the original lease. This lease is characterized as a capital lease in accordance with FAS 13. In accordance with FAS 13, this lease continues to be reflected on the balance sheet as a capital lease. Amortization of the leased property is included with depreciation and amortization. The non-cash reduction of the capital lease obligation is reflected in other income.

In September 2001, the FASB issued Statement of Financial Accounting Standards No. 144 ("SFAS No. 144"), "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supersedes SFAS No. 121. The changes include, among other things, removing goodwill from its scope thereby eliminating the current requirement to allocate goodwill to long-lived assets tested for impairment. The new statement also defines detailed criteria for assets being "held for sale." The Company will adopt the provisions of this statement for the first quarter of 2002. The impact on the Company's financial statement, if any, for impairment charges from the adoption of SFAS No. 144 is not readily determinable. 17

~~EFFECT~~Restricted ~~OF INFLATION~~ Cash

~~Management~~The ~~does~~Company ~~not~~established ~~believe inflation has had~~ a ~~significant~~cash ~~effect~~collateral onaccount ~~Company~~equal ~~operations~~to ~~during~~ the ~~past several years. Although the Company generally has been~~full ~~able~~balance toof ~~substantially offset increases in~~ its ~~restaurant~~obligations ~~and~~under ~~operating~~outstanding ~~costs~~letters ~~resulting~~of ~~from inflation by increasing menu prices or making other adjustments, there can be no assurance that it will be able to do so in the future~~credit. Restricted ~~Although~~cash ~~management~~is ~~does~~reflected ~~not~~as ~~anticipate inflation having~~ a ~~material effect on restaurant operating income in 2002~~non-current asset, ~~future~~reflecting ~~increases~~the innature ~~labor~~of ~~cost,~~the ~~food~~underlying ~~cost,~~letters orof ~~other operating~~credit. See ~~costs,~~Note ~~including~~12 ~~insurance~~“Commitments and ~~utilities, could adversely affect the Company's operating results~~Contingencies. ”

~~SEASONALITY~~ Intangibles

~~The~~Intangibles, ~~Company's~~net ~~business~~of isaccumulated ~~seasonal in nature~~amortization, ~~with~~are ~~revenues and operating income for the second and third quarters greater than in the first and fourth quarters~~ as ~~the Company benefits from expanded seating capacity and the generally higher level of leisure travel in the spring and summer quarters.~~ follows:

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

	December 27, 2004		December 29, 2003

Trade name	$	—	$	2,333
Liquor licenses	—		37
	$	—	$	2,370

The ~~Company~~value isof the ~~exposed~~Angelo ~~to market risk from changes in interest rates on debt~~ and ~~changes~~Maxie’s intrade ~~commodity~~name ~~prices.~~was ~~The~~determined ~~Company's~~using ~~exposure~~industry toestimates ~~interest rate risk~~for ~~consists~~returns ofon ~~its~~assets ~~Credit~~and ~~Agreement~~was ~~that~~recorded iswhen ~~benchmarked~~the toasset ~~the~~was ~~prime~~purchased ~~rate.~~in 1999. The ~~impact~~trade onname ~~the~~was ~~Company's~~being ~~results~~amortized ofusing ~~operations of a one~~the straight-~~point~~line ~~interest~~method ~~rate~~over ~~change~~20 ~~on this outstanding debt~~years. ~~balance~~Beginning asin ~~of December 31~~2002, ~~2001,~~the ~~would~~Company beno ~~approximately~~longer ~~$0.3 million~~recognized inamortization ~~incremental interest~~ expense. on ~~The~~the ~~Company's~~trade ~~exposure~~name tobut ~~interest~~conducted ~~rate~~an ~~risk~~ongoing ~~also~~impairment ~~consists~~review of ~~its~~the ~~related~~asset ~~party debt~~in ~~that~~accordance iswith ~~benchmarked~~FAS ~~to the Eurodollar rate~~142. In ~~The~~2004, ~~impact on~~ the Angelo ~~Company'~~and Maxie’s ~~results~~trade ofname ~~operations~~was ofsold aas ~~one-point~~part ~~interest~~of ~~rate~~the ~~change~~sale onof ~~this~~Park ~~outstanding~~Avenue, ~~debt~~New York ~~balance as of December 31~~steakhouse. Accordingly, the ~~2001,~~Company ~~would~~recorded bea ~~approximately~~ $0.1 ~~million in incremental interest expense~~.6 ~~The~~million ~~Company~~charge ~~does~~related ~~not use derivative instruments~~ to ~~manage~~the ~~borrowing~~sale ~~costs~~of ~~or reduce exposure to adverse fluctuations in~~ the ~~interest rate~~trade name. The Company ~~also~~previously ~~does~~recorded impairment ~~not~~charges ~~use~~of ~~derivative instruments for trading purposes~~$2.0 ~~The Company purchases certain commodities such as beef, seafood, chicken,~~ and ~~cooking oil~~$1.7 ~~These commodities~~during ~~are~~2003 ~~generally~~and ~~purchased~~2002, ~~based upon purchase agreements or arrangements with vendors~~respectively. See ~~These~~Note ~~purchase~~3 ~~agreements~~“Impairment orof ~~arrangements~~Assets may contain features that fix the commodity price or define the price from an agreed upon formula. The Company does not use financial instruments to hedge commodity prices because these purchase arrangements help control the ultimate cost paid and ~~any~~ ~~commodity~~Restructuring ~~price fluctuations are generally short term in nature~~Charges. ”

22Self-Insurance Liability

~~ITEM~~The 8Company was self-insured through October 2002 for its workers’ compensation and general liability insurance programs, and was self-insured for its employee health insurance program. The ~~FINANCIAL~~health ~~STATEMENTS~~insurance program was discontinued after the sale of the last restaurant in November, 2004. The Company maintained stop-loss coverage with third party insurers to limit its total exposure. The accrued liability associated with these programs was based on management’s estimate of the ultimate costs to be incurred to settle known claims and claims incurred but not reported as of the balance sheet date. Our estimated liability was not discounted and is based on a number of assumptions and factors, including historical trends, actuarial assumptions, and economic conditions. If actual trends differed from our estimates, our financial results could be impacted. The Company is presently attempting to negotiate selling of the remaining liability related to older workers compensation claims in exchange for cancellation of a letter of credit.

Deferred ~~CHART HOUSE ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands)~~ Gain

ASSETS			December 31, 2001		December 25, 2000
Current assets:
	Cash		$	260	$	383
	Accounts receivable, net			2,721		3,764
	Inventories			2,365		2,401
	Prepaid expenses and other current assets			647		811
	Current portion of deferred tax asset			—		77
Total current assets				5,993		7,436
Equipment and Improvements:
	Equipment			36,481		35,387
	Leasehold interests and improvements			74,152		71,596
	Construction in progress			—		9,518
				110,633		116,501
Less: Accumulated depreciation and amortization				43,378		39,311
Equipment and improvements, net				67,255		77,190
Leased property under capital leases, less accumulated amortization of $2,520 in 2001 and $2,319 in 2000				1,779		1,979
Other assets, less accumulated amortization of $4,717 in 2001 and $3,860 in 2000:
		Goodwill		7,857		8,282
		Trade name		6,045		6,394
		Non-current portion of deferred tax asset		—		5,303
		Other assets		749		1,811
	Total other assets, net			14,651		21,790
Total assets			$	89,678	$	108,395

During 1997, the Company sold its interest in a partnership resulting in a gain of approximately $1.0 million. As part of the transaction, the Company guaranteed $4.0 million of the buyer’s note obligation to its lender through January 2004. The guarantee expired in 2004 and the deferred gain was recognized in the Statement of Operations. See Note 12 “Commitments and Contingencies.”

~~The accompanying~~Fair ~~notes~~Value ~~are an integral part~~ of ~~these~~Financial ~~consolidated balance sheets.~~ Instruments

23The carrying amounts of cash, cash equivalents, accounts receivable and payable, and accrued liabilities approximate fair value because of the short-term nature of the items. The carrying amounts of the Company’s debt and other payables approximate fair value either due to their short-term nature or the variable rates associated with these debt instruments.

~~CHART HOUSE ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except for share data)~~ 18

LIABILITIES AND STOCKHOLDERS' EQUITY		December 31, 2001			December 25, 2000
Current liabilities:
	Current portion of long-term obligations	$	25,390		$	4,210
	Accounts payable		10,107			19,596
	Accrued liabilities		12,518			12,720
Total current liabilities			48,015			36,526
Non-current liabilities (excluding current portion):
	Deferred payments on acquisition		—			250
	Long-term debt		—			20,600
	Long-term debt to related parties		5,577			2,000
	Long-term obligations under capital leases		2,832			3,058
Total non-current liabilities (excluding current portion)			8,409			25,908
Stockholders' equity:
	Preferred Stock, $1.00 par value, authorized 10,000,000 shares; 3,970,550 and 0 outstanding in 2001 and 2000, respectively		3,971			—
Common Stock, $0.01 par value, authorized 30,000,000 shares; 1,975,766 and 1,965,922 shares outstanding in 2001 and 2000, respectively			20			20
Additional paid-in capital			65,123			61,374
Retained deficit			(35,860	)		(15,433	)
Total stockholders' equity			33,254			45,961
		$	89,678		$	108,395

Income Taxes

~~The~~Deferred tax assets and liabilities are recognized for the future tax ~~accompanying~~consequences ~~notes~~attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are anmeasured ~~integral~~using ~~part~~enacted tax rates expected to apply in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance has been provided to reduce deferred tax assets to the amounts expected to be realized. The Company determined that, more likely than not, it will be unable to utilize the benefits of ~~these~~its ~~consolidated~~deferred ~~balance~~tax ~~sheets~~asset that existed at the beginning of 2001 and increased its valuation allowance in the third quarter 2001, resulting in a 100% deferred tax asset reserve. See Note 4 “Income Taxes.”

24Stock-Based Compensation

The Company has elected to account for stock-based compensation under the intrinsic value method of accounting. This method measures compensation ~~CHART~~cost ~~HOUSE~~as ~~ENTERPRISES~~the excess, ~~INC~~ if any, of the quoted market price of the Company’s common stock at the grant date over the amount the employee must pay for the stock. ~~AND~~The Company’s ~~SUBSIDIARIES CONSOLIDATED~~policy ~~STATEMENTS~~is OFto ~~OPERATIONS~~ grant stock options to purchase the Company’s stock at a price equal to fair market value at the date of grant. Had the Company elected to recognize compensation expense determined under the fair value method of accounting for stock-based compensation as prescribed by FAS 123 and FAS 148, the Company’s net loss available to common shares and per share amounts would reflect the following pro forma amounts (Inin thousands, except for per share data) :

				Fiscal years ended
		2004			2003			2002
				December 31, 2001			December 25, 2000			December 27, 1999
Net loss available to common shares:
Revenues				$	150,871		$	141,697		$	140,937
As reported		$	(5,082	)	$	(6,853	)	$	(12,610	)
Operating costs and expenses:
Pro forma		(5,082		)	(6,853		)	(13,273		)
	Cost of sales				47,695			46,347			45,059
Net loss per common shares - Basic and diluted
	Restaurant labor				42,603			40,499			42,015
As reported		$	(2.53	)	$	(3.44	)	$	(6.37	)
	Other operating costs				33,842			25,795			26,525
Pro forma		$	(2.53	)	(3.44		)	(6.70		)
	Rent				9,949			7,933			5,405
		Total restaurant costs			134,089			120,574			119,004
	Selling, general and administrative expenses				11,245			12,224			11,472
	Depreciation and amortization				7,753			6,922			7,830
	Pre-opening costs				597			5,266			—
	Impairment of assets and restructuring charges				5,699			3,810			4,890
	Loss (gain) on sales of assets				1,101			278			(742	)
		Total restaurant and operating costs			160,484			149,074			142,454
Loss from operations					(9,613	)		(7,377	)		(1,517	)
	Interest expense, net				4,958			3,049			2,023
	Other income				(900	)		—			—
Loss before income taxes and extraordinary item					(13,671	)		(10,426	)		(3,540	)
Provision for income taxes					5,380			—			—
Net loss before extraordinary item					(19,051	)		(10,426	)		(3,540	)
Extraordinary item, material modification of debt					942			—			—
Net loss				$	(19,993	)	$	(10,426	)	$	(3,540	)
Preferred stock dividends					434			—			—
Net loss available to common shares				$	(20,427	)	$	(10,426	)	$	(3,540	)
Net loss per common share before extraordinary item—Basic and diluted				$	(9.89	)	$	(5.31	)	$	(1.81	)
Extraordinary item, material modification of debt					(0.48	)		—			—
Net loss per common share—Basic and diluted				$	(10.37	)	$	(5.31	)	$	(1.81	)
Weighted-average shares outstanding					1,970			1,965			1,961

~~The accompanying~~See ~~notes~~also ~~are~~Note an8 ~~integral~~“Stock ~~part~~Option ~~of these consolidated statements~~Plans. ”

25Net Income/Loss Per Common Share

Basic earnings per share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding ~~CHART~~for ~~HOUSE~~the ~~ENTERPRISES~~reporting period. Diluted earnings per share reflect the potential dilution that could occur if all common stock equivalents were outstanding. Common stock equivalents are anti-dilutive, by definition, in periods reporting losses and, therefore, excluded from the weighted-average number of shares calculation. In addition, the Company issued Series A Preferred Stock during 2001, shares of which are convertible into shares of Common Stock on a six-for-one basis. ~~INC~~ There were approximately 4,135,000 shares of Series A Preferred Stock outstanding at December 27, 2004, that have also been excluded from the calculation of loss per share because their impact is anti-dilutive. ~~AND~~These amounts ~~SUBSIDIARIES CONSOLIDATED~~reflect ~~STATEMENTS~~the OFimpact ~~STOCKHOLDERS'~~of ~~EQUITY (In~~the ~~thousands)~~ reverse stock split. Diluted earnings per share equals basic earnings per share for all periods presented.

	Preferred Stock			Common Stock
							Additional paid-in capital		Retained deficit			Total stockholders' equity
	Shares	Amount		Shares	Amount
Balance, December 28, 1998	—	$	—	1,960	$	20	$	61,201	$	(1,467	)	$	59,754
Non-employee director compensation	—		—	2		—		75		—			75
Net loss	—		—	—		—		—		(3,540	)		(3,540	)
Balance, December 27, 1999	—		—	1,962		20		61,276		(5,007	)		56,289
Issuance of new shares	—		—	4		—		98		—			98
Net loss	—		—	—		—		—		(10,426	)		(10,426	)
Balance, December 25, 2000	—		—	1,966		20		61,374		(15,433	)		45,961
Preferred Stock issuance, net	3,778		3,778	—		—		3,323		—			7,101
Preferred dividends	193		193	—		—		241		(434	)		—
Employee stock plan	—		—	4		—		45		—			45
Non-employee director compensation	—		—	6		—		140		—			140
Net loss	—		—	—		—		—		(19,993	)		(19,993	)
Balance, December 31, 2001	3,971	$	3,971	1,976	$	20	$	65,123	$	(35,860	)	$	33,254

~~The accompanying~~Segment ~~notes are an integral part of these consolidated statements.~~ Reporting

26Reportable operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in evaluating performance. The Company believes its restaurants meet the criteria supporting aggregation of all restaurants into one operating segment.

New Accounting ~~CHART HOUSE ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)~~ Pronouncements

				Fiscal years ended
				December 31, 2001			December 25, 2000			December 27, 1999
Cash flows from operating activities:
	Net loss			$	(19,993	)	$	(10,426	)	$	(3,540	)
	Adjustments to reconcile net loss to cash flows provided by operating activities:
		Extraordinary item, material modification of debt			942			—			—
		Depreciation and amortization			7,753			6,922			7,830
		Amortization of debt issuance costs			226			180			92
		Deferred income taxes			5,380			—			—
		Common Stock issued in lieu of compensation			140			—			75
		Impairment of assets and restructuring charges			5,699			3,810			4,890
		Loss (gain) on sales of assets			1,101			278			(742	)
		Change in net current liabilities:
			Decrease (increase) in accounts receivable		1,043			(795	)		306
			Decrease (increase) in inventories		36			(119	)		152
			Decrease (increase) in prepaid expenses and other assets		164			(281	)		30
			(Decrease) increase in accounts payable		(2,112	)		3,311			923
			Increase (decrease) in accrued liabilities		479			(5,294	)		(6,839	)
			Increase in deferred income		—			2,966			—
	Cash provided by operating activities				858			552			3,177
Cash flows from investing activities:
	Expenditures for equipment and improvements				(10,532	)		(24,403	)		(13,839	)
	Reductions (increases) in other assets				15			(268	)		2
	Net proceeds from disposition of assets				98			17,835			7,363
	Business acquisition, net of cash				—			—			(10,383	)
		Cash used in investing activities			(10,419	)		(6,836	)		(16,857	)
Cash flows from financing activities:
	Principal payments on obligations under capital leases				(210	)		(205	)		(724	)
	Net borrowings under revolving credit agreement				2,800			6,900			750
	Proceeds from issuance of debt				—			—			15,000
	Payments of long-term debt				(2,250	)		(1,500	)		—
	Proceeds from long-term debt from related parties				3,579			2,000			—
	Payments of long-term debt from related parties				(579	)		—			—
	Debt/equity issuance costs				(1,701	)		(300	)		(688	)
	Payments under acquisition agreement				(746	)		(750	)		(500	)
	Proceeds from issuance of preferred stock				8,500			—			—
	Proceeds from issuance of common stock				45			98			—
		Cash provided by financing activities			9,438			6,243			13,838
(Decrease) increase in cash					(123	)		(41	)		158
Cash, beginning of year					383			424			266
Cash, end of year				$	260		$	383		$	424

In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Compensation.” It replaces SFAS No. 123, “Accounting for Stock Issued to Employees.” SFAS No. 123(R) requires that the compensation cost relating to share-based payment transactions be recognized and reported in financial statements. It is required to be applied by us beginning July 1, 2005. We intend to adopt SFAS No. 123(R) using the modified prospective application method which requires, among other things, that we recognize compensation expense for all awards outstanding at July 1, 2005 for which the requisite service has not yet been rendered. The Company’s adoption of SFAS No. 123(R) is not expected to have a material effect on our consolidated financial statements.

27(2) SALE OF THE ANGELO AND MAXIE’S BRAND AND RELATED OPERATING ASSETS

In August 2003, the Board of Directors approved the sale of three of the Company’s then-existing five steakhouses located in Midtown Manhattan, New ~~CHART~~York, ~~HOUSE~~Reston, ~~ENTERPRISES~~Virginia, ~~INC~~ and Washington, D.C. The ~~AND~~purchaser, ~~SUBSIDIARIES CONSOLIDATED~~McCormick ~~STATEMENTS~~and OFSchmick ~~CASH~~Restaurant ~~FLOWS~~Corp. (~~continued~~“M&S”) ~~(In~~, converted ~~thousands)~~ all three steakhouses to another restaurant concept following the sale. On January 7, 2004 the sale was completed and the Company received approximately $5.6 million in cash.

		Fiscal years ended
		December 31, 2001		December 25, 2000			December 27, 1999
Supplemental cash flow disclosure:
Cash paid during the year for:
Interest		$	4,292	$	2,539		$	1,695
Income taxes		$	59	$	158		$	(395	)
Non-cash investing and financing activities:
	Liabilities incurred for construction in progress	$	—	$	6,574		$	351
	Capitalized lease obligations released	$	—	$	(115	)	$	(197	)
	Deferred payment obligation incurred for business acquisition	$	—	$	—		$	1,750

In September 2003, the Board of Directors approved a proposal to sell the Company’s remaining two steakhouses and certain Angelo and Maxie’s intellectual property. In September of 2004, the stockholders approved an asset purchase agreement for the sale of the remaining two Angelo and Maxie’s steakhouses and certain intellectual property. In November 2004, the Company entered into a lease termination agreement with the landlord of the West Palm Beach steakhouse. The West Palm Beach, Florida steakhouse was closed on November 15, 2004. The sale of the remaining Angelo & Maxie’s restaurant located on Park Avenue in New York, was completed on November 30, 2004 for approximately $4.5 million.

~~The~~(3) IMPAIRMENT ~~accompanying~~OF ~~notes~~ASSETS ~~are~~AND anRESTRUCTURING ~~integral part of these consolidated statements.~~ CHARGES

28On January 1, 2002, the Company adopted FAS 142 which requires, among other things, that effective January 1, 2002, goodwill and certain other intangible assets resulting from a business combination accounted for as a purchase no longer be amortized, but be subject to ongoing impairment review. In connection with the transitional goodwill and certain other intangible assets impairment evaluation, FAS 142 required the Company to perform an assessment of whether there was an indication that goodwill and certain other intangible assets were impaired as of the date of adoption. To accomplish this evaluation, the Company determined the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and certain other intangible assets, to those reporting units as of the date of adoption.

~~CHART~~During ~~HOUSE~~the ~~ENTERPRISES~~second quarter of 2004, ~~INC~~ due to the pending sale of the then remaining two restaurants, the Company recorded a $797,000 provision for loss relating to the sale and a $149,000 provision for loss on corporate fixed assets. During ~~AND~~the ~~SUBSIDIARIES~~ third quarter of 2004, as a result of executing a lease termination agreement with the West Palm Beach restaurant, the Company recorded a $2.3 million impairment charge.

During ~~NOTES~~the TOsecond ~~CONSOLIDATED~~quarter ~~FINANCIAL~~2003, ~~STATEMENTS~~ the Company completed its review as required by FAS 142 by comparing its carrying value for the Angelo and Maxie’s restaurant business to estimated fair market value. In determining the estimated fair market value of its assets, management considers several factors requiring the exercise of its business judgment. Such business judgment includes developing valuation multiples such as the ratio of total capitalized value to restaurant earnings before interest, taxes, depreciation, and amortization for an industry peer group of publicly traded companies and applying those ratios to the Company’s historical and projected operating performance.

~~DECEMBER 31, 2001~~ 20

(Such evaluation indicated that the recorded value of the Angelo and Maxie’s trade name was impaired by $0.7 million and that the recorded value of the restaurant leasehold improvements were impaired by $3.6 million at the end of the second quarter 2003. In addition, on June 30, 2003, the Company’s lease on its Chicago corporate headquarters expired and the Company relocated to a space commensurate with its current needs. In connection therewith, the Company recorded a $0.1) ~~NATURE~~million restructuring OFcharge ~~OPERATIONS~~during ~~AND~~the ~~SUMMARY~~second OFquarter ~~SIGNIFICANT~~2003 ~~ACCOUNTING~~resulting ~~POLICIES~~ from the Company receiving lower than anticipated proceeds from the sale and disposal of its furniture and equipment located at the vacated facility. During the fourth quarter 2003, the Company completed an additional review of the carrying value of the Angelo and Maxie’s restaurant business in relation to estimated fair market value. Such evaluation indicated that the recorded value of the Angelo and Maxie’s trade name was further impaired by $1.3 million due to a reduction in the total consideration being offered for the proposed sale of the Angelo Maxie’s trade name and two remaining restaurant locations. A related charge to continuing operations of $1.3 million was recorded in the fourth quarter 2003. See Note 2 “Sale of the Angelo and Maxie’s Brand and Related Operating Assets.”

The ~~Going~~following ~~Concern~~ table illustrates the amounts paid and charged against the liability for restructuring, severance, and other exit costs (in thousands):

The consolidated financial statements of Chart House Enterprises, Inc. and its wholly-owned subsidiaries (the "Company") have been prepared on the basis of the Company's continuing as a going concern. The Company has experienced net losses in each of the last three fiscal years. These results, in conjunction with an extensive restaurant renovation and expansion program, have severely strained the Company's capital resources. At December 31, 2001, the Company had in excess of $25 million of senior, secured debt that matures on April 30, 2002. See Note 8. "Debt." The debt maturity issue raises substantial doubt about the Company's ability to continue as a going concern. Since December 2001, the Company has been conducting a review of strategic alternatives with a principal focus on identifying appropriate sources of capital to address the debt maturity matter. This process has identified a number of capital sources, several of whom have expressed possible interest in making a significant investment in the Company. Although no definitive agreements have been reached with any of these potential investors, and no assurances can be given, management continues to believe that this process will be successful.

	2004			2003			2002

Beginning balance	$	243		$	1,743		$	1,687
Amount expensed	542			162			2,021
Amount paid	(243		)	(1,662		)	(1,965		)
Ending balance	$	542		$	243		$	1,743
Due within 12 months	$	542		$	243		1,377
Non-current portion	$	—		$	—		366

~~In the~~The ~~event~~liability ~~the~~at ~~Company~~December ~~is not able to obtain sufficient capital by April 30~~27, ~~2002~~2004 torepresents ~~retire~~severance ~~the~~due ~~senior, secured debt, the lenders have the right~~ to ~~foreclose on their~~two ~~collateral.~~former ~~Alternatives~~executives toof ~~foreclosure include~~AM-CH, ~~among~~Inc. ~~others,~~under ~~extension of~~ the ~~maturity date or a filing for reorganization by the~~ Company’s ~~under~~Board ~~the~~approved ~~Federal Bankruptcy Code. While no assurances can be given, management believes that the~~severance ~~Company~~policy ~~will~~and beis ~~able~~included towith ~~continue~~accrued toliabilities ~~operate~~on ~~its restaurants and that~~ the ~~debt maturity matter will be satisfactorily resolved. The~~ accompanying ~~financial statements do not include any adjustments that~~ ~~might~~Consolidated ~~result~~Balance ~~from~~Sheet ~~the~~as ~~outcome~~ of ~~this~~December ~~uncertainty.~~27, 2004.

The ~~Basis~~liability at December 29, 2003 represents severance owed to an employee terminated as a result of ~~Presentation~~ the sale of the Chart House Business. This liability is included with accrued liabilities on the accompanying consolidated balance sheet as of December 29, 2003.

~~The~~In ~~Company~~June ~~reports~~2002, ~~fiscal~~the ~~years~~Financial ~~under~~Accounting aStandards ~~52/53-week~~Board ~~format.~~issued ~~This~~Statement of ~~reporting~~Financial ~~method~~Accounting isStandards ~~used~~No. by146, ~~many~~“Accounting ~~companies~~for inCosts ~~the~~from ~~restaurant~~Exit ~~and~~or Disposal ~~retail~~Activities” ~~industries~~(“FAS 146”). FAS ~~and~~146 isrequires, ~~meant~~among toother ~~improve~~things, ~~year-to-year~~that ~~comparisons~~a ofliability ~~operating~~for ~~results.~~costs ~~The~~associated ~~fiscal~~with ~~quarters~~an exit ~~for~~or disposal activity be recognized when the ~~Company~~liability ~~consist~~is incurred rather than at the time of ~~13-week~~commitment ~~periods~~to a formal shutdown plan. The ~~Under~~adoption ~~this~~of ~~method,~~FAS ~~certain~~146 is effective for all ~~years~~exit ~~will~~or ~~contain~~disposal 53activities ~~weeks~~initiated subsequent to December 31, 2002. The ~~Fiscal~~Company ~~2001~~has ~~contains~~adopted 53FAS ~~weeks,~~146 ~~while~~as ~~fiscal~~of ~~2000~~January 1, ~~and~~2003 ~~1999~~with ~~contain~~no 52material ~~weeks~~impact.

~~On February 22, 2002, the Company effected a reverse stock split~~ (~~"Reverse Stock Split"~~4) ~~of its Common Stock, par value $0.01 per share ("Common Stock"), pursuant to which each~~ INCOME six shares of Common Stock issued and outstanding on such date were reclassified as and converted into one share of Common Stock immediately following the Reverse Stock Split. See Note 15. "Subsequent Events." The Reverse Stock Split has been reflected in the accompanying financial statements and notes thereto as if the reverse split had occurred at the beginning of fiscal 1999. TAXES

The ~~Nature~~provision for income taxes consists of ~~Operations~~ the following components (in thousands):

The Company is engaged in the restaurant business. At December 31, 2001, the Company operated 38 Chart House restaurants, one Peohe's restaurant, and six Angelo and Maxie's Steakhouses. The restaurants are located primarily on the East and West coasts of the United States. At December 25, 2000 and December 27, 1999, the Company operated 46 and 51 restaurants, respectively.

	Fiscal years ended
	December 27, 2004			December 29, 2003			December 30, 2002

Current:
State	$	(290	)	$	(205	)	$	(260	)
Federal	(1,311		)	(925		)	(1,175		)
Total current	(1,601		)	(1,130		)	(1,435		)
Deferred:
State	290			205			260
Federal	1,311			925			1,175
Total deferred	1,601			1,130			1,435

2921

The ~~Principles~~income tax effects of temporary ~~Consolidation~~ differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases that give rise to significant portions of deferred tax assets and liabilities are as follows (in thousands):

The accompanying consolidated financial statements include the accounts of all subsidiaries of the Company. All significant intercompany balances and transactions have been eliminated in consolidation.

	December 27, 2004			December 29, 2003

Deferred tax assets:
Net operating loss carryforwards	$	22,293		$	20,620
Deferred tax credits, including targeted jobs and FICA credit carryforwards	—			8,460
Excess of book depreciation over tax depreciation	—			1,240
Excess of book expense over tax expense related to restructuring charges	—			231
Compensation and benefits	(94		)	773
Excess of book expense over tax expense related to fixed asset impairments	—			1,332
Excess of book expense over tax expense related to capitalized leases	—			779
Other deferred costs	9			396
Deferred tax assets	22,208			33,831
Deferred tax liabilities:
State income taxes	—			—
Compensation and benefits	—			—
Deferred tax liabilities	—			—
Net deferred tax assets	22,208			33,831
Less: Valuation allowance	(22,208		)	(33,831		)
Net deferred tax assets	$	—		$	—

Net ~~Use~~operating ofloss ~~Estimates~~ carryforwards were $57.9 million and $53.6 million at December 27, 2004 and December 29, 2003, respectively. Operating loss carry forwards expire annually beginning in the year 2018. Tax credits expire in various years beginning in the year 2010.

The ~~preparation~~provision offor ~~financial~~income ~~statements~~taxes inreconciles ~~conformity with accounting principles generally accepted in the United States requires management~~ to ~~make estimates and assumptions that affect~~ the ~~reported~~ amounts ofcomputed ~~assets~~by ~~and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues~~applying ~~and expenses during~~ the ~~reporting~~Federal ~~period.~~statutory ~~Actual~~rate ~~results~~to ~~could~~income ~~differ~~before ~~from~~tax ~~those~~as ~~estimates.~~follows (in thousands):

Reclassification

	Fiscal years ended
	December 27, 2004			December 29, 2003			December 30, 2002

Statutory Federal income tax benefit	$	(1,413	)	$	(1,967	)	$	(3,978	)
FICA tax credit, net	—			(140		)	(617		)
State income taxes, net of Federal benefit	(191		)	(257		)	(496		)
Keyman’s insurance	—			—			2
Meals and entertainment	3			6			8
Deferred tax asset valuation allowance	1,601			2,358			5,081
Provision for income taxes	$	—		$	—		$	—

~~Certain prior year balances have been reclassified to conform to the current year presentation.~~ 22

~~Inventories~~ (5) DEBT

~~Inventories~~During ~~consist~~the ofsecond ~~food~~quarter ~~and~~2003, ~~beverage~~the ~~items~~Company ~~and~~prepaid, ~~are~~without ~~valued~~penalty, two atnotes ~~the~~aggregating ~~lower~~to $0.5 million that were held by one of ~~cost~~its ~~(first-~~landlords. The notes originally were in the aggregate amount of $0.7 million, ~~first-out)~~amortized over orseven ~~market~~year terms, bore interest at 9.0%, and were payable in monthly installments.

~~Equipment and Improvements~~ (6) LEASES

~~Depreciation~~The ~~and~~Company ~~amortization~~was ~~are~~contingently ~~recorded~~liable, in certain circumstances, for lease ~~financial~~obligations ~~reporting~~with ~~purposes~~respect ~~using~~to 20 properties subleased or assigned to third parties in the ~~straight-line~~event ~~method~~of ~~over~~a default by the ~~estimated~~third ~~useful~~party. In ~~lives~~connection with the sale of the Chart ~~assets.~~House ~~Leasehold~~Business, ~~interests~~the ~~and~~Company ~~improvements~~received ~~are~~a ~~amortized~~guarantee ~~over~~from ~~the~~Landry’s ~~shorter~~Restaurant’s, Inc. (“Landry’s”) with respect to 19 of ~~the~~these ~~lease~~properties. ~~term~~On July 30, ~~including~~2004, ~~planned~~the Company ~~extensions~~reached a settlement with Landry’s on all pending litigation matters, including ora default by a subsidiary of Landry’s under one of the ~~asset~~Chart ~~life~~House leases. In addition, ~~Equipment~~the isCompany ~~depreciated~~received ~~over~~an ~~lives~~unconditional ~~ranging~~and irrevocable guarantee from Landry’s ~~three~~for the full and timely payment and performance of all the leases toincluded ~~eight~~in ~~years~~the sale of the Chart House Business to Landry’s. ~~Leasehold~~With ~~interests~~respect ~~and~~to the ~~improvements~~property ~~are~~not ~~depreciated~~covered ~~over~~by ~~lives~~the ~~ranging~~Landry’s guarantee, the Company holds a standby letter of credit from the sublessee of this property equaling one toyear’s ~~40 years.~~rent on the property.

~~Maintenance~~On January 7, ~~repairs~~ 2004, ~~and~~the ~~minor~~Company ~~purchases~~completed ~~are~~a ~~expensed~~sale asof ~~incurred.~~three ~~Major~~of ~~purchases~~its then-existing offive ~~equipment~~steakhouses ~~and~~located ~~facilities~~in Midtown Manhattan, ~~and~~New ~~major~~York, ~~replacements~~Reston, Virginia, and ~~improvements~~Washington, ~~are capitalized~~D.C. In conjunction ~~When~~with ~~assets~~this ~~are sold~~transaction, orthe ~~otherwise~~Company ~~disposed~~was ~~of,~~released ~~the~~from ~~cost~~its liabilities ~~and~~on ~~related~~the ~~accumulated~~operating ~~depreciation~~leases ~~and~~with ~~amortization~~respect ~~are~~to ~~removed~~each ~~from~~of the ~~accounts~~three ~~and~~sold properties. In connection with the ~~resulting~~sale of ~~gains~~the orfinal ~~losses~~steakhouse ~~are~~on ~~reflected~~Park Avenue in New York, the ~~accompanying~~Company was released ~~consolidated~~from ~~statements~~its ofliability ~~operations.~~on the lease with respect to the property.

As ~~Construction~~of December 27, 2004, the Company’s commitment under its operating leases for minimum rental payments through the end of its primary lease terms was as follows (in ~~Progress~~ thousands):

Administrative costs incurred to construct new assets and get them ready for their intended use are capitalized as a component of cost. These costs primarily include salary and travel expenses for construction managers employed by the Company. Interest costs incurred during the construction period are capitalized and amortized on a straight-line basis over the shorter of the lease term, including planned extensions, or the asset life once the site is ready for its intended use.

Fiscal years ending
2005	165
2006	165
2007	165
2008	165
Thereafter	70
	$	730

30The Company is committed under a long-term capital lease agreement at a location it has subleased to a third party. This capital lease continues to be reflected on the balance sheet in accordance with FAS 13. Non-cash reductions to the liability are reflected as other income in continuing operations. Amortization of the leased property under this capital lease is included in depreciation and amortization on the consolidated statements of operations. Non-cash interest expense related to this capital lease was approximately $0.2 million for each of 2004, 2003, and 2002. At December 27, 2004, minimum lease payments due under this capital lease are as follows (in thousands):

~~Intangibles and Other Assets~~ 23

Goodwill represents the excess of purchase price over the fair market value of net identifiable assets acquired. Goodwill was $7,857,000 and $8,282,000, net of accumulated amortization of $3,387,000 and $3,028,000, at December 31, 2001 and December 25, 2000, respectively. Goodwill recorded prior to 1999 is being amortized using the straight-line method over 40 years. Goodwill acquired in 1999 is being amortized using the straight-line method over 20 years. The amount of amortization expense recorded was $403,000, $426,000, and $416,000 in 2001, 2000, and 1999, respectively. Approximately $1,325,000 in carrying value of goodwill was written-off in 2000 due to the sale of four restaurant properties. In 1999, $379,000 in carrying value of goodwill was written-off upon the sale of one restaurant and $826,000 was written-down as part of the asset write-down for restaurants included in the restructuring charges. See Note 4. "Impairment of Assets and Restructuring Charges." Beginning in 2002, the Company will no longer recognize amortization expense on goodwill in accordance with newly issued accounting pronouncements. See "New Accounting Pronouncements."

Fiscal years ending
2005	205
2006	205
2007	205
2008	205
2009	205
Thereafter	2,745
Total minimum lease payments	3,770
Less: Amount representing interest	1,925
Total obligation under capital lease	1,845
Less: Current portion	33
Long-term obligation under capital leases, with a weighted-average interest rate of 9.5%	$	1,812

The ~~value~~ ofCompany the Angelo and Maxie's trade name was determined using industry estimates for returns on assets. The value of the trade name was $6,045,000 and $6,394,000, net of accumulated amortization of $930,000 and $581,000, at December 31, 2001 and December 25, 2000, respectively, and is ~~being~~also ~~amortized~~contingently ~~using the straight-line method over 20 years. The amount of amortization expense recorded was $349~~liable,~~000,~~ ~~$349,000, and $233,000~~ in ~~2001,~~certain ~~2000~~circumstances, ~~and~~for leases ~~1999,~~at ~~respectively.~~locations ~~Beginning~~it ~~in 2002, the Company will~~ no longer ~~recognize~~operates. ~~amortization~~See ~~expense~~Note on12 ~~the~~“Commitments ~~trade~~and ~~name in accordance with newly issued accounting pronouncements~~Contingencies. ~~See "New Accounting Pronouncements."~~ ”

~~Other~~(7) EMPLOYEE ~~assets~~BENEFIT include costs of liquor licenses of $525,000 and $571,000 at December 31, 2001 and December 25, 2000, respectively. The carrying values of liquor licenses are recorded at the lower of cost or net realizable value and are not being amortized. A substantial number of licenses are transferable and were issued in California, which has a very restricted market for new licenses. For this reason, management believes the licenses, which have indefinite legal lives, will retain their value. PLANS

~~Other assets also include debt issuance costs of $43,000 and $847,000, net of accumulated amortization of $11,000 and $272,000, at December 31, 2001 and December 25, 2000, respectively.~~ The ~~amounts reflect fees paid in conjunction with the~~ Company'’s ~~debt~~terminated ~~facilities~~its ~~and~~401(k) ~~are~~Plan ~~being~~effective amortized over the respective terms of the facilities. Amortized costs reflected in interest expense in the statements of operations were $227,000, $180,000, and $92,000 in 2001, 2000, and 1999, respectively. During OctoberSeptember ~~2001~~30, ~~the Company amended its bank credit facility. As the~~ ~~amendment constituted a material modification of the facility, unamortized debt issuance costs of $942,000 were written-off and are reflected as an extraordinary item in the statements of operations~~2002. ~~The unamortized balance at December 31, 2001, relates to long-term debt to related parties. See Note 8. "Debt."~~

(8) STOCK OPTION ~~Long-Lived Assets~~ PLANS

~~The~~After ~~Company~~the ~~evaluates~~reverse ~~its~~stock ~~assets~~split, ~~and~~all ~~properties~~outstanding ~~for~~options ~~impairment,~~entitle inthe holder ~~accordance~~thereof ~~with~~to ~~Financial~~purchase, ~~Accounting~~upon ~~Standards~~exercise, ~~Board~~16.67% ~~Statement~~of ~~No. 121,~~the ~~"Accounting~~number ~~for~~of shares of ~~Long-Lived~~Common ~~Assets~~Stock ~~and~~which ~~for~~such ~~Long-Lived~~holders ~~Assets~~would have been able to bepurchase ~~Disposed~~upon exercise of" ~~("SFAS~~their ~~No. 121"),~~options ~~when~~immediately ~~events~~preceding orthe ~~circumstances~~reverse ~~indicate~~stock ~~that~~split ~~carrying~~at ~~amounts~~the ~~may~~same aggregate ~~not~~price required to be ~~recoverable.~~paid Intherefore upon exercise thereof immediately ~~performing~~preceding ~~this~~the ~~analysis~~reverse stock split. For disclosure purposes, all option information in this footnote has been adjusted to reflect a one-to-one relationship between the ~~Company~~options ~~generally~~and ~~groups~~shares of the Company’s Common Stock.

31In May 1996, the Board of Directors adopted, and stockholders of the Company approved, the 1996 Stock Option Plan, which authorizes the grant of non-qualified stock options to employees to purchase up to 166,667 shares of the Company’s Common Stock. The options granted generally vest at a rate of 20% per year over five years and expire ten years from the date of grant. Some options vest five years from the date of grant or earlier if the fair market value of the Company’s Common Stock achieves certain levels in accordance with the plan. Option holders typically have 90 days to exercise their fully vested options subsequent to their termination of employment after which point the unexercised options are forfeited. All employees who were eligible under this plan have been terminated. None of these options were purchased during the year.

~~assets~~In byMay 1996, ~~individual~~the ~~restaurant~~Board ~~property.~~of ~~The~~Directors ~~amount~~adopted, ofand ~~impairment,~~stockholders ifof the ~~any~~Company approved, isthe ~~measured~~1996 byNon-Employee ~~comparing~~Director ~~future~~Stock ~~estimated~~Compensation ~~cash~~Plan, which ~~flows~~authorizes tothe begrant ~~generated~~of asstock aoptions ~~result~~to ofnon-employee ~~operating~~directors ~~the~~to purchase ~~particular~~up ~~restaurant~~to 8, ~~generally~~333 ~~over~~shares ~~specified~~of ~~lease~~the ~~terms~~Company’s orCommon ~~useful~~Stock. The ~~lives,~~options ~~against~~granted ~~the~~generally ~~carrying~~vest ~~value~~50% ofon the first ~~related~~anniversary ~~assets.~~date ~~The~~and ~~Company~~100% ~~recorded~~on athe ~~net~~second ~~impairment~~anniversary ~~charge~~date ofand ~~$4,605,000~~expire ~~($5,520,000~~ten years ~~less~~from ~~full~~the ~~amortization~~date of grant. Option ~~deferred~~holders ~~income~~typically ofhave ~~$915,000),~~six ~~$979,000,~~months ~~and~~to ~~$4,286,000~~exercise intheir ~~2001,~~fully ~~2000,~~vested ~~and~~options subsequent ~~1999,~~to ~~respectively~~their astermination ~~part~~date ofafter which point the ~~asset~~unexercised ~~write-down~~options become ~~for~~forfeited. There ~~restaurants~~are ~~included~~5,833 options inavailable ~~the~~for ~~restructuring~~future ~~charges.~~grant ~~See Note 4.~~under ~~"Impairment~~the ofplan ~~Assets~~as ~~and~~of ~~Restructuring~~December 27, ~~Charges~~2004."

In ~~Fair~~May 2000, ~~Value~~the Board of ~~Financial~~Directors ~~Instruments~~ adopted, and stockholders of the Company approved, the 2000 Non-Employee Director Equity Compensation Plan. The plan provides the right for each non-employee director, at his or her election, to receive either Company stock units or stock options in lieu of cash compensation. Up to 100,000 shares of the Company’s Common Stock are authorized for issuance under the plan. Following the Company’s reverse stock split, there were 66,667 shares of the Company’s Common Stock authorized under the plan. Subsequently, the Company’s Board of Directors amended the plan to make an additional 33,333 shares of the Company’s Stock available under the plan. The stock units vest over a twelve-month period from the date of grant. A total of 31,938 stock units have been granted under this plan. The stock options are granted at the fair market value on the date of grant and vest five years from the date of grant or earlier if

The carrying amounts of cash, accounts receivable and payable, and accrued liabilities approximate fair value because of the short-term nature of the items. The carrying amounts of the Company's debt and other payables approximate fair value either due to their short-term nature or the variable rates associated with these debt instruments. 24

the fair ~~Deferred~~market ~~Income~~ value of the Company’s Common Stock achieves certain levels, in accordance with the plan. The options expire ten years from the date of grant. Option holders typically retain the vested portion of their options subsequent to the end of their service period on the Board. There are 25,944 options and/or stock units available for future grant under the plan as of March 31, 2005.

~~During~~An ~~2001~~option ~~and~~to ~~2000~~purchase 29,167 ~~landlords~~shares ~~contributed~~of ~~$663,000~~the ~~and~~Company’s ~~$2,342,000,~~Common ~~respectively,~~Stock ~~towards~~was granted to an officer of the Company's ~~development~~in ofMay 2001 ~~five~~at ~~restaurants.~~a ~~The~~price ~~contributions~~of ~~are~~$15.90 per ~~principally~~share, ~~amortized~~the ~~against~~fair ~~rent~~market ~~expense~~value ~~over~~on the ~~term~~date of ~~the lease~~grant. The ~~unamortized~~options ~~balance~~vest isover ~~included~~four inyears ~~accrued~~from ~~liabilities~~the date onof ~~the~~grant ~~accompanying~~or ~~consolidated~~earlier ~~balance~~if ~~sheet.~~the ~~During~~fair ~~2001,~~market ~~deferred income~~value of ~~$915,000~~the ~~related~~Company’s tocommon ~~two~~stock achieves ~~restaurants~~certain ~~was~~levels ~~fully amortized~~ in ~~conjunction~~accordance with ~~impairment~~the ~~charges.~~terms ~~See~~of ~~Note 4~~the agreement. The ~~"Impairment~~options ofexpire ~~Assets~~ten ~~and~~years ~~Restructuring~~from ~~Charges."~~the date of grant.

The ~~Revenue~~sale ~~Recognition~~ of the Chart House Business constituted a Change in Control as defined by the stock option plans referenced above, as a result of which all outstanding options have become fully vested.

~~The Company records revenues from normal recurring sales upon the performance of services.~~ 25

The ~~Advertising~~ following table summarizes stock option activity for 2004, 2003 and 2002:

The Company records advertising expense as incurred. Advertising expense was $3,328,000, $1,619,000 and $1,091,000 in fiscal years 2001, 2000, and 1999, respectively.

	ISO Plan/ other		1989 Plan	1992 Plan		1996 Employee Plan		2000 Director	Total shares		Weighted- average exercise price per share
Outstanding at December 31, 2001 (Unaudited - see Note 1)	58,333		—	833		71,210		14,806	145,182		31.38
Granted	—		—	—		—		27,314	27,314		2.45
Exercised	—		—	—		—		—	—		—
Forfeited	(26,667	)	—	(833	)	(69,543	)		(97,043	)	36.80
Outstanding at December 30, 2002	31,666		—	—		1,667		42,120	75,453		13.89
Granted	—		—	—		—		—	—		—
Exercised	—		—	—		—		—	—		—
Forfeited	—		—	—		—			—		—
Outstanding at December 29, 2003	31,666		—	—		1,667		42,120	75,453		13.89
Granted	—		—	—		—		—	—		—
Exercised	—		—	—		—		—	—		—
Forfeited	(29,165	)	—	—		(1,667	)		(30,832	)	—
Outstanding at December 27, 2004	2,501		—	—		0		42,120	44,621		13.89

The ~~Pre-Opening~~following ~~Costs~~ table summarizes information concerning outstanding and exercisable stock options as of December 27, 2004:

Pre-opening costs include hiring and training of employees for new restaurants and are expensed as incurred.

Exercise prices		Shares covered by options		Weighted-average exercise price				Weighted- average remaining
Exercise prices		Outstanding	Exercisable	Outstanding		Exercisable		contractual life

$	2.45	27,314	27,314	$	2.45	$	2.45	8.37
15.90		9,299	9,299	15.90		15.90		7.38
34.88		5,506	5,506	34.88		34.88		6.37
39.75		834	834	39.75		39.75		3.39
51.75		1,668	1,668	51.75		51.75		4.35
Total		44,621	44,621	11.79		11.79		6.68

The ~~Income~~weighted-average ~~Taxes~~ fair value of options granted during 2002 was $1.18. There were no new options granted during 2004 or 2003. The fair value of each option is estimated on the date of grant based on the Black-Scholes option pricing model using the following assumptions:

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance has been provided to reduce deferred tax assets to the amounts expected to be realized. The Company has determined that, more likely than not, it will be unable to utilize the

		2002

Expected stock price volatility		88%
Risk-free interest rate		3.0%
Expected lives		2 years

3226

(9) STOCKHOLDERS’ benefits of its deferred tax asset that existed at the beginning of fiscal 2001 and increased its valuation allowance by $5,380,000 in the third quarter of 2001, resulting in a 100% deferred tax asset reserve. See Note 7. "Income Taxes." EQUITY

In 2001, the Company issued, pursuant to a rights offering, 3,777,778 shares of Series A Preferred Stock~~-Based~~ ~~Compensation~~ and received net proceeds of $7.1 million ($8.5 million before related costs). Net proceeds were used primarily to repay a portion of the related party notes and pay certain amounts owed to contractors and other expenses related to new restaurant openings and for certain other purposes.

~~The~~Dividends ~~Company~~are ~~has~~payable ~~elected~~at ~~to account for stock-based compensation under~~ the ~~intrinsic~~rate ~~value method~~ of ~~accounting~~$0.225 ~~This~~per ~~method~~share ~~measures~~per ~~compensation~~annum, ~~cost as the~~accrue ~~excess,~~from ~~if any, of~~ the ~~quoted~~date ~~market price~~ of ~~the~~issuance, ~~Company's~~and ~~common~~are ~~stock~~cumulative. The atCredit ~~the~~Agreement, ~~grant~~while ~~date~~outstanding, ~~over~~restricted the ~~amount~~payment ~~the~~of ~~employee~~cash dividends. The ~~must~~terms ~~pay~~of ~~for~~ the ~~stock.~~Series A ~~The~~Preferred ~~Company's~~Stock ~~policy~~provide isthat, to ~~grant~~the ~~stock~~extent ~~options~~that todividends ~~purchase~~may ~~the~~not ~~Company's~~be ~~stock~~paid atin acash, ~~price~~they ~~equal~~are to ~~fair~~be ~~market~~paid ~~value~~with atadditional ~~the~~shares ~~date~~ of ~~grant.~~Series A Preferred Stock. The Company ~~has~~satisfied the ~~disclosed~~first ~~required~~two ~~pro forma~~semi-annual ~~disclosures~~dividend ofpayment ~~compensation~~obligations ~~expense~~with ~~determined~~additional ~~under the~~shares ~~fair value method~~ of ~~accounting~~Series A ~~for~~Preferred ~~stock-based~~Stock. Subsequent ~~compensation~~to asthe ~~prescribed~~retirement ~~by Statement~~ of ~~Financial~~the ~~Accounting Standards No. 123~~Credit Agreement, ~~"Accounting~~the ~~for~~Company ~~Stock-Based~~began ~~Compensation"~~paying ~~("SFAS No. 123").~~these ~~See~~dividends ~~Note 11.~~in ~~"Stock Option Plans~~cash."

Shares ~~Net~~of ~~Loss~~the ~~Per~~Series A Preferred Stock are convertible by the holder at any time into shares of Common ~~Share~~ Stock on a six -for -one basis, as a consequence of the reverse stock split which became effective February 22, 2002. The Company may, under certain circumstances, redeem the Series A Preferred Stock at redemption prices that increase each year. The initial redemption price is 150% of the original issuance price. The terms of the Series A Preferred Stock provide that, upon liquidation, dissolution, or the occurrence of a change in control of the Company, holders of the Series A Preferred Stock will receive, before any payment is made upon the Common Stock, a payment equal to the greater of (a) $2.25, plus all accrued but unpaid dividends to date, plus, if after the payment is made, there are any remaining assets and funds, they will be distributed to holders of the Series A Preferred Stock and the Company’s other equity securities, ratably, on an as-converted basis, provided that the additional distribution to holders of the Series A Preferred Stock will not exceed $4.0 million in the aggregate, subject to reduction in certain circumstances; or (b) the amount determined by dividing (i) the total amount available for distribution, by (ii) the total number of outstanding shares of Common Stock, determined on an as-converted basis.

~~Basic earnings per share is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding for the~~(10) RELATED ~~reporting~~PARTY period. Diluted earnings per share reflects the potential dilution that could occur if all common stock equivalents were outstanding. Common stock equivalents are anti-dilutive, by definition, in periods reporting losses and, therefore, excluded from the weighted-average number of shares calculation. The number of stock options outstanding, excluded from calculations of loss per share because their impact is anti-dilutive, was approximately 154,000, 163,000, and 161,000 in 2001, 2000, and 1999, respectively. In addition, the Company issued preferred stock during 2001, shares of which are convertible into shares of common stock on a six-for-one basis. There were 3,971,000 shares of preferred stock outstanding at December 31, 2001, that have also been excluded from the calculation of loss per share because their impact is anti-dilutive. These amounts reflect the impact of the Reverse Stock Split. See Note 15. "Subsequent Events." Diluted earnings per share equals basic earnings per share for all periods presented. TRANSACTIONS

Payments ~~Segment~~to ~~Reporting~~ related parties totaled $0.3 million, $0.8 million, and $8.3 million in 2004, 2003, and 2002, respectively. Payments during 2002 include debt repayments of $6.5 million, plus interest of $1.2 million. The remainder of the payments relate to consulting fees and leasing costs.

~~Reportable~~During ~~operating~~2002, ~~segments~~the ~~are~~Company ~~components~~was ofparty anto ~~enterprise~~a ~~about~~marketing ~~which~~agreement ~~separate~~with Rewards ~~financial~~Network, Inc. ~~information~~(formerly isIdine) ~~available~~a ~~that~~related isparty ~~evaluated~~and ~~regularly~~owner byof the Rewards ~~chief~~Network, Inc. frequent diner program. In connection with the advance sale of ~~operating~~discounted ~~decision~~food ~~maker~~and beverage credits, the Company received advertising in Rewards ~~deciding~~Network, Inc. ~~how~~publications and through the relationships Rewards Network, Inc. had established with major airlines to ~~allocate~~feature ~~resources~~the Company’s restaurants as preferred dining choices. Rewards Network, Inc. provided web and inprint ~~evaluating~~promotional ~~performance~~services that were designed to create incentives for members to dine at the Company’s restaurants, especially during the Company’s restaurants’ non-peak days. The Company received from Rewards Network, Inc. $1.0 million in 2002 . The Company ~~believes~~paid ~~its~~$2.5 ~~restaurants~~million ~~meet~~during ~~the~~2002 ~~criteria~~, pursuant ~~supporting~~to ~~aggregation~~this agreement. This agreement was terminated as of ~~all~~July 29, ~~restaurants~~2002, ~~into~~in ~~one~~conjunction with the sale ~~operating~~of ~~segment~~the Chart House Business. The Company has no further obligations under this agreement.

In ~~New~~the second quarter 2003, the Company entered into a loaned employee agreement with Rewards Network, ~~Accounting~~Inc., ~~Pronouncements~~ which provided for, among other things, that the Company’s President and Chief Executive Officer provide advisory services to Rewards Network, Inc. Executive Management Team for up to sixteen hours per week, in exchange for a fixed amount to be paid to the Company. The original agreement commenced May 19, 2003 and expired June 30, 2003. The agreement was amended by the Company and Rewards Network, Inc. to, among other things, extend the termination date from June 30, 2003 to August 8, 2003. In fiscal 2003, the Company recognized $32,000 of service revenues pursuant to this agreement.

InOn ~~June~~December ~~2001~~11, 2003, the ~~Financial~~Company’s ~~Accounting~~President ~~Standards~~and ~~Board~~Chief ~~("FASB")~~Executive Officer ~~issued~~became ~~Statement~~a offull-time ~~Financial~~employee ~~Accounting~~of ~~Standards~~Rewards ~~No.~~Network, ~~141~~Inc. In ~~("SFAS~~connection ~~No. 141")~~with this change, the Company ~~"Business~~entered ~~Combinations."~~into ~~SFAS~~a ~~No.~~new agreement with Rewards Network, ~~141~~Inc. ~~requires~~whereby ~~all~~services provided ~~business~~to ~~combinations~~the ~~initiated~~Company ~~after~~by ~~June 30,~~the ~~2001,~~Company’s toPresident beand ~~accounted~~Chief ~~for~~Executive ~~using~~Officer are billed to the ~~purchase~~Company ~~method~~by ofRewards ~~accounting~~Network, Inc. ~~The~~based ~~adoption~~on ofan ~~this~~agreed upon ~~statement~~hourly ~~had~~rate. The noCompany ~~impact~~incurred $31,000 onduring ~~the~~fiscal ~~Company's~~2004 ~~financial~~and ~~statements~~no ~~for~~costs ~~the~~during ~~year~~fiscal ~~ended December 31~~2003, ~~2001.~~pursuant to this agreement.

33On June 26, 2003, the Company entered into an operating lease for office space with Equity Group Investments, L.L.C. This agreement provides, among other things, that the landlord provide office space for the Company’s corporate

In June 2001, the FASB issued Statement of Financial Accounting Standards No. 142 ("SFAS No. 142"), "Goodwill and Other Intangible Assets." SFAS No. 142 requires that, upon adoption, the Company discontinue amortization of goodwill and certain other intangible assets. In addition, the requirements include assessing goodwill and intangible assets for impairment at least once per fiscal year. Impairment losses will be reported as operating expenses. The Company will adopt the provisions of this statement for the first quarter of 2002. Future financial statements, post adoption, will reflect results of operations without goodwill and trade name amortization expense as well as possible impairment charges. Amortization expense related to goodwill and trade name was approximately $752,000, $775,000, and $649,000 for fiscal years 2001, 2000, and 1999, respectively. These costs will not be included in operations beginning in fiscal 2002. The impact on the Company's financial statements, if any, for impairment charges from the adoption of SFAS No. 142 is not readily determinable. 27

Inemployees ~~September 2001, the FASB issued Statement of Financial Accounting Standards No. 143 ("SFAS No. 143"), "Accounting for Asset Retirement Obligations." SFAS No. 143 addresses financial accounting~~ and ~~reporting~~certain ~~for~~office ~~obligations associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and (or) the normal operation of a long-lived asset~~services. This ~~statement does not apply to obligations that arise solely from a plan to dispose of a long-lived asset,~~ ~~which~~agreement is ~~governed~~terminable by ~~the~~either ~~provisions~~party ofwith ~~SFAS~~a ~~No. 144.~~thirty day notice. The Company ~~will~~made ~~adopt~~payments ~~the provisions~~ of ~~this~~$53,000 and ~~statement~~$15,000 ~~for~~in fiscal ~~the~~2004 ~~first~~and ~~quarter~~2003, ofrespectively, ~~2002.~~pursuant ~~The~~to ~~adoption of~~ this ~~statement will have no impact on the Company's financial statements~~agreement.

In September 2001, the FASB issued Statement of Financial Accounting Standards No. 144 ("SFAS No. 144"), "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supersedes SFAS No. 121. The ~~changes~~relationships ~~include,~~described ~~among~~above ~~other~~stem ~~things, removing goodwill~~ from ~~its~~one ~~scope~~or ~~thereby~~more ~~eliminating the current requirement to allocate goodwill to long-lived assets tested for impairment. The new statement also defines detailed criteria for assets being "held for sale." The~~ Company ~~will adopt the~~ ~~provisions~~stockholders ofand/or ~~this~~members ~~statement for the first quarter~~ of ~~2002. The impact on~~ the Company'’s ~~financial~~Board ~~statements,~~of ifDirectors ~~any,~~maintaining ownership ~~for~~interest ~~impairment~~in ~~charges~~and ~~from~~influential ~~the~~management ~~adoption~~positions ofat ~~SFAS~~or ~~No. 144~~within isthe related ~~not~~parties’ ~~readily determinable~~organizations.

(211) ~~ALLOWANCE FOR DOUBTFUL ACCOUNTS~~ SUBSEQUENT EVENTS

~~The~~On ~~Company's allowance for doubtful accounts receivable was $59,000 and $226,000 as of December~~February 312, ~~2001 and December 25~~2005, ~~2000,~~the ~~respectively. During~~Company ~~2001,~~filed ~~aggregate~~a ~~receivables~~certificate of dissolution ~~$218,000~~with ~~were written-off against~~ the ~~allowance.~~Secretary ~~There~~of ~~were~~State noof ~~accounts~~Delaware ~~written-off to the allowance~~ in ~~2000~~accordance orwith ~~1999. The allowance was~~the ~~increased~~stockholder byapproved ~~$51,000,~~Plan ~~$50,000, and $140,000 in 2001, 2000, and 1999, respectively. The expense is included in other operating costs in the accompanying consolidated statement~~ of ~~operations~~Dissolution.

~~(3)~~At ~~EQUIPMENT~~the ~~AND~~February 21, ~~IMPROVEMENTS~~ 2005 Board Meeting, the Board of Directors adopted a resolution reducing the number of Directors from three members to one.

~~Depreciation expense was $6,808,000, $5,990,000, and $7,081,000 in 2001, 2000, and 1999, respectively. The Company capitalizes interest costs directly related to~~(12) COMMITMENTS ~~the~~AND acquisition of equipment and improvements. Capitalized interest, net of accumulated amortization, was $257,000 and $198,000 at December 31, 2001 and December 25, 2000, respectively. Interest costs capitalized during 2001, 2000, CONTINGENCIES

34The Company periodically is a defendant in litigation incidental to its business activities. While any litigation or investigation has an element of uncertainty, the Company believes that the outcome of any of these matters will not have a material adverse effect on its financial condition or operations.

The Company maintains letters of credit primarily to cover self-insurance reserves and ~~1999~~lease ~~were~~obligations. ~~$119,000,~~In ~~$199~~connection with the termination of the Credit Agreement,~~000,~~ and ~~$0,~~in ~~respectively.~~order ~~The~~to ~~capitalized~~minimize costs ~~are~~associated with ~~amortized~~outstanding ~~over~~letters ~~the~~of ~~respective~~credit, ~~lives~~the ofCompany ~~the~~established ~~assets.~~a ~~Amortization~~cash ~~expense~~collateral account ~~related~~equal to ~~these~~the ~~capitalized~~full ~~costs~~balance ~~are~~of its obligations under outstanding letters ~~$43~~of credit,~~000,~~ which totaled $2.0, million and $02.6 ~~during~~million ~~2001,~~at ~~2000~~December 27, 2004 and ~~1999~~December 29, 2003, respectively. Such funds are disclosed on the consolidated balance sheets as restricted cash, a non-current asset.

~~In June 2000,~~The ~~the~~ Company ~~entered~~was ~~into~~contingently aliable, ~~sale-leaseback~~in ~~agreement~~certain ~~whereby~~circumstances, ~~land~~for lease ~~and~~obligations ~~buildings~~with ~~owned~~respect byto ~~the~~20 ~~Company~~properties ~~were~~subleased ~~sold~~or assigned to third parties in the event of a default by the third party. ~~for~~In ~~$15,000,000~~connection inwith the ~~proceeds~~sale ~~and~~of ~~subsequently~~the ~~leased~~Chart ~~back~~House toBusiness, the Company ~~pursuant~~received a guarantee from Landry’s Restaurant’s, Inc. (“Landry’s”) with respect to an19 ~~operating~~of ~~master~~these ~~lease~~properties. ~~The~~On July 30, ~~gain~~2004, the Company reached a settlement with Landry’s on ~~disposal~~all pending litigation matters, including a default by a subsidiary of ~~$345~~Landry’s under of one of the Chart House leases. In addition,~~000~~ ~~was~~the ~~deferred~~Company received an unconditional and isirrevocable guarantee from Landry’s for the full and timely payment and performance of all the leases included in ~~accrued~~the ~~liabilities~~sale inof the ~~accompanying consolidated~~Chart ~~balance~~House ~~sheet~~Business to Landry’s. ~~The~~With ~~gain~~respect to isthe ~~being~~property ~~amortized~~not ~~against~~covered ~~future~~by ~~rent~~the ~~expense~~Landry’s ~~over~~guarantee, the ~~term~~Company holds a standby letter of credit from the ~~lease.~~sublessee of this property equaling one year’s rent on the property.

(In connection with a 1997 sale of previously operated restaurants, the Company agreed to guarantee up to $4).0 ~~IMPAIRMENT~~million OFof ~~ASSETS~~the ~~AND~~buyer’s ~~RESTRUCTURING~~note ~~CHARGES~~ obligation to its lender through January 2004. The guarantee expired by its terms in January of 2004.

In 1999, the Company committed to an expansion plan of both the Chart House and the Angelo and Maxie's concepts. This plan included a reorganization of operations and, as a result, eleven restaurants were identified for disposal. All eleven restaurants remained open through December 27, 1999. In the fourth quarter 1999, the Company recorded $4,286,000 in asset impairment write-down, including impairment of goodwill, and $604,000 in exit costs and severance payments. The write-down of assets to fair value reflected management's estimates of proceeds upon sale less cost to sell. 28

In(13) SUMMARY ~~2000,~~OF ~~the~~UNAUDITED ~~Company~~QUARTERLY ~~recorded~~FINANCIAL a restructuring charge of $3,810,000. The charge reflected additional net asset impairment write-downs totaling $979,000, bringing the carrying value of assets held for disposal to zero. The write-down of assets to fair value reflected management's estimates of proceeds upon sale less cost to sell. Additionally, the Company recorded a restructuring charge of $2,831,000 for incremental exit costs, primarily occupancy costs. INFORMATION

The ~~restaurants~~ ~~identified~~following ~~for~~is ~~disposal~~a insummary ~~the~~of ~~1999 plan did not contribute significantly to~~ the ~~Company's~~unaudited ~~loss~~quarterly ~~from~~results of operations ~~(excluding~~for ~~overhead~~2004 ~~allocations)~~and 2003 (in ~~2001 or 2000~~thousands, ~~and~~except ~~had contributed~~per ~~$266,000~~share ~~operating income during 1999~~data). Certain ~~All~~quarterly ofbalances ~~the~~previously reported ~~eleven restaurants~~ have been ~~disposed~~reclassified ofto byconform to the ~~end~~current ofperiod ~~2001~~presentation.

In 2001, the Company recorded an impairment write-down of long-lived assets and restructuring charges of $5,699,000. A significant decline in revenues experienced by the Company following the events of September 11, 2001, suggested an event had occurred that required the Company review its long-lived assets for impairment. The Company recorded a provision for asset impairment of $5,520,000 based on this review and recognized $915,000 of previously deferred income related to the impaired assets. Also in 2001, the Company recorded exit costs of $1,094,000, primarily to terminate leases on two existing restaurants and three locations where restaurant development plans have been canceled.

	Quarterly periods ended
	March 29, 2004			June 28, 2004			September 27, 2004			December 27, 2004
Impairment and restructuring charges	—			946			2,283			—

Interest expense, net	23			22			20			7
Other income	(51		)	(51		)	(18		)	—
Income (loss) before discontinued operations	28			(917		)	(2,285		)	(7		)
Discontinued operations:
Gain (loss) from operations	(173		)	73			(534		)	(2,286		)
Gain (loss) on sale	714			(910		)	(63		)	2,204
Income (loss) from discontinued operations	541			(837		)	(597		)	(82		)
Net income (loss)	$	569		$	(1,754	)	$	(2,882	)	$	(89	)
Preferred dividends	232			232			232			232
Net income (loss) applicable to common shares	$	337		$	(1,986	)	$	(3,114	)	$	(321	)
Net income (loss) per common share - Basic and diluted:
Continuing operations	$	(0.10	)	$	(0.57	)	$	(1.26	)	$	(0.12	)
Discontinued operations	0.27			(0.42		)	(0.30		)	(0.04		)
	$	0.17		$	(0.99	)	$	(1.55	)	$	(0.16	)
Weighted-average shares outstanding	2,003			2,005			2,005			2,005

The following table illustrates the amounts paid and charged against the liability for restructuring, severance, and other exit costs in 2001:

	Quarterly periods ended
	March 31, 2003			June 30, 2003			September 29, 2003			December 29, 2003
Impairment of assets and restructuring charges	$	0		$	4,413		$	15		$	1,300
Interest expense, net	30			22			30			30
Other income	(51		)	(51		)	(51		)	(51		)

Income (loss) from continuing operations	21			(4,384		)	6			(1,279		)
Discontinued operations:
Gain (loss) from operations	36			(123		)	(207		)	577
Gain (loss) on sale	—			13			(201		)	(384		)
Income (loss) from discontinued operations	36			(110		)	(408		)	193
Net income (loss)	$	57		$	(4,494	)	$	(402	)	$	(1,086	)
Preferred dividends	232			232			232			232
Net loss applicable to common shares	$	(175	)	$	(4,726	)	$	(634	)	$	(1,318	)
Net (loss) income per common share - Basic and diluted:
Continuing operations	$	(0.11	)	$	(2.32	)	$	(0.11	)	$	(0.76	)
Discontinued operations	0.02			(0.06		)	(0.20		)	0.10
	$	(0.09	)	$	(2.37	)	$	(0.32	)	$	(0.66	)

Weighted-average shares outstanding	1,989			1,993			1,996			2,000

Liability at December 25, 2000	$	1,604,000
Amounts paid during 2001		(1,011,000	)
Additional charges during 2001		1,094,000
Liability at December 31, 2001	$	1,687,000

35Report of Independent Registered Public Accounting Firm

The ~~Company's~~ ~~remaining~~Board ~~recorded liability for the restaurant leases that have been or are expected to be disposed~~ of ~~is included in accrued liabilities in the accompanying financial~~Directors ~~statements. The Company is contingently liable for lease payments on 3 of the 11 restaurants disposed of in the 1999 plan~~ and ~~the recorded liability includes management's estimate of potential costs in the event any of the current tenants default under these leases. See Note 14. "Commitment and Contingencies."~~ Stockholders

~~(5) ACQUISITION~~ AM-CH, Inc.:

InWe ~~April 1999,~~have audited the ~~Company~~accompanying consolidated ~~purchased~~balance asheets ~~restaurant~~of ~~business located in New York~~AM-CH, ~~New~~ ~~York~~Inc. ~~d/b/a Angelo~~ and ~~Maxie's~~subsidiaries ~~Steakhouse~~ (~~"Angelo~~the ~~and Maxie's"~~Company). as ~~The acquisition was accounted for under the purchase method~~ of ~~accounting. The purchase price was $12~~December 27,~~633,000.~~ Of2004 ~~this~~and ~~amount approximately $10~~December 29,~~383,000~~ ~~was paid at closing~~2003, ~~including~~and ~~costs of acquisition, with~~ the ~~remaining~~related consolidated ~~$2,250,000~~statements ~~due in equal installments over the subsequent 36 months. The identifiable net assets acquired included tangible net assets~~ of $1operations,~~015,000,~~ ~~the~~stockholders’ ~~value of the trade name of $6~~equity,~~975,000,~~ and ~~the~~cash ~~value~~flows offor each ~~a non-compete agreement~~ of ~~$450,000.~~the ~~The~~years ~~non-compete~~in ~~agreement~~the ~~is being amortized over its~~ three-year ~~term. Expense~~period ~~related~~ended ~~to this agreement totaled $150~~December 27,~~000,~~ ~~$150,000, and $100,000 in 2001, 2000, and 1999, respectively~~2004. These ~~Goodwill~~consolidated offinancial ~~$4,193,000,~~statements ~~representing~~ are the ~~excess~~responsibility of ~~purchase price over~~ the ~~fair~~Company’s ~~value~~management. ofOur ~~identifiable~~responsibility ~~net~~is ~~assets~~to ~~acquired,~~express ~~was~~an ~~recorded~~opinion ~~as a result of the acquisition. The trade name and goodwill, through December 31, 2001, have been amortized~~ on athese ~~straight-line~~consolidated ~~basis~~financial ~~over~~statements ~~20 years.~~based ~~See~~on ~~Note 1.~~our ~~"Nature of Operations and Summary of Significant Accounting Policies—New Accounting Pronouncements~~audits."

~~The results~~We ofconducted ~~operations~~our ofaudits in ~~Angelo~~accordance ~~and~~with ~~Maxie's are included in~~ the ~~Company's~~standards ~~consolidated results~~ of ~~operations from~~ the ~~date~~Public ofCompany ~~acquisition,~~Accounting ~~April 22,~~Oversight Board ~~1999~~(United States). Those ~~The following~~standards ~~unaudited~~require ~~pro forma~~that ~~results~~we ofplan ~~operations~~and ~~present~~perform ~~combined~~the ~~year~~audit to ~~date~~obtain ~~historical~~reasonable ~~financial~~assurance ~~information~~about whether ~~as if~~ the ~~acquisition~~financial ~~occurred~~statements atare ~~the~~free ~~beginning~~ of ~~1999~~material misstatement. An ~~This~~audit ~~unaudited~~includes ~~pro forma information~~examining, ~~may~~on ~~not~~a betest ~~indicative~~basis, evidence ofsupporting the ~~results~~amounts ~~that~~and ~~actually~~disclosures ~~would~~in ~~have occurred if~~ the ~~acquisition~~financial statements. An ~~had~~audit ~~taken~~also ~~place~~includes assessing at the ~~beginning~~accounting ofprinciples ~~the~~used ~~period~~and ~~presented,~~significant orestimates ofmade ~~the~~by management, ~~future~~as ~~results~~well ofas ~~operations of~~evaluating the ~~Company.~~overall ~~All~~financial ~~information,~~statement presentation. We ~~except~~believe ~~per~~that ~~share~~our ~~amounts,~~audits provide ~~are~~a ~~presented~~reasonable inbasis ~~thousands:~~for our opinion.

	1999
	(Unaudited)
Revenues	$	143,749
Net loss available to common shares		(3,914	)
Net loss per common share—Basic and diluted	$	(2.00	)

The Company has sold and or closed all of their restaurants and had filed for dissolution on February 2, 2005.

36In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 27, 2004 and December 29, 2003, and the results of their operations and their cash flows for each of the years in the three-year period ended December 27, 2004, in conformity with U.S. generally accepted accounting principles.

(6signed) ~~ACCRUED~~KPMG ~~LIABILITIES~~ LLP

~~Accrued~~Chicago, ~~liabilities consist of the following (in thousands):~~ Illinois

	December 31, 2001		December 25, 2000
Deferred income	$	2,404	$	2,966
Unredeemed gift certificates		2,227		2,256
Payroll and related expenses		1,842		2,235
Restructuring and exit costs		1,687		1,604
Insurance		1,785		1,192
Other		2,573		2,467
	$	12,518	$	12,720

April 11, 2005

~~(7) INCOME TAXES~~ 30

~~The~~ITEM ~~provision~~9. ~~for~~CHANGES ~~income~~IN ~~taxes~~AND ~~consists~~DISAGREEMENTS ofWITH ACCOUNTANTS ~~the~~ON ~~following~~ACCOUNTING ~~components~~AND ~~(in~~FINANCIAL ~~thousands):~~ DISCLOSURE.

		Fiscal years ended
		2001			2000			1999
Current:
State		$	(28	)	$	(1,018	)	$	(395	)
Federal			(127	)		(4,598	)		(88	)
	Total current		(155	)		(5,616	)		(483	)
Deferred:
State			1,003			1,018			395
Federal			4,532			4,598			88
	Total deferred		5,535			5,616			483
Provision for income taxes		$	5,380		$	—		$	—

None.

37ITEM 9A. CONTROLS AND PROCEDURES.

~~The income~~(a) Under ~~tax~~the ~~effects~~supervision and with the participation of ~~temporary~~our management, ~~differences~~including ~~that~~our ~~give~~principal ~~rise~~executive toofficer ~~significant~~and ~~portions~~our principal financial officer, we conducted an evaluation of ~~deferred~~the ~~tax~~effectiveness ~~assets~~of the design and operation ~~liabilities~~of ~~are~~our disclosure controls and procedures, as ~~follows~~such term is defined under Rules 13a – 15(ine) and ~~thousands~~15d -15(e): promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December 27, 2004.

		December 31, 2001			December 25, 2000
Deferred tax assets:
Net operating loss carryforwards		$	15,576		$	11,526
Excess of book expense over tax expense related to fixed asset impairments			7,010			5,995
Deferred tax credits, including targeted jobs and FICA credit carryforwards			5,084			4,334
Excess of book expense over tax expense related to restructuring charges			2,549			1,701
Excess of book expense over tax expense related to capitalized leases			467			522
Other deferred costs			1,073			546
	Deferred tax assets		31,759			24,624
Deferred tax liabilities:
Excess of tax depreciation over book depreciation			(7,204	)		(8,121	)
Compensation and benefits			(225	)		(236	)
State income taxes			(78	)		(78	)
	Deferred tax liabilities		(7,507	)		(8,435	)
Net deferred tax assets			24,252			16,189
Less: Valuation allowance			(24,252	)		(10,809	)
Net deferred tax assets		$	—		$	5,380

Our controls and procedures are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this Annual Report, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 27, 2004.

~~Net~~The Company’s management, including the principal executive officer and ~~operating~~principal ~~loss~~financial ~~carryforwards~~officer, ~~were~~does ~~$40~~not expect that our disclosure controls will prevent all error and all fraud. A control system,~~457,000~~ no matter how well designed and ~~$29~~operated,~~936~~ can provide only reasonable,~~000~~ atnot ~~December 31~~absolute, ~~2001~~assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and ~~December 25~~the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, ~~2000~~no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, ~~respectively~~if any, within the Company have been detected. These ~~Operating~~inherent ~~loss~~limitations include ~~carry~~the ~~forwards~~realities ~~expire~~that ~~annually~~judgments in decision-making can be faulty, and that ~~beginning~~breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the ~~year~~likelihood ~~2018~~of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over ~~Tax~~time, ~~credits~~controls ~~expire~~may become inadequate because of changes in ~~various~~conditions ~~years~~or ~~beginning~~deterioration in the degree ~~year~~of ~~2010~~compliance with its policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

~~The Company~~(b) There has ~~determined~~been ~~that,~~no ~~more~~change ~~likely~~in ~~than~~our ~~not,~~internal itcontrol ~~will~~over financial bereporting ~~unable~~during ~~to utilize~~ the ~~benefits~~quarter ofended ~~its~~December 27, ~~deferred~~2004 ~~tax asset~~ that ~~existed~~has materially ataffected ~~the~~or ~~beginning~~is ofreasonably ~~fiscal~~likely ~~2001~~to ~~and~~materially ~~increased~~affect ~~its~~our internal ~~valuation~~control ~~allowance~~over byfinancial ~~$5,380,000 in the third quarter of 2001~~reporting.

38ITEM 9B. OTHER INFORMATION

~~The provision for income taxes reconciles to the amounts computed by applying the Federal statutory rate to income before tax as follows (in thousands):~~ None.

	Fiscal years ended
	2001			2000			1999
Statutory Federal income tax benefit	$	(6,801	)	$	(3,545	)	$	(1,204	)
State income taxes, net of Federal benefit		(874	)		(406	)		(77	)
FICA tax credit, net		(495	)		(871	)		(995	)
Keyman's insurance		2			3			—
Meals and entertainment		30			34			28
Amortization of goodwill		75			74			95
Deferred tax asset valuation allowance		13,443			4,711			2,153
Provision for income taxes	$	5,380		$	—		$	—

39PART III

~~(8)~~ITEM ~~DEBT~~ 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

In April 1999, the Company paid off the outstanding balance of an existing revolving credit agreement and entered into a Revolving Credit and Term Loan Agreement ("Credit Agreement") with the same bank, along with other lending institutions. This Credit Agreement provided for a revolving line of credit of up to $25 million, a term loan of $15 million, and a final maturity of March 31, 2004. The Credit Agreement contains a number of financial and non-financial covenants and is secured by a pledge of all of the Company's assets and capital stock of its subsidiaries. DIRECTORS

The ~~Credit~~ ~~Agreement~~directors ~~has~~of ~~been~~the ~~amended~~Company onare ~~several~~elected annually ~~occasions.~~by ~~In December 2000,~~ the ~~Credit~~stockholders ~~Agreement~~of ~~was~~the ~~amended~~Company toat ~~provide for a reduction of~~ the ~~revolving~~Company’s ~~line~~annual ofmeeting. ~~credit to~~In ~~$17.5~~February ~~million.~~of ~~Additionally~~2005, the ~~interest~~Board ~~rates~~reduced on the ~~revolving~~number ~~and~~of ~~term~~directors ~~facilities~~from ~~were~~three ~~increased~~ to ~~either the prime interest rate, plus a maximum of 2~~ one.~~25% or LIBOR, plus a maximum of 4~~ Mr.~~00%, except for $5~~ ~~million~~Ottmann ofis the ~~Term~~sole remaining ~~Loan,~~Board ~~for which interest was LIBOR plus 14%~~member. ~~The covenants were also amended.~~

During 2001, the Credit Agreement was amended several times, most recently on October 22, 2001 (the "Amendment"). The Amendment provides for, among other things, up to $2 million of additional liquidity provided by a related party, deferral of principal and interest payments, elimination of all but one financial covenant, and acceleration of the maturity date to April 30, 2002. Accordingly, the total amount due under the Credit Agreement is reflected as a current liability in the accompanying financial statements. The changes contained in the Amendment constitute a material modification of the Credit Agreement. Under generally accepted accounting principles, these changes are viewed as a new agreement which gives rise to the write-off of $942,000 of previously deferred debt financing costs and the presentation of such expense as an extraordinary item in the accompany consolidated financial statements. The interest rates on the revolving and term facilities were also changed to the prime interest rate, plus 2.75%, which was 7.5% at December 31, 2001. The balance outstanding under the Credit Agreement at December 31, 2001 includes $1.5 million funded by a related party, which accrues interest at 16.32% to give effect to the subordinate nature of the related party's participation in the Credit Agreement. At December 31, 2001, the unused portion of the commitment was approximately $3.7 million, including $500,000 from the related party.

Name		Age		Principal occupation
Stephen Ottmann (1)		50		Stephen Ottmann has been a director of the Company since 1998. Mr. Ottmann is currently a consultant in the restaurant industry. From February 1999 until September 2002, Mr. Ottmann held the position of Chief Executive Office of Lettuce Entertain You Enterprises, Inc. From January 1996 to February 1999, Mr. Ottmann served as Executive Vice President and Chief Operating Office of the same company.

~~During the~~CODE ~~period~~OF from November 2000 to January 2001, related parties made available to the Company an aggregate $11 million pursuant to unsecured notes. Amounts outstanding under the notes were subordinated to amounts owing under the Credit Agreement. The proceeds were used to fund working capital requirements as well as scheduled principal payments on the term loan. The terms of the notes were amended and restated in February 2001, increasing the availability of borrowing to $13 million. During June 2001, one note was repaid and availability under the second note agreement was reduced to $5 million in conjunction with the Company raising equity financing through the issuance of Series A preferred stock. See Note 12. "Stockholders' Equity." The note accrues interest at the applicable Eurodollar rate plus 16%, which was 18.03% at December 31, 2001, and matures on March 31, 2005. A fee of 12% per annum was charged on the unused portion of the availability of the borrowings under the note through June 2001. Interest is payable at maturity or when certain leverage ratios are attained. Management believes these ratios will not be attained for 2002. ETHICS

~~(9)~~The ~~LEASES~~ Company has adopted a code of ethics that applies to its officers, directors and employees, including the principal executive officer, the principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the Company’s code of ethics is filed as Exhibit 14.1 to this Annual Report on Form 10-K.

~~The~~AUDIT ~~Company~~COMMITTEE isFINANCIAL committed under long-term capital and operating lease agreements primarily involving land and restaurant buildings, which expire on various dates through 2020. In addition, a substantial number of leases contain renewal options ranging from five to fifty years. Certain of the EXPERT

40The Audit Committee consists of Mr. Ottmann. The Board of Directors has not determined if the Company has an “audit committee financial expert” as defined in Section 401(h) of Regulation S-K promulgated by the Securities and Exchange Commission, serving on its audit committee. As noted above, the Company has filed a certificate of dissolution with the State of Delaware on February 2, 2005 and began implementation of its Plan of Dissolution. Therefore, the Company is evaluating the need for an “audit committee financial expert” in light of the Company’s dissolution.

~~leases~~EXECUTIVE require the payment of an additional amount by which a percentage of annual sales exceeds annual minimum rentals. The total amount of such contingent rentals for fiscal years 2001, 2000, and 1999 amounted to $2,261,000, $2,100,000, and $2,029,000, respectively. Certain of the leases contain scheduled rent increases. In such cases, the Company records the minimum rent expense on a straight-line basis over the term of the lease and defers the amount payable in future years. The deferred rent is recorded in accrued liabilities in the accompanying consolidated balance sheets. OFFICERS

~~Capital~~The ~~Leases~~ following table sets forth certain information about the Executive Officers of the Company. The positions are with AM-CH, Inc.

At December 31, 2001, minimum lease payments under long-term capital leases were as follows (in thousands):

Kenneth R. Posner		57		President and Chief Executive Officer
Greg A. Grosvenor		53		Chief Financial Officer

Fiscal years ended
	2002	$	522
	2003		457
	2004		457
	2005		448
	2006		403
	Thereafter		3,577
Total minimum lease payments			5,864
Less: Amount representing interest			2,806
Total obligation under capital leases			3,058
Less: Current portion			226
Long-term obligations under capital leases, with a weighted-average interest rate of 9.5%		$	2,832

Executive Officers of the Company are appointed annually by the Board of Directors and serve at the Board’s discretion.

~~Amortization~~Kenneth R. Posner was appointed President and Chief Executive Officer of ~~leased~~the ~~property~~Company ~~under~~in ~~capital~~August 2002. Prior ~~leases~~to isthat, ~~included~~Mr. Posner inserved ~~depreciation~~as President and ~~amortization~~Chief onFinancial Officer of the ~~accompanying~~Company ~~consolidated~~from ~~statements~~April 2001 ofto ~~operations~~July 2002. From ~~Interest~~April 1999 ~~expense~~until ~~related~~July 2000, toMr. Posner ~~capital~~was ~~leases~~Executive ~~was~~Vice ~~$304,000,~~President ~~$366~~and Chief Financial Officer of Lodgian,~~000~~ Inc., an owner and ~~$500~~operator of full-service hotels,~~000~~ ~~for~~based ~~fiscal~~in ~~2001~~Atlanta, ~~2000~~Georgia. Prior to Mr. Posner’s position at Lodgian, he spent 18 years as Senior Vice President of Finance and ~~1999~~Treasurer of H Group Holdings, Inc., ~~respectively~~a diversified company with interests in the hotel, gaming and real estate industries. He has also served on the Board of Directors for most business units of H Group Holdings, Inc. and as a trustee of all of its employee benefit programs.

~~Operating Leases~~ 32

~~The~~Greg Grosvenor was appointed Chief Financial Officer of the Company isin ~~committed~~April of 2004. ~~under~~Mr. Grosvenor ~~long-term~~was ~~operating~~previously ~~leases~~Chief toFinancial ~~make~~Officer ~~minimum~~for ~~rental~~Smith Bucklin & ~~payments~~Associates, asa ~~follows~~former ~~(in~~William ~~thousands):~~Blair Capital Partners portfolio company. From 1996 until 2000 he was Chief Financial Officer for the Metropolitan Pier & Exposition Authority. His career also includes senior accounting and financial management positions with Hyatt Corporation, Galileo, and Anixter International. Mr. Grosvenor, a Certified Public Accountant began his career with the public accounting firm of PricewaterhouseCoopers, LLP.


2002	$	6,341
2003		6,147
2004		5,871
2005		5,720
2006		5,479
Thereafter		31,507
	$	61,065

SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE

41Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s officers and directors and persons who own more than ten percent of a registered class of the Company’s equity securities (“Reporting Persons”) to file reports of ownership and changes in ownership with the SEC. Reporting Persons are required by the SEC regulations to furnish the Company with all copies of all Section 16(a) reports they file.

~~Minimum rental~~Based ~~expense~~solely ~~for~~on ~~all~~its ~~operating~~review ~~leases,~~of ~~excluding~~the ~~contingent~~copies ~~rent,~~of ~~for~~such ~~the~~forms ~~fiscal~~received ~~years~~by ~~2001,~~it and ~~2000,~~written ~~and~~representations ~~1999~~from ~~was~~certain ~~$8,074,000,~~Reporting $6Persons,~~335,000,~~ ~~and~~the ~~$3,609,000~~Company ~~respectively.~~believes that during 2004 its Reporting Persons complied with all requirements applicable to them.

~~(10) EMPLOYEE BENEFIT PLANS~~ 33

~~The~~ITEM ~~Company's 401(k) Plan allows qualified employees to contribute through payroll deductions from 1% to 10% of gross pay~~11. ~~The~~EXECUTIVE ~~Company makes basic matching contributions to the plan equal to 25% of the first 5% of the employee's contribution, not to exceed $1,250 per employee per year~~COMPENSATION. In addition, the Company will make a supplemental 25% matching contribution on the first 5% of the employees' contribution, not to exceed $1,250 per employee, per year, on a quarterly basis if targeted financial results are achieved. Company matching contributions and administrative costs associated with the plan were $103,000, $125,000, and $133,000 for fiscal years 2001, 2000, and 1999, respectively.

The following table sets forth compensation for services in all capacities to the Company for the fiscal years ended December 27, 2004, December 29, 2003 and December 30, 2002, of those persons who were, during the fiscal year ended December 27, 2004: (11i) the ~~STOCK~~chief ~~OPTION~~executive ~~PLANS~~ officer, or acting in that capacity, and (ii) the other most highly compensated executive officer of the Company.

InSummary ~~May 1996,~~Compensation the Board of Directors adopted, and stockholders of the Company approved, the 1996 Stock Option Plan, which authorizes the grant of non-qualified stock options to employees to purchase up to 1,000,000 shares of the Company's common stock. The options granted generally vest at a rate of 20% per year over five years and expire ten years from the date of grant. Some options vest five years from the date of grant or earlier if the fair market value of the Company's stock achieves certain levels in accordance with the plan. There are 557,310 options available for future grant under the plan as of December 31, 2001. Table

In May 2000, the Board of Directors adopted, and stockholders of the Company approved, the 2000 Non-employee Director Equity Compensation Plan. The plan provides the right for each non-employee director, at his or her election, to receive either Company stock units or stock options in lieu of cash compensation. Up to 400,000 shares of the Company's common stock are authorized for issuance under the plan. The stock units vest over a twelve-month period from the date of grant. A total of 38,460 stock units have vested related to the plan. The stock options are granted at the fair market value on the date of grant and vest five years from the date of grant or earlier if the fair market value of the Company's common stock achieves certain levels, in accordance with the plan. The options expire ten years from the date of grant. There are 272,705 options and/or stock units available for future grant under the plan as of December 31, 2001.

				Long-term compensation awards
		Annual compensation		Securities underlying options	All other
Name and principal position	Year	Salary	Bonus	granted	compensation
		($)	($)	(#)	($)
Kenneth R. Posner (1)	2004	N/A	N/A
President and Chief Executive Officer	2003	170,812	250,000	—	—
	2002	250,000	250,000	—	—

Greg Grosvenor	2004	175,500
Chief Financial Officer

~~An option~~(1) Under toan ~~purchase~~agreement ~~175,000~~with his ~~shares~~current ofemployer, ~~the~~Rewards ~~Company's~~Network, Inc., ~~common~~Mr. Posner ~~stock~~has ~~was~~provided services ~~granted~~ to ~~an officer of~~ the Company inas ~~May 2001~~a atconsultant ain ~~price~~the capacity of $2CEO.65 He ~~per~~was ~~share,~~formerly ~~the~~employed ~~fair~~by ~~market~~the ~~value~~Company ~~on the~~as ~~date~~Chief ofExecutive ~~grant.~~Officer ~~The~~from ~~options~~August 2002 ~~vest~~until ~~over four years from~~ the ~~date~~end of ~~grant~~2003 orwhen ~~earlier~~his resignation ifwas ~~the~~accepted ~~fair~~by ~~market~~the ~~value~~Board. He ofjoined the Company's ~~common stock achieves certain levels~~ in ~~accordance~~April 2001 ~~with~~as ~~the~~President ~~terms~~and ~~of the~~Chief ~~agreement.~~Financial ~~The options expire ten years from the date of grant~~Officer.

~~After the~~Option/SAR ~~Reverse~~Grants ~~Stock~~in ~~Split,~~Last ~~all~~Fiscal outstanding options entitling the holder thereof to purchase shares of Common Stock will enable such holders to purchase, upon exercise of their options, 16.67% of the number of shares of Common Stock which such holders would have been able to purchase upon exercise of their options immediately preceding the Reverse Stock Split at the same aggregate price required to be paid therefore upon exercise thereof immediately preceding the Reverse Stock Split. Year

42There were no options/SARs granted in the fiscal year ended December 27, 2004.

~~The following table summarizes stock option activity for 2001, 2000, and 1999:~~ 34

	ISO Plan/ Other		1989 Plan		1992 Plan		1996 Plan		2000 Director	Total shares		Weighted-average exercise price per share
Outstanding, December 28, 1998	282,500		15,450		25,500		600,480		—	923,930		$	6.83
Granted	—		—		—		287,500		—	287,500		$	4.71
Exercised	—		—		—		—		—	—
Forfeited	—		(11,200	)	(16,500	)	(178,275	)	—	(205,975	)	$	7.62
Outstanding at December 27, 1999	282,500		4,250		9,000		709,705		—	1,005,455		$	6.12
Granted	—		—		—		90,000		33,020	123,020		$	5.59
Exercised	—		—		—		—		—	—
Forfeited	(7,500	)	(2,500	)	(3,000	)	(164,910	)	—	(177,910	)	$	6.00
Outstanding at December 25, 2000	275,000		1,750		6,000		634,795		33,020	950,565		$	6.07
Granted	175,000		—		—		53,610		55,815	284,425		$	2.93
Exercised	—		—		—		—		—	—
Forfeited	(100,000	)	(1,750	)	(1,000	)	(261,145	)	—	(363,895	)	$	5.62
Outstanding at December 31, 2001	350,000		—		5,000		427,260		88,835	871,095		$	5.23
Exercisable at December 27, 1999	157,500		4,250		9,000		123,425		—	294,175		$	6.79
Exercisable at December 25, 2000	195,000		1,750		6,000		237,827		—	440,577		$	6.41
Exercisable at December 31, 2001	135,000		—		5,000		215,775		—	355,775		$	6.55

COMPENSATION OF DIRECTORS

43During 2004, the Company paid an annual fee of $15,000 in cash to two of its non-employee directors. Such fees are paid in cash, or in stock units or stock options pursuant to the 2000 Non-employee Director Equity Compensation Plan.

~~The following~~COMPENSATION ~~table~~COMMITTEE ~~summarizes~~INTERLOCKS ~~information~~AND ~~concerning outstanding and exercisable stock options as of December 31, 2001:~~ INSIDER PARTICIPATION

	Shares covered by options		Weighted-average exercise price
Range of exercise prices							Weighted-average remaining contractual life
	Outstanding	Exercisable	Outstanding		Exercisable
$2.65-$2.80	233,175	—	$	2.65		—	9.37
$4.25-$5.88	288,170	93,995	$	4.96	$	4.76	7.77
$6.50-$8.63	345,750	257,780	$	7.09	$	7.11	6.12
$12.88	4,000	4,000	$	12.88	$	12.88	2.12
Total	871,095	355,775	$	5.23	$	6.55	7.52

Ms. Bynoe (who resigned from the Board of Directors, Audit and Compensation Committee in February, 2005) and Mr. Ottmann were members of the Compensation Committee during 2004. No Compensation Committee interlocking relationships existed in 2004.

The Company applies Accounting Principles Board Opinion No. 25, ("Accounting for Stock Issued to Employees"), and related interpretations in accounting for its employee stock option plans and, accordingly, does not recognize compensation expense. Had the Company elected to recognize compensation expense based on the fair value at the grant date for options granted under the plans consistent with the methodology prescribed under SFAS No. 123, the Company's net loss and per share amounts would reflect the following pro forma amounts (in thousands, except for per share data): 35

		2001			2000			1999
Net loss available to common shares:
	As reported	$	(20,427	)	$	(10,426	)	$	(3,540	)
	Pro forma	$	(20,833	)	$	(10,960	)	$	(3,924	)
Net loss per common share—Basic and diluted
	As reported	$	(10.37	)	$	(5.31	)	$	(1.81	)
	Pro forma	$	(10.58	)	$	(5.58	)	$	(2.00	)
Weighted-average fair value of options granted		$	1.56		$	2.85		$	2.59

PERFORMANCE GRAPH

The following graph compares cumulative total ~~fair~~stockholder ~~value~~return on the Company’s Common Stock with the performance of ~~each~~the NASD ~~option~~and a restaurant industry peer group index (Standard Industrial Classification Code 5812 – Retail-Eating Places) for the five fiscal years ended December 27, 2004. The NASDAQ Market Index is ~~estimated~~being onused because the ~~date~~Company’s ofCommon ~~grant~~Stock ~~based~~is currently quoted on the ~~Black-Scholes~~NASD ~~option~~OTC ~~pricing~~Bulletin ~~model~~Board. The ~~using~~graph assumes

Filing Compare · AM-CH, INC.