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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

|    |  |                                                                                     
|--- |  | ------------------------------------------------------------------------------------
|[X] |  | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended April 30, 2001

or

|      |  |                                                                                         
|----- |  | ----------------------------------------------------------------------------------------
|[   ] |  | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______________ to _______________

Commission File No. 0-12226

CALIFORNIA BEACH RESTAURANTS, INC.
(Exact name of registrant as specified in its charter)

|                                                                |  |                                  
|--------------------------------------------------------------- |  | ---------------------------------
|California                                                      |  | 95-2693503                       
|                                                               
|                                                               
|                                                               
|                                                               
|(state or other jurisdiction of
Incorporation or organization)  |  | (IRS Employer Identification No.)
|                                                               
|                                                               
|                                                               
|                                                               
|                                                               
|17383 Sunset Boulevard, Suite 140
Pacific Palisades, California |  | 90272                            
|                                                               
|                                                               
|                                                               
|                                                               
|(Address of principal executive office)                         |  | (Zip Code)                       

Registrants telephone number: (310) 459-9676

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

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
(Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X] No [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained 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. [    ]

The aggregate market value of voting and non-voting common stock held by
non-affiliates of the Registrant based upon the average bid price in the
over-the-counter market on July 11, 2001 ($0.20)
was approximately $37,219.

The number of outstanding shares of the Registrants Common Stock as of July 5,
2001 was 3,400,930.

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TABLE OF CONTENTS



|                  |                                                                                              |                                                           |  |  |  |  |  | 
|----------------- | -------------------------------------------------------------------------------------------- | --------------------------------------------------------- |  |  |  |  |  | 
|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 REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                
|                  | 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 
|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                      
|                  | Item 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                      
|PART IV          
|                  | Item 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                     
|                  |                                                                                              | Consolidated Balance Sheets                              
|                  |                                                                                              | Consolidated Statements of Operations                    
|                  |                                                                                              | Consolidated Statements of Stockholders Equity (Deficit)
|                  |                                                                                              | Consolidated Statements of Cash Flows                    
|                  |                                                                                              | Notes to Consolidated Financial Statements               
|SIGNATURES       
|INDEX TO EXHIBITS
|EXHIBIT 10.79    
|EXHIBIT 10.80    
|EXHIBIT 23.1     



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Documents incorporated by reference: the definitive Proxy Statement of the
Registrant for the 2001 annual meeting of shareholders (Part III to the extent
described herein), or if such Proxy Statement is not filed within 120 days of
the Registrants fiscal year end, such information will be included in an
amendment to this Form 10-K filed within such timeframe.







PART I







Item 1 BUSINESS

General

California Beach
Restaurants, Inc., (Registrant or Company), was
organized under the laws of the State of California in April 1971. The
Registrant is currently engaged in one line of business, the ownership and
operation of restaurants, including Gladstones 4 Fish (Gladstones) in
Pacific Palisades, California and RJs  Beverly Hills (RJs) in Beverly
Hills, California.

Restaurant Operations  Concept and Menu

The Registrant owns and operates the following restaurants through its
wholly-owned subsidiary, Sea View Restaurants, Inc. (Sea View):

Gladstones 4 Fish. Gladstones is one of Southern Californias best
known fresh seafood restaurants. In 1972, the original Gladstones was opened
as a small, 80-seat establishment in Santa Monica Canyon near the Pacific Ocean
in Santa Monica, California. In 1981, Gladstones was moved to its present
location on the beach at the intersection of Sunset Boulevard and Pacific Coast
Highway in Pacific Palisades, California. Based on restaurant industry
surveys, Gladstones is one of the top grossing restaurants in America. The
10,000 square foot interior of Gladstones seats approximately 400, while the
outside deck has a seating capacity of approximately 300 in a 6,000 square foot
area. Gladstones is open 365 days a year for lunch and dinner. Breakfast is
served on weekends. The Registrant completed construction of substantial
improvements to its Gladstones restaurant in October 1999. The improvements,
including the outside deck, have enhanced the dining accommodations.

Gladstones offers an extensive menu specializing in fresh fish and
shellfish. Gladstones strives to purchase only the finest seafood products
including, live Maine lobster, premium Alaskan red king crab, western
Australian lobster tails and Mexican shrimp as well as the freshest fish
available. Typical fresh fish on the menu include salmon, swordfish, catfish,
ahi tuna, petrale sole, pacific red snapper, halibut and mahi-mahi.
Gladstones menu also includes a large number of salads, pasta dishes and
sandwiches in addition to its extensive fresh fish and shellfish items.

Sandwich and salad prices begin at $9.99, with dinner entrees beginning at
$17.45. A typical dinner entree includes soup or salad, hot sourdough bread,
fresh vegetable and rice or potato. Gladstones average check, including
beverages and desserts, is approximately $24.21. Gladstones portion sizes are
very large and food that cannot be finished is wrapped in a gold foil animal
sculpture. The gold foil, which is manufactured specially for Gladstones,
is a signature element of the restaurant. Gladstones is also well known for
the full barrels of peanuts that are always available free of charge to guests
and free mile-high cake for all birthday and anniversary celebrations.

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RJs  Beverly Hills. RJs is located at 252 N. Beverly Drive, Beverly
Hills, California. RJs was opened in 1979 and emphasizes its extensive salad
bar, barbecued ribs and chicken, library bar and antique ceiling fans to create
an attractive, casual dining atmosphere in the heart of Beverly Hills. RJs is
open for lunch and dinner from Monday through Saturday and dinner only on
Sunday. The restaurant occupies approximately 7,500 square feet with seating
capacity of approximately 260.

RJs menu specializes in classic American food. RJs signature items
include barbecued beef and baby back pork ribs and a very extensive salad bar.
RJs menu also includes a wide selection of sandwiches and salads. Sandwich
and salad pricing begins at $8.75 with dinner entrees starting at $13.99. RJs
average check is approximately $18.56. As with Gladstones, portion sizes are
very generous and waitstaff are trained to wrap all leftovers in signature gold
foil animal sculptures.

Restaurant Operations  Gladstones Concession Agreement

Sea View operates Gladstones pursuant to a 20-year concession agreement
with the County of Los Angeles (County) that commenced November 1, 1997
(Concession Agreement) following the expiration of its prior agreement.
During February 1999, the Concession Agreement was amended. The Concession
Agreement, as amended, obligates Sea View to pay minimum annual rental payments
of $1,750,000 to the County. Percentage rents based on 10% of food sales and
12% of the combined sales of alcoholic beverages, merchandise and parking lot
revenue are payable to the extent that such percentage rents exceed the minimum
annual rents. In addition to minimum annual rent and percentage rent, Sea View
is required to pay Supplemental Rent to the County equal to the sum of
$15,000 per year plus 1% of the excess of Gladstones gross annual revenues
over $14,000,000. The Registrant records rent expense on a straight line
basis over the life of the agreement. See Part II, Item 7 Managements
Discussion and Analysis of Financial Condition and Results of Operations. The
agreement also requires Sea View to post a letter of credit equal to three
months minimum rent ($437,500) and to maintain certain net worth levels.

The terms of the Concession Agreement afford the County the opportunity to
conduct a valuation of the Gladstones Pacific Palisades operations
(Concession), at any time during the first 150 months of the Concession
Agreement (commencing November 1, 1997) in the event of a sale of Gladstones
or 100% of the stock of Sea View or the Registrant, or at any time between the
beginning of the 79th month and the end of the 150th month of the Concession
Agreement. If the County elects to conduct a valuation, Sea View must
thereafter pay the greater of (1) the Supplemental Rent Payments, or (2) an
amount determined by amortizing the greater of 5% of the gross Concession value
or 20% of the net Concession value (as determined pursuant to the Concession
Agreement), less the aggregate amount of Supplemental Rent Payments paid
through the date of the valuation, using an interest rate of 9% and equal
payments of principal and interest, over the remaining term of the Concession
Agreement.

Restaurant Operations  Marketing

Both of the Registrants restaurants focus on the casual segment of the
upper-end dinner house market. Management believes that its restaurants
reputation, developed over many years, of providing guests with unique dining
experience has been the most effective approach to attracting and retaining
business. By focusing its resources on providing superior service and value,
Gladstones and RJs have primarily relied on word of mouth to attract new
business.

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The restaurants have also developed unique promotions that are repeated on
an annual basis. For example, both Gladstones and RJs have a special
Christmas day promotion whereby each guest that dines in the restaurant on that
day receives a gift certificate for the amount of their Christmas day food
purchase. Additionally, Gladstones has developed promotions tied to specific
products such as Sockeye Salmonfest during July and Lobsterfest in October.
During these promotions, which have run for several years, Gladstones reduces
menu prices and adds numerous daily menu specials related to the featured
product. On a weekly basis, Gladstones features special lobster prices each
Thursday and special crab prices each Friday. The Registrant uses print and
radio advertising from time to time to support its promotions.

Gladstones also has developed other unique programs that are a key
element of its marketing plan. Placemats used at each table are printed daily,
allowing guests that have made a reservation to print a unique message such as
welcoming a special friend, announcing the celebration of a birthday,
anniversary or other special occasion. Guests are encouraged to take a
placemat home as a reminder of their special experience at Gladstones. An
electronic message board is located in the front of the restaurant that is also
used to welcome guests with special messages. All special occasions are also
celebrated with a free picture that is placed in a customized photo sleeve to
serve as a reminder of the special experience at Gladstones.

Restaurant Operations  Purchasing

The Registrants senior management establishes general purchasing
guidelines. The Registrant continuously seeks to obtain quality menu
ingredients and other supplies from reliable sources at competitive prices.
From time to time the Registrant will negotiate contract purchases to insure
product availability and to reduce short-term exposure to price fluctuations.
Management believes that all essential food and beverage products are available
from several qualified suppliers.

Government Regulations

The Registrant is subject to various federal, state and local laws
affecting its business. Each restaurant is subject to licensing and regulation
by a number of governmental authorities, including alcoholic beverage control,
and coastal development, health, safety and fire agencies. The Registrant has
not experienced problems in obtaining or renewing required permits or licenses.
The failure to receive or retain, or a delay in obtaining any significant
license or permit could adversely impact the Registrants operations.

Alcoholic beverage control regulations require that each restaurant apply
to a state authority for a license or permit to sell alcoholic beverages on the
premises. Licenses must be renewed annually and may be revoked or suspended,
for cause, at any time. Alcoholic beverage control regulations relate to
numerous aspects of the daily operation of each restaurant, including minimum
age of patrons and employees, hours of operation, advertising, wholesale
purchasing and storage and dispensing of alcoholic beverages. Failure by the
Registrant to retain its liquor license could adversely impact the Registrants
operations.

Various federal and state labor laws govern the Registrants relationship
with its employees, including such matters as minimum wage requirements,
overtime and other working conditions. Significant additional increases in
minimum wage, mandated paid leaves of absence or mandated universal health
benefits could adversely impact the Registrant.

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License Agreement

Gladstones/Universal
City In 1992 the Registrant entered into a
license agreement with MCA Development Venture Two (MCADVT), an affiliate of
Universal Studios, Inc., which permits MCADVT to use the Gladstones 4 Fish
name and trademarks at a restaurant in their CityWalk development located in
Universal City, California in exchange for a license fee of .8% of the
restaurants gross receipts during such use. The Gladstones 4 Fish restaurant
at CityWalk opened in May 1993. Fees received pursuant to this agreement
during fiscal 2001, 2000, and 1999 were approximately $74,000,
$66,000,and
$71,000, respectively.

Trademarks

The Registrant and/or Sea View has registered several of its marks
relating to the operation of Gladstones and R.J.s as trademarks and service
marks and regards such marks as having significant value and as being an
important factor in the marketing of its restaurants.

Competition

The Registrants restaurants compete with a wide variety of restaurants,
ranging from national and regional restaurant chains to locally owned
restaurants. Restaurants historically have represented a high-risk investment
in a very competitive industry. Many of the Registrants competitors have
significantly greater financial resources than the Registrant. The restaurant
business is often affected by changes in consumer tastes and discretionary
spending patterns, national and regional economic conditions, demographic
trends, consumer confidence in the economy, traffic patterns and the type,
number and location of competing restaurants. Any change in these factors
could adversely impact the Registrant. Management believes that the
Registrants restaurants are comparable in quality, and in many cases superior,
to competing restaurants. There is no assurance that the Registrants
restaurants will be able to compete successfully with other restaurants in
their respective areas.

Employees

The Registrant has approximately 260 employees in restaurant operations.
The Registrant believes that its working conditions and compensation packages
are competitive with those offered by its competitors and considers relations
with its employees to be good.

Seasonality

The Registrants restaurant business is seasonal due to Gladstones
location on the beach in Pacific Palisades, California. As a result, sales and
operating profits are higher during the summer months.







Item 2 PROPERTIES

Gladstones Lease. The current concession agreement for the restaurant
provides for rent based on 10% of sales of food and non-alcoholic beverages and
12% of the sales of alcoholic beverages, merchandise, and parking lot revenue,
with an annual minimum rent of $1,750,000 and annual supplemental rent of
$15,000 plus 1% of Gladstones Pacific Palisades annual gross revenue in excess
of $14,000,000, and 1% of parking lot revenue in

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excess of $680,000. Rent paid under the current restaurant lease for fiscal
2001 was approximately $1,765,000, representing approximately 14.3% of the
restaurants sales.

R.J.s Lease. In December 1994, the Registrant negotiated an amended and
restated lease for RJs. The amended lease expires in December 2004 subject to
a non-guaranteed extension period of five years. The amended lease provides
for monthly rental payments of $13,034 through December 2000. In January 2001
it was adjusted to monthly lease payments of $14,028 based on Consumer Price Index
changes. Rent paid in fiscal, 2001 was $161,376.

Executive Office. The Registrant occupies approximately 2,000 square feet
of office space in Pacific Palisades, pursuant to a lease that expires in
September 2002 and provides for current monthly rental payments of
approximately $4,069. The lease agreement includes an option to extend the
term of the lease for an additional five years.







Item 3 LEGAL PROCEEDINGS

The Registrant is involved in litigation and threatened litigation arising
in the ordinary course of business. Management of the Registrant does not
believe that resolution of any such matters will have a material adverse effect
on its business.







Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of the Registrants stockholders during
the fourth quarter of the fiscal year ended April 30, 2001.







PART II







Item 5 MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The shares of Registrants common stock are listed on the OTC Bulletin
Board under the symbol CBHR.

Market price information for the Registrants common stock listed below is
taken from the OTC Bulletin Board.

|               |  |           |      |     |  |  |     | 
|-------------- |  | --------- | ---- | --- |  |  | --- | 
|               |  | Bid Price
|               |  |          
|               |  | High      |      | Low
|               |  |           |      |    
|Fiscal 2000    |  |           |      |     |  |  |     | 
|              
|              
|              
|              
|First Quarter  |  |           | .05  |     |  |  | .05 | 
|              
|              
|              
|              
|Second Quarter |  |           | 2.00 |     |  |  | .05 | 
|              
|              
|              
|              
|Third Quarter  |  |           | 2.00 |     |  |  | .05 | 
|              
|              
|              
|              
|Fourth Quarter |  |           | 6.00 |     |  |  | .05 | 
|              
|              
|              
|              
|Fiscal 2001    |  |           |      |     |  |  |     | 
|              
|              
|              
|              
|First Quarter  |  |           | 4.00 |     |  |  | .13 | 
|              
|              
|              
|              
|Second Quarter |  |           | 3.00 |     |  |  | .28 | 
|              
|              
|              
|              
|Third Quarter  |  |           | .88  |     |  |  | .25 | 
|              
|              
|              
|              
|Fourth Quarter |  |           | .31  |     |  |  | .31 | 

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|                                |  |           |     |     |  |  |     | 
|------------------------------- |  | --------- | --- | --- |  |  | --- | 
|                                |  | Bid Price
|                                |  |          
|                                |  | High      |     | Low
|                                |  |           |     |    
|                               
|                               
|                               
|                               
|Fiscal 2002                     |  |           |     |     |  |  |     | 
|                               
|                               
|                               
|                               
|First Quarter (through 7/15/01) |  |           | .25 |     |  |  | .20 | 

At July 20, 2001, the Registrant had approximately 870 shareholders of
record.

Convertible NotesOn March 30, 1999, the Registrant completed a private
offering of $1,800,000 of subordinated, convertible notes (Subordinated
Notes) to a limited number of existing shareholders of the Registrant who are
accredited investors within the meaning of Regulation D promulgated under the
Securities Act of 1933, as amended. The proceeds of the offering were used to
retire existing indebtedness to Outside LLC (as defined herein), and to finance
the renovations at Gladstones. The Subordinated Notes are immediately
convertible into common stock of the Registrant at a rate of $1 per share, and
pay interest at 5% per annum. The Registrant may pay interest on the
Subordinated Notes in cash or in kind. All interest due as of March 30, 2001
was paid in kind by issuing a note with identical terms to the Subordinated
Notes. The Subordinated Notes mature on March 30, 2003; however, the holders of
the Subordinated Notes may elect to receive payment for fifty percent of the
outstanding Subordinated Notes on March 30, 2002 to the extent debt outstanding
to Lyon Credit Corporation (Senior Debt) has been paid in full. The payment of
the principal and interest on the Subordinated Notes is junior and subordinate
to the prior payment in full of all indebtedness of the Company to Lyon Credit
Corporation.

DividendsThe Registrant has not paid a dividend on its common stock
since fiscal 1985. The Registrant presently intends to retain any earnings to
repay indebtedness and finance its operations and does not anticipate declaring
cash dividends in the foreseeable future.







Item 6 SELECTED FINANCIAL DATA

The following table sets forth the selected financial data and operating
data for the five years ended April 30, 2001 and is derived from the audited
consolidated financial statements of the Registrant. The consolidated
financial data in the following table is qualified in its entirety by, and
should be read in conjunction with, the consolidated financial statements and
notes thereto, Managements Discussion and Analysis of Financial Condition and
Results of Operations, and other financial and statistical information
included elsewhere in this Form 10-K.

|                       |                                     |         |   |                                          |      |      |   |        |      |      |   |        |      |   |   |        |      |   |   |        |     | 
|---------------------- | ----------------------------------- | ------- | - | ---------------------------------------- | ---- | ---- | - | ------ | ---- | ---- | - | ------ | ---- | - | - | ------ | ---- | - | - | ------ | --- | 
|                       |                                     |         |   | Years ended April 30,                   
|                       |                                     |         |   |                                         
|                       |                                     |         |   | 2001                                     |      | 2000 |   | 1999   |      | 1998 |   | 1997  
|                       |                                     |         |   |                                          |      |      |   |        |      |      |   |       
|                       |                                     |         |   | (in thousands, except per share amounts)
|Income Statement Data: |                                     |         |   |                                          |      |      |   |        |      |      |   |        |      |   |   |        |      |   |   |       
|                      
|                      
|                      
|                      
|                       | Sales                               |         | $ | 14,021                                   |      |      | $ | 13,382 |      |      | $ | 13,687 |      |   | $ | 14,162 |      |   | $ | 15,164 |    
|                      
|                      
|                      
|                      
|                       | Net Income (loss)                   |         |   | (127                                     | )    |      |   | (921   | )    |      |   | (680   | )    |   |   | (1,420 | )    |   |   | 327    |    
|                      
|                      
|                      
|                      
|                       | Net Income (loss) per common share: |         |   |                                          |      |      |   |        |      |      |   |        |      |   |   |        |      |   |   |        |    
|                      
|                      
|                      
|                      
|                       |                                     | Basic   |   |                                          | (.04 | )    |   |        | (.27 | )    |   |        | (.20 | ) |   |        | (.42 | ) |   |        | .10 | 
|                      
|                      
|                      
|                      
|                       |                                     | Diluted |   |                                          | (.04 | )    |   |        | (.27 | )    |   |        | (.20 | ) |   |        | (.42 | ) |   |        | .10 | 
|                      
|                      
|                      
|                      
|Balance Sheet Data:    |                                     |         |   |                                          |      |      |   |        |      |      |   |        |      |   |   |        |      |   |   |       

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|                                       |  |   |       |                                          |  |      |       |      |  |      |       |      |  |   |       |  |  |   |       |  |  | 
|-------------------------------------- |  | - | ----- | ---------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | - | ----- |  |  | - | ----- |  |  | 
|                                       |  |   |       | Years ended April 30,                   
|                                       |  |   |       |                                         
|                                       |  |   |       | 2001                                     |  | 2000 |       | 1999 |  | 1998 |       | 1997
|                                       |  |   |       |                                          |  |      |       |      |  |      |       |     
|                                       |  |   |       | (in thousands, except per share amounts)
|                                      
|                                      
|                                      
|                                      
|Total assets                           |  | $ | 3,722 |                                          |  | $    | 3,820 |      |  | $    | 4,576 |      |  | $ | 3,321 |  |  | $ | 5,078 | 
|                                      
|                                      
|                                      
|                                      
|Long-term debt, net of current portion |  | $ | 2,475 |                                          |  | $    | 2,600 |      |  | $    | 2,499 |      |  |   |      |  |  |   |      | 







Item 7 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

The Registrant currently has operations in one business segment, the
ownership and operation of restaurants. The Registrants restaurant operations
are conducted through its wholly owned subsidiary, Sea View. Sea Views fiscal
year is the 52 or 53 week period ending on the Thursday closest to April 30.
The fiscal year 2001 contained 53 weeks, and fiscal 2000 and 1999 each
contained 52 weeks.

The Registrant completed the construction of substantial improvements to
its Gladstones restaurant in October 1999. The improvements have enhanced the
dining accommodations available to Gladstones patrons. Construction of the
improvements to Gladstones was performed while the restaurant remained open to
the public; however, substantial, although temporary, declines in seating
capacity attributable to such construction adversely affected sales during the
first and second quarters of 2000.

Restaurant Operations

Restaurant operations include the results of Gladstones 4 Fish in
Pacific Palisades, California, and RJs  Beverly Hills in Beverly Hills,
California.

Total sales for the fiscal year ended April 30, 2001 were $14,021,000, an
increase of $639,000 or 4.8% as compared to the year ended April 30, 2000.
The Registrants Gladstones 4 Fish restaurant is located on the beach in
Pacific Palisades, California and is dependent, to a certain extent, on
favorable weather and tourism. Gladstones has a large outside deck
overlooking the Pacific ocean, which is a very popular destination, but is only
open as weather permits. Gladstones 4 Fish fiscal 2001 revenues were adversely
affected by the inclement weather conditions in fourth quarter of fiscal 2001.
The 1999 remodel caused a temporary reduction in seating capacity and a
commensurate reduction in revenue in the first two quarters of fiscal 2000. The
summer months typically result in higher sales due to Gladstones location on
the beach.

Total sales for the fiscal year ended April 30, 2000 were $13,382,000, a
decrease of $305,000 or 2.2% as compared to the year ended April 30, 1999.
Gladstones 4 Fish revenues were adversely affected during the first quarter of
fiscal 1999 by inclement weather and road closures resulting from the El Nino
storms. Additionally, during the fourth Quarter of fiscal 1999, the Registrant
commenced construction of improvements to Gladstones causing a temporary
reduction in seating capacity and a commensurate decrease in revenue. The above
construction was also the main cause of the reduction in fiscal 2000
revenue for the first two quarters which are typically the highest
volume of business.

In May 1993, MCA Development, Inc.(MCAD) opened a Gladstones 4 Fish at
its Citywalk project in Universal City, California pursuant to a license
agreement between the Registrant and a subsidiary of MCAD. License fees for
the fiscal years ended April 30, 2001, 2000 and 1999 were $74,000, $66,000 and
$71,000, respectively.

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Cost of Goods Sold

Cost of goods sold includes all food, beverages, liquor, direct labor and
other operating expenses, including rent, of the Registrants restaurant
operations. Cost of goods sold, as a percentage of sales, for the fiscal year
ended April 30, 2001 was 89.2% compared to 88.9% for fiscal 2000 and 87.1% for
fiscal 1999.

The cost of goods sold was $12,504,000 in fiscal 2001 as compared to
$11,896,000 in fiscal 2000, an increase of $608,000 or 5.1%. The increase in
cost of goods sold in fiscal 2001, as compared to fiscal 2000, as a percentage
of sales, is the result of increased operating costs incurred during fiscal
2001, primarily related to increased labor costs resulting from the minimum
wage increase effective January 1, 2001. Additional increases included
management labor, workers compensation, payroll taxes, management bonus, and
group medical insurance. Other costs effected were repair and maintenance, and
utilities. Gladstones rent expense for the fiscal year ended April 30, 2001
was $1,744,000 as compared to $1,728,000 for the fiscal year ended April 30,
2000.

Cost of goods sold was $11,896,000 in fiscal 2000 as compared to
$11,928,000 in fiscal 1999, a decrease of $32,000 or 0.3%. Cost of goods sold,
as a percentage of sales, for the fiscal year ended April 30, 2000 was 88.9%
compared to 87.1% for fiscal 1999. The Registrants concerted effort to reduce
costs resulted in the decline in the amount of cost of goods sold, as a
percentage of sales, in fiscal 2000, as compared to fiscal 1999.

Selling, General and Administrative Expenses

Selling, general and administrative expense for the year ended April 30,
2001, was $895,000 compared to $950,000 for the year ended April 30, 2000. As a
percentage of sales selling, general and administrative expense was 6.4% for
fiscal 2001, compared to 7.1% for fiscal 2000.

Selling, general and administrative expense for the year ended April 30,
2001 decreased $55,000 or 5.8% as compared with the year ended April 30, 2000.
The decrease is due to the Registrants continuing efforts to reduce such
expenses, as well as combining Chief Financial Officer and Chief Executive
Officer positions in April of 2000.

Selling, general and administrative expense for the year ended April 30,
2000, was $950,000 compared to $956,000 for the year ended April 30, 1999. As a
percentage of sales selling, general and administrative expense was 7.1% for
fiscal 2000,compared to 7.0% for fiscal 1999.

Legal and Litigation Settlement

Legal and litigation settlement expenses for the year ended April 30, 2001
increased by $68,000 or 90.1% as compared with the year ended April 30, 2000.
The increase was associated with a general increase in outstanding legal
matters.

Legal and litigation settlement expenses for the year ended April 30, 2000
decreased by $29,000, or 27.9% as compared with the year ended April 30, 1999.
The decrease is

9



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##### Table of Contents



attributable to the Registrants utilization of in-house counsel for
representation in certain matters and management of external counsel in other
matters.

Interest Expense

For the year ended April 30, 2001, the Registrant recorded interest
expense of $173,000, net of interest income of $18,000. Interest expense was
related primarily to the note payable with Lyon Credit, for the Gladstones
remodel, and interest expense on the Subordinated convertible notes.

For the year ended April 30, 2000, the Registrant recorded interest
expense of $282,000, net of interest income of $7,000, primarily related to the
note payable with Lyon Credit, for the Gladstones remodel, and interest expense
on the Subordinated convertible notes.

For the year ended April 30, 1999, the Registrant recorded interest
expense of $303,000, net of interest income of $5,000, primarily related to the
cost of maintaining the letter of credit required by the Concession Agreement
and to the cost of the registrants revolving line of credit.

Depreciation/Amortization Expense

For the years ended April 30, 2001, 2000 and 1999 depreciation expense was
$426,000, $384,000 and $362,000, respectively. During the year ended April 30,
2000, the Registrant placed $1,507,000 of assets that were classified as
construction in progress at April 30, 1999 into service, and also purchased an
additional $1,332,000 of fixed assets, resulting in an increase in depreciation
expense over prior years. This also resulted in increased depreciation during
2001. The assets placed in service pertain to the renovation of the Gladstones
location completed in July of 1999. Amortization expense relates completely to
the Registrants Goodwill and other intangible assets and approximated $714,000
per year for fiscal 2000 and fiscal 1999. In April of fiscal 2000 goodwill was
fully amortized.

Income Tax Provision

For the year ended
April 30, 2001, 2000 and 1999 the Registrant recorded
income tax expense of $3,000, $2,000 and $2,000, respectively.

Liquidity and Capital Resources

On March 30, 1999, the Registrant completed a private offering of
$1,800,000 of subordinated, convertible notes (Subordinated Notes) to a
limited number of existing shareholders of the Registrant who are accredited
investors within the meaning of Regulation D promulgated under the Securities
Act of 1933, as amended. The proceeds of the offering were used to retire
existing indebtedness to Outside LLC, an entity affiliated with one of the
Companys directors and principal shareholders, and to finance the renovations
at Gladstones. The Subordinated Notes are immediately convertible into common
stock of the Registrant at a rate of $1 per share, and pay interest at 5% per
annum. The Registrant may pay interest on the Subordinated Notes in cash or in
kind. The Subordinated Notes mature on March 30, 2003; provided, however, that
the holders of the Subordinated Notes may elect to receive payment for fifty
percent of the outstanding Subordinated Notes on March 30, 2002 to the extent
debt outstanding to Lyon Credit Corporation has been paid in full. The

10



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##### Table of Contents



payment of the principal and interest on the Subordinated Notes is junior and
subordinate to the prior payment in full of all indebtedness of the Company to
Lyon Credit Corporation.

The Registrant has entered into an agreement for tenant improvement and
equipment financing with Lyon Credit Corporation (TI Facility) of $1,089,000
to be repaid over a 5 year period with interest at the rate of 9.94%. At
April 30, 2001, the balance due under the TI Facility was $792,000.

On June 16, 2000, the Company entered into a one year, $500,000 revolving
line of credit agreement with U.S. Bank (formerly Santa Monica Bank). The
agreement provides for interest at prime plus 1% on all amounts borrowed,
requires a commitment fee of 1/2 %, and is secured by certain assets of the
Company, including its license agreement with MCA for use of the name
Gladstones. It is also guaranteed by Sea View. The agreement requires the
Company to comply with certain cash flow and liquidity covenants, and includes
a 60 consecutive days out of debt requirement. The Company utilized $437,500 of
the capacity of the revolving line of credit as collateral support for a letter
of credit issued by U.S. Bank pursuant to the Concession Agreement. The letter
of credit was to expire on July 6, 2001, and subsequently has been renewed
until September 15, 2002.

On March 26, 2001, the Company and U.S. Bank amended the terms of the
revolving line of credit agreement to provide for an increase of $200,000 from $500,000 to
$700,000. The additional $200,000 of available borrowing capacity will be
available to the Company during the period November 1, 2000 through May 31,
2001 only, after which the line of credit will revert to its original $500,000
borrowing limit. At April 30, 2001, $62,500 of borrowings were outstanding
under the line of credit. The line of credit expires on September 15, 2002.

On October 23, 2000, the Registrant extended the terms of the agreement
with Gladstones parking lot operator called Standard Parking for fixed term of
two years, from January 1, 2001 through and including December 21, 2002. In
addition, commencing in 2000 and during each year of the extended term of the
agreement, upon request of the Registrant, the parking lot operator shall loan
(Annual Loan) to the Registrant an amount not to exceed $150,000 per year, to
be paid back from parking lot income. The Annual Loan to Registrant shall not
be advanced prior to November 1 nor later than December 31 of any calendar
year. The Annual Loan to the Registrant, plus interest at the prime rate of
interest as published in The Wall Street Journal as of the date the Annual Loan
is made, shall be repaid to Standard Parking by July 31, of the calendar year
immediately following the calendar year in which the loan is made. As of April
30, 2001 Registrant owed $120,000 to Standard Parking pursuant to the Annual Loan.

On March 22, 2000, Sea View entered into a four-month, $250,000 line of
credit agreement with Space Partners, an entity affiliated with one of the
Registrants principal stockholders and with a member of its board of
directors. This agreement provided for interest of 10% on all amounts borrowed,
required a commitment fee of $2,500 and was guaranteed by the Registrant.
Interest expense associated with the agreement totaled $1,666 for fiscal year
2000. At April 30, 2000 the outstanding balance was $100,000
which was paid down in fiscal 2001. There were no
borrowings in fiscal 2001 from Space Partners.

Capital expenditures for the years ended April 30, 2001, 2000, and 1999
totaled approximately $192,000, $1,332,000, and $1,498,000 respectively. The
registrant has no significant commitments for capital expenditures in fiscal
2002.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

11



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##### Table of Contents



Except for the historical information contained herein, certain statements
in this Form 10-K, including statements in this Item and in Business are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievement of the Registrant, or industry results, to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: the Registrants ability to secure adequate debt
or equity financing in order to comply with the terms of the Concession
Agreement; the Registrants ability to generate an operating profit based on
the terms of the Concession Agreement; that its principal source of cash is
funds generated from operations and outside financings; that restaurants
historically have represented a high risk investment in a very competitive
industry; general and local economic conditions, which can, among other things,
impact tourism, consumer spending and restaurant revenues; weather and natural
disasters, such as earthquakes and fires, which can impact sales at the
Registrants restaurants; quality of management; changes in, or the failure to
comply with, governmental regulations; unexpected increases in the cost of key
food products, labor and other operating expenses in connection with the
Registrants business; and other factors referenced in this Form 10-K and the
Registrants other filings with the SEC.







Item 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable







Item 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CALIFORNIA BEACH RESTAURANTS, INC.

INDEX TO FINANCIAL STATEMENTS

|                                                                                                                         |  |      |    | 
|------------------------------------------------------------------------------------------------------------------------ |  | ---- | -- | 
|                                                                                                                         |  | Page
|                                                                                                                         |  |     
|Report of Independent Auditors                                                                                           |  |      | 15 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Consolidated Balance Sheets  April 30, 2001 and 2000                                                                    |  |      | 16 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Consolidated Statements of Operations for each of the three
years in the period ended April 30, 2001                     |  |      | 17 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Consolidated Statements of Stockholders Equity (Deficit) for
each of the three years in the period ended April 30, 2001 |  |      | 18 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Consolidated Statements of Cash Flows for each of the
three years in the period ended April 30, 2001                     |  |      | 19 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Notes to Consolidated Financial Statements                                                                               |  |      | 20 | 

All schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable and, therefore, have been omitted.

12



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##### Table of Contents









Item 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None







PART III







Item 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information concerning directors and executive officers is incorporated
herein by reference from the sections entitled Election of Directors and
Section 16(a) Beneficial Ownership Reporting Compliance in the Registrants
2001 Proxy Statement, or if such Proxy Statement is not filed within 120 days
of the Registrants fiscal year end, such information will be included in an
amendment to this Form 10-K filed within such timeframe.







Item 11 EXECUTIVE COMPENSATION

Information concerning executive compensation is incorporated herein by
reference from the section entitled Executive Compensation in the
Registrants 2001 Proxy Statement, or if such Proxy Statement is not filed
within 120 days of the Registrants fiscal year end, such information will be
included in an amendment to this Form 10-K filed within such timeframe.







Item 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information concerning security ownership of certain beneficial owners and
management is incorporated herein by reference from the section entitled
Security Ownership of Certain Beneficial Owners and Management in the
Registrants 2001 Proxy Statement, or if such Proxy Statement is not filed
within 120 days of the Registrants fiscal year end, such information will be
included in an amendment to this Form 10-K filed within such timeframe.







Item 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information concerning certain relationships and related transactions is
incorporated herein by reference from the section entitled Certain
Relationships and Related Transactions in the Registrants 2001 Proxy
Statement, or if such Proxy Statement is not filed within 120 days of the
Registrants fiscal year end, such information will be included in an
amendment to this Form 10-K filed within such timeframe.







PART IV

13



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##### Table of Contents









Item 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K



|(a) |  | (1) Financial Statements
|--- |  | ------------------------

|                                                                                                                         |  |          |    | 
|------------------------------------------------------------------------------------------------------------------------ |  | -------- | -- | 
|                                                                                                                         |  | Page No.
|                                                                                                                         |  |         
|Report of Independent Auditors                                                                                           |  |          | 15 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Consolidated Balance Sheets  April 30, 2001 and 2000                                                                    |  |          | 16 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Consolidated Statements of Operations for each of the three years
in the period ended April 30, 2001                     |  |          | 17 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Consolidated Statements of Stockholders Equity (Deficit) for
each of the three years in the period ended April 30, 2001 |  |          | 18 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Consolidated Statements of Cash Flows for each of the three years
in the period ended April 30, 2001                     |  |          | 19 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Notes to Consolidated Financial Statements                                                                               |  |          | 20 | 



|(2) |  | Financial Statement Schedules
|--- |  | -----------------------------



| |                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | All schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and,
therefore, have been omitted.



|(3) |  | Exhibits
|--- |  | --------



| |                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------
| | The exhibits listed on the accompanying Index to Exhibits are filed
as part of this Annual Report on Form 10-K.



|(b) |  | Reports on Form 8-K
|--- |  | -------------------



| |     
| | ----
| | None



|(c) |  | Exhibits
|--- |  | --------



| |                                                                                                               
| | --------------------------------------------------------------------------------------------------------------
| | All exhibits required by Item 601 are listed on the accompanying Index to
Exhibits described in (a) (3) above.



|(d) |  | Financial Statement Schedules
|--- |  | -----------------------------



| |                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | All of the financial statement schedules which are required by the
regulations of the Securities and Exchange Commission are either
inapplicable or are included as part of Item 8 herein.

14



---



##### Table of Contents



Report of Independent Auditors

Board of Directors and Shareholders
California Beach Restaurants, Inc.

We have audited the accompanying consolidated balance sheets of California
Beach Restaurants, Inc. and subsidiaries as of April 30, 2001 and 2000, and the
related consolidated statements of operations, stockholders equity (deficit),
and cash flows for each of the three years in the period ended April 30, 2001.
These financial statements are the responsibility of the Companys management.
Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
California Beach Restaurants, Inc. and subsidiaries at April 30, 2001 and 2000,
and the consolidated results of their operations and their cash flows for each
of the three years in the period ended April 30, 2001, in conformity with
accounting principles generally accepted in the United States.

| |  |                      
| |  | ---------------------
| |  | /S/ ERNST & YOUNG LLP

Los Angeles, California
June 20, 2001

15



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##### Table of Contents



California Beach Restaurants, Inc. and Subsidiaries







Consolidated Balance Sheets

|                                                               |                                                                                                                                |   |           |             |      |   |           |             |  
|-------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------ | - | --------- | ----------- | ---- | - | --------- | ----------- | -
|                                                               |                                                                                                                                |   | April 30 
|                                                               |                                                                                                                                |   |          
|                                                               |                                                                                                                                |   | 2001      |             | 2000
|                                                               |                                                                                                                                |   |           |             |     
|Assets                                                         |                                                                                                                                |   |           |             |      |   |           |            
|                                                              
|                                                              
|                                                              
|                                                              
|Current assets:                                                |                                                                                                                                |   |           |             |      |   |           |            
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Cash                                                                                                                           |   | $         | 221,000     |      |   | $         | 102,000     |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Trade and other receivables                                                                                                    |   |           | 42,000      |      |   |           | 77,000      |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Inventories                                                                                                                    |   |           | 231,000     |      |   |           | 219,000     |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Prepaid expenses                                                                                                               |   |           | 265,000     |      |   |           | 220,000     |  
|                                                               |                                                                                                                                |   |           |             |      |   |           |            
|Total current assets                                           |                                                                                                                                |   | 759,000   |             |      |   | 618,000   |            
|                                                              
|                                                              
|                                                              
|                                                              
|Fixed assets, net of accumulated depreciation
and amortization |                                                                                                                                |   | 2,797,000 |             |      |   | 3,031,000 |            
|                                                              
|                                                              
|                                                              
|                                                              
|                                                              
|                                                              
|                                                              
|                                                              
|Other assets                                                   |                                                                                                                                |   | 166,000   |             |      |   | 171,000   |            
|                                                               |                                                                                                                                |   |           |             |      |   |           |            
|Total assets                                                   |                                                                                                                                | $ | 3,722,000 |             |      | $ | 3,820,000 |            
|                                                               |                                                                                                                                |   |           |             |      |   |           |            
|Liabilities and stockholders equity (deficit)                 |                                                                                                                                |   |           |             |      |   |           |            
|                                                              
|                                                              
|                                                              
|                                                              
|Current liabilities:                                           |                                                                                                                                |   |           |             |      |   |           |            
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Accounts payable                                                                                                               |   | $         | 666,000     |      |   | $         | 658,000     |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Accrued liabilities                                                                                                            |   |           | 885,000     |      |   |           | 626,000     |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Current portion of note payable                                                                                                |   |           | 207,000     |      |   |           | 188,000     |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Notes payable  related party                                                                                                  |   |           |            |      |   |           | 100,000     |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Revolving line of credit  bank                                                                                                |   |           | 63,000      |      |   |           | --          |  
|                                                               |                                                                                                                                |   |           |             |      |   |           |            
|Total current liabilities                                      |                                                                                                                                |   | 1,821,000 |             |      |   | 1,572,000 |            
|                                                              
|                                                              
|                                                              
|                                                              
|Note payable, less current portion                             |                                                                                                                                |   | 585,000   |             |      |   | 800,000   |            
|                                                              
|                                                              
|                                                              
|                                                              
|Subordinated convertible notes                                 |                                                                                                                                |   | 1,890,000 |             |      |   | 1,800,000 |            
|                                                              
|                                                              
|                                                              
|                                                              
|Deferred rent                                                  |                                                                                                                                |   | 361,000   |             |      |   | 383,000   |            
|                                                              
|                                                              
|                                                              
|                                                              
|Other liabilities                                              |                                                                                                                                |   | 9,000     |             |      |   | 82,000    |            
|                                                              
|                                                              
|                                                              
|                                                              
|Stockholders equity (deficit):                                |                                                                                                                                |   |           |             |      |   |           |            
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Preferred stock, no par value, authorized
1,818,755 shares, none issued and outstanding at
April 30, 2001 and 2000             |   |           |            |      |   |           | --          |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Common stock, $.01 par value, authorized
25,000,000 shares, issued and outstanding
3,401,000 shares at April 30, 2001 and 2000 |   |           | 34,000      |      |   |           | 34,000      |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Additional paid-in capital                                                                                                     |   |           | 13,175,000  |      |   |           | 13,175,000  |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Accumulated deficit                                                                                                            |   |           | (14,153,000 | )    |   |           | (14,026,000 | )
|                                                               |                                                                                                                                |   |           |             |      |   |           |            
|Total stockholders equity (deficit)                           |                                                                                                                                |   | (944,000  | )           |      |   | (817,000  | )          
|                                                               |                                                                                                                                |   |           |             |      |   |           |            
|Total liabilities and stockholders equity (deficit)           |                                                                                                                                | $ | 3,722,000 |             |      | $ | 3,820,000 |            
|                                                               |                                                                                                                                |   |           |             |      |   |           |            

See accompanying notes.

16



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##### Table of Contents



California Beach Restaurants, Inc. and Subsidiaries







Consolidated Statements of Operations

|                                     |                                     |   |                     |            |      |   |            |            |   |   |            |            |  
|------------------------------------ | ----------------------------------- | - | ------------------- | ---------- | ---- | - | ---------- | ---------- | - | - | ---------- | ---------- | -
|                                     |                                     |   | Year ended April 30
|                                     |                                     |   |                    
|                                     |                                     |   | 2001                |            | 2000 |   | 1999      
|                                     |                                     |   |                     |            |      |   |           
|Sales                                |                                     | $ | 14,021,000          |            |      | $ | 13,382,000 |            |   | $ | 13,687,000 |           
|                                    
|                                    
|                                    
|                                    
|Costs and expenses:                  |                                     |   |                     |            |      |   |            |            |   |   |            |           
|                                    
|                                    
|                                    
|                                    
|                                     | Cost of goods sold                  |   |                     | 12,504,000 |      |   |            | 11,896,000 |   |   |            | 11,928,000 |  
|                                    
|                                    
|                                    
|                                    
|                                     | Selling, general and administrative |   |                     | 895,000    |      |   |            | 950,000    |   |   |            | 956,000    |  
|                                    
|                                    
|                                    
|                                    
|                                     | Legal and litigation settlements    |   |                     | 143,000    |      |   |            | 75,000     |   |   |            | 104,000    |  
|                                    
|                                    
|                                    
|                                    
|                                     | Depreciation and amortization       |   |                     | 426,000    |      |   |            | 384,000    |   |   |            | 362,000    |  
|                                     |                                     |   |                     |            |      |   |            |            |   |   |            |           
|                                     |                                     |   | 53,000              |            |      |   | 77,000     |            |   |   | 337,000    |           
|                                    
|                                    
|                                    
|                                    
|Other income (expenses):             |                                     |   |                     |            |      |   |            |            |   |   |            |           
|                                    
|                                    
|                                    
|                                    
|                                     | Interest expense, net               |   |                     | (173,000   | )    |   |            | (282,000   | ) |   |            | (303,000   | )
|                                    
|                                    
|                                    
|                                    
|                                     | Amortization of intangible assets   |   |                     | (4,000     | )    |   |            | (714,000   | ) |   |            | (712,000   | )
|                                     |                                     |   |                     |            |      |   |            |            |   |   |            |           
|Loss before income taxes             |                                     |   | (124,000            | )          |      |   | (919,000   | )          |   |   | (678,000   | )         
|                                    
|                                    
|                                    
|                                    
|Income tax provision                 |                                     |   | 3,000               |            |      |   | 2,000      |            |   |   | 2,000      |           
|                                     |                                     |   |                     |            |      |   |            |            |   |   |            |           
|Net Loss                             |                                     | $ | (127,000            | )          |      | $ | (921,000   | )          |   | $ | (680,000   | )         
|                                     |                                     |   |                     |            |      |   |            |            |   |   |            |           
|Net Loss per common share:           |                                     |   |                     |            |      |   |            |            |   |   |            |           
|                                    
|                                    
|                                    
|                                    
|                                     | Basic                               |   | $                   | (.04       | )    |   | $          | (.27       | ) |   | $          | (.20       | )
|                                     |                                     |   |                     |            |      |   |            |            |   |   |            |           
|                                     | Diluted                             |   | $                   | (.04       | )    |   | $          | (.27       | ) |   | $          | (.20       | )
|                                     |                                     |   |                     |            |      |   |            |            |   |   |            |           
|Weighted average shares outstanding: |                                     |   |                     |            |      |   |            |            |   |   |            |           
|                                    
|                                    
|                                    
|                                    
|                                     | Basic                               |   |                     | 3,401,000  |      |   |            | 3,401,000  |   |   |            | 3,401,000  |  
|                                    
|                                    
|                                    
|                                    
|                                     | Diluted                             |   |                     | 3,401,000  |      |   |            | 3,401,000  |   |   |            | 3,401,000  |  

See accompanying notes.

17



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California Beach Restaurants, Inc. and Subsidiaries







Consolidated Statements of Stockholders Equity (Deficit)

|                          |          |  |              |   |            |   |             |   |         |   |            |   |  |   |             |          |   |   |          |          |  
|------------------------- | -------- |  | ------------ | - | ---------- | - | ----------- | - | ------- | - | ---------- | - |  | - | ----------- | -------- | - | - | -------- | -------- | -
|                          |          |  | Common Stock |   | Additional |   |             |   |         |   |            |   | 
|                          |          |  |              |   | Paid-in    |   | Accumulated |   |         |   |           
|                          |          |  | Shares       |   | Amount     |   | Capital     |   | Deficit |   | Total     
|                          |          |  |              |   |            |   |             |   |         |   |           
|Balance at April 30, 1998 |          |  | 3,401,000    |   |            |   | 34,000      |   |         |   | 13,175,000 |   |  |   | (12,425,000 | )        |   |   | 784,000  |         
|                         
|                         
|                         
|                         
|                          | Net loss |  |              |  |            |   |             |  |         |   |            |  |  |   |             | (680,000 | ) |   |          | (680,000 | )
|                          |          |  |              |   |            |   |             |   |         |   |            |   |  |   |             |          |   |   |          |         
|Balance at April 30, 1999 |          |  | 3,401,000    |   |            |   | 34,000      |   |         |   | 13,175,000 |   |  |   | (13,105,000 | )        |   |   | 104,000  |         
|                         
|                         
|                         
|                         
|                          | Net loss |  |              |  |            |   |             |  |         |   |            |  |  |   |             | (921,000 | ) |   |          | (921,000 | )
|                          |          |  |              |   |            |   |             |   |         |   |            |   |  |   |             |          |   |   |          |         
|Balance at April 30, 2000 |          |  | 3,401,000    |   |            |   | 34,000      |   |         |   | 13,175,000 |   |  |   | (14,026,000 | )        |   |   | (817,000 | )       
|                         
|                         
|                         
|                         
|                          | Net loss |  |              |  |            |   |             |  |         |   |            |  |  |   |             | (127,000 | ) |   |          | (127,000 | )
|                          |          |  |              |   |            |   |             |   |         |   |            |   |  |   |             |          |   |   |          |         
|Balance at April 30, 2001 |          |  | 3,401,000    |   |            | $ | 34,000      |   |         | $ | 13,175,000 |   |  | $ | (14,153,000 | )        |   | $ | (944,000 | )       
|                          |          |  |              |   |            |   |             |   |         |   |            |   |  |   |             |          |   |   |          |         

See accompanying notes.

18



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##### Table of Contents



California Beach Restaurants, Inc. and Subsidiaries







Consolidated Statements of Cash Flows

|                                                                  |                                |                                              |                             |   |                     |         |            |   |           |          |            |   |           |          |  
|----------------------------------------------------------------- | ------------------------------ | -------------------------------------------- | --------------------------- | - | ------------------- | ------- | ---------- | - | --------- | -------- | ---------- | - | --------- | -------- | -
|                                                                  |                                |                                              |                             |   | Year ended April 30
|                                                                  |                                |                                              |                             |   |                    
|                                                                  |                                |                                              |                             |   | 2001                |         | 2000       |   | 1999     
|                                                                  |                                |                                              |                             |   |                     |         |            |   |          
|Operating activities                                              |                                |                                              |                             |   |                     |         |            |   |           |          |            |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Net loss                                                          |                                | $                                            | (127,000                    | ) |                     | $       | (921,000   | ) |           | $        | (680,000   | )
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Adjustments to reconcile net loss to
cash provided by operations: |                                |                                              |                             |   |                     |         |            |   |           |          |            |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                | Depreciation and amortization                |                             |   | 430,000             |         |            |   | 1,098,000 |          |            |   | 1,074,000 |         
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                | Changes in operating assets
and liabilities: |                             |   |                     |         |            |   |           |          |            |   |           |         
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                |                                              | Trade and other receivables |   |                     | 35,000  |            |   |           | (27,000  | )          |   |           | (11,000  | )
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                |                                              | Inventories                 |   |                     | (12,000 | )          |   |           | (8,000   | )          |   |           | (49,000  | )
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                |                                              | Prepaid expenses            |   |                     | (45,000 | )          |   |           | 90,000   |            |   |           | 11,000   |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                |                                              | Accounts payable            |   |                     | 8,000   |            |   |           | 371,000  |            |   |           | (281,000 | )
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                |                                              | Accrued liabilities         |   |                     | 259,000 |            |   |           | (395,000 | )          |   |           | 126,000  |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                |                                              | Deferred rent               |   |                     | (22,000 | )          |   |           | (22,000  | )          |   |           | 198,000  |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                |                                              | Other liabilities           |   |                     | (73,000 | )          |   |           | (55,000  | )          |   |           | (30,000  | )
|                                                                  |                                |                                              |                             |   |                     |         |            |   |           |          |            |  
|Net cash provided by operations                                   |                                |                                              | 453,000                     |   |                     |         | 131,000    |   |           |          | 358,000    |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Investing activities                                              |                                |                                              |                             |   |                     |         |            |   |           |          |            |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Additions to fixed assets                                         |                                |                                              | (192,000                    | ) |                     |         | (1,332,000 | ) |           |          | (1,498,000 | )
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|(Increase) decrease in other assets                               |                                |                                              |                            |   |                     |         | 19,000     |   |           |          | (16,000    | )
|                                                                  |                                |                                              |                             |   |                     |         |            |   |           |          |            |  
|Net cash used in investing activities                             |                                |                                              | (192,000                    | ) |                     |         | (1,313,000 | ) |           |          | (1,514,000 | )
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Financing activities                                              |                                |                                              |                             |   |                     |         |            |   |           |          |            |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Borrowings from subordinated notes
and note payable               |                                |                                              | 353,000                     |   |                     |         | 166,000    |   |           |          | 2,622,000  |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Principal payments on borrowings                                  |                                |                                              | (395,000                    | ) |                     |         |           |   |           |          |           |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Borrowings from related party                                     |                                |                                              |                            |   |                     |         | 200,000    |   |           |          | 300,000    |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Payment to related party                                          |                                |                                              | (100,000                    | ) |                     |         | (100,000   | ) |           |          | (1,000,000 | )
|                                                                  |                                |                                              |                             |   |                     |         |            |   |           |          |            |  
|Net cash (used in) provided by
financing activities               |                                |                                              | (142,000                    | ) |                     |         | 266,000    |   |           |          | 1,922,000  |  
|                                                                  |                                |                                              |                             |   |                     |         |            |   |           |          |            |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Net (decrease) increase in cash                                   |                                |                                              | 119,000                     |   |                     |         | (916,000   | ) |           |          | 766,000    |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Cash at beginning of year                                         |                                |                                              | 102,000                     |   |                     |         | 1,018,000  |   |           |          | 252,000    |  
|                                                                  |                                |                                              |                             |   |                     |         |            |   |           |          |            |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Cash at end of year                                               |                                | $                                            | 221,000                     |   |                     | $       | 102,000    |   |           | $        | 1,018,000  |  
|                                                                  |                                |                                              |                             |   |                     |         |            |   |           |          |            |  
|Supplemental disclosures of cash
flow information                 |                                |                                              |                             |   |                     |         |            |   |           |          |            |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Cash paid during the year for: |                                              |                             |   |                     |         |            |   |           |          |            |   |          
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                | Interest                                     |                             | $ | 98,000              |         |            | $ | 284,000   |          |            | $ | 292,000   |         
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                | Income taxes                                 |                             | $ | 3,000               |         |            |   |          |          |            | $ | 2,000     |         

See accompanying notes.

19



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California Beach Restaurants, Inc. and Subsidiaries




Notes to Consolidated Financial Statements

April 30, 2001

1. Summary of Significant Accounting Policies

Business

The Company has operations in one business segment, the ownership and
management of two restaurants, Gladstones 4 Fish and RJs  Beverly Hills.

Fiscal Year

The Companys restaurant operations are conducted through its wholly owned
subsidiary, Sea View Restaurants, Inc. (Sea View). Sea Views fiscal year is
the 52 or 53 week period ending on the Thursday closest to April 30. The fiscal
years ended on May 3, April 27, and April 29 for fiscal years 2001, 2000 and
1999, respectively. The fiscal year 2001 contained 53 weeks, and fiscal 2000
and 1999 each contained 52 weeks.

Consolidation

The consolidated financial statements of California Beach Restaurants, Inc. and
subsidiaries include the accounts of the parent company and its wholly owned
subsidiaries. All material intercompany accounts and transactions have been
eliminated in consolidation.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined
principally by the first-in, first-out method. Inventories consist primarily of
food, beverages and other restaurant supplies.

Long-Lived Assets

The Company reviews long-lived assets and certain identifiable intangibles
whenever events or changes in circumstances indicate the carrying amount of an
asset may not be recoverable. Impairment losses are recognized when the
carrying amount of the asset exceeds the estimated fair value of the asset. At
April 30, 2001 and 2000, the Company believes there has been no impairment of
the value of such assets.

Financial Instruments

The carrying value of financial instruments such as cash, receivables, accounts
payable and accrued liabilities approximates their fair values based on the
short-term maturities of these instruments. The Company limits its exposure to
credit loss by placing its cash with high credit quality financial
institutions. The carrying value of debt instruments approximates its fair
value based on references to similar instruments.

20



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##### Table of Contents



California Beach Restaurants, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

April 30, 2001

1. Summary of Significant Accounting Policies (continued)

Fixed Assets

Fixed assets are stated at cost. Depreciation on furniture and equipment is
computed by the straight-line method using lives ranging from 3 to 8 years.
Leasehold improvements are amortized over the remaining terms of the leases
(including options expected to be exercised) or the estimated lives of the
improvements, principally 18 years, whichever is less.

Goodwill

Goodwill is stated at cost and was being amortized using the straight-line
method over 10 years. In fiscal 2000, goodwill was fully amortized.

Income Taxes

The Company uses the liability method of accounting for income taxes. Under
this method, deferred income taxes are provided for the difference between the
financial reporting and tax bases of assets and liabilities and are measured
using enacted tax rates and laws expected to be in effect when temporary
differences are expected to reverse.

Restaurant and License Revenues

Revenues from the operation of the Company-owned restaurants are recognized
when sales occur. License fees are based on the licensee restaurants gross
receipts and are recorded by the Company in the period related restaurants
revenues are earned. Fees received pursuant to this agreement during years
ended April 30, 2001, 2000, and 1999 were $74,000, $66,000 and $71,000,
respectively.

Advertising Costs

The Company expenses advertising costs as such costs are incurred. The Company
expensed $55,000, $110,000 and $68,000 for the years ended April 30, 2001, 2000
and 1999, respectively, in connection with advertising.

Stock-Based Compensation

The Company accounts for stock-based awards to employees using the intrinsic
value method as prescribed by Accounting Principles Board Opinion no.
25, Accounting for Stock Issued to Employees.

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California Beach Restaurants, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

April 30, 2001

1. Summary of Significant Accounting Policies (continued)

Basic and Diluted Loss per Common Share

The Company presents basic loss per common share
and diluted loss per common share in accordance with Financial
Accounting Standard Board No. 128, Earnings Per Share. Basic loss per common share includes only
the weighted average shares outstanding and excludes the dilutive effect of
options, warrants and convertible securities. For the years ended April 30,
2001, 2000, and 1999 basic and diluted loss per common share are the same due
to the antidilutive effect of potential common stock equivalents.

Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions affecting the amounts reported in the consolidated
financial statements and accompanying notes. Actual results could differ from
those estimates.

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California Beach Restaurants, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

April 30, 2001

2. Fixed Assets

Details of fixed assets are as follows:

|                                               |  |          |            |      |  |   |            |  
|---------------------------------------------- |  | -------- | ---------- | ---- |  | - | ---------- | -
|                                               |  | April 30
|                                               |  |         
|                                               |  | 2001     |            | 2000
|                                               |  |          |            |     
|Leasehold improvements                         |  |          | 4,664,000  |      |  |   | 4,580,000  |  
|                                              
|                                              
|                                              
|                                              
|Furniture and equipment                        |  |          | 2,140,000  |      |  |   | 2,027,000  |  
|                                               |  |          |            |      |  |   |            |  
|                                               |  |          | 6,804,000  |      |  |   | 6,607,000  |  
|                                              
|                                              
|                                              
|                                              
|Less accumulated depreciation and
amortization |  |          | (4,007,000 | )    |  |   | (3,576,000 | )
|                                               |  |          |            |      |  |   |            |  
|                                               |  | $        | 2,797,000  |      |  | $ | 3,031,000  |  
|                                               |  |          |            |      |  |   |            |  

3. Note Payable  Related Party

On March 22, 2000, Sea View entered into a four-month, $250,000 line of credit
agreement with Space Partners, an entity affiliated with one of the Companys
principal stockholders and a member of its board of directors. This agreement
provides for interest of 10% on all amounts borrowed, requires a commitment fee
of $2,500 and is guaranteed by the Company .The entire borrowed amount was paid
back in fiscal 2001 and there were no additional borrowings in fiscal
2001.

4. Debt

On October 23, 2000, the Registrant extended the terms of the agreement with
Gladstones parking lot operator called Standard Parking for fixed term of two
years, from January 1, 2001 through and including December 21, 2002. In
addition, commencing in 2000 and during each year of the extended term of the
agreement, upon request of the Registrant, the parking lot operator shall loan
(Annual Loan) to the Registrant an amount not to exceed $150,000 per year, to
be paid back from parking lot income. The Annual Loan to Registrant shall not
be advanced prior to November 1 nor later than December 31 of any calendar
year. The Annual Loan to the Registrant, plus interest at the prime rate of
interest as published in The Wall Street Journal as of the date the Annual Loan
is made, shall be repaid to Standard Parking by July 31, of the calendar year
immediately following the calendar year in which the loan is made. As of April
30, 2001 Registrant owed $120,000 to Standard Parking pursuant to the Annual Loan. This
balance is recorded in accrued liabilities in the accompanying
financial statements.

On March 30, 1999, the Company completed a $1,800,000 private offering of
subordinated convertible notes due March 25, 2003 (Subordinated Notes). The
Subordinated Notes were sold to certain existing stockholders. The Subordinated
Notes bear interest at 5% per annum and are immediately convertible into common
stock of the Company at a rate of $1 per share. Interest is payable in cash or
in kind. The Subordinated Notes mature on March 30, 2003; provided,

23



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California Beach Restaurants, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

April 30, 2001

4. Debt (continued)

however, that the holders of the Subordinated Notes may elect to receive
payment for fifty percent of the outstanding Subordinated Notes on March 30,
2002 to the extent debt outstanding to Lyon Credit Corporation has been paid in
full. The payment of the principal and interest on the Subordinated Note is
junior and subordinate to the prior payment in full of all indebtedness of the
Company to Lyon Credit Corporation. The table below reflects the
payment of the Subordinated Notes in 2003, after repayment of Lyon
Credit Corporation. The Subordinated
Notes agreements limit indebtedness for borrowed money of the Company in excess
of $4,000,000 until the Subordinated Notes are fully paid or converted.

In 1999, the Company entered into an agreement for tenant improvements and
equipment financing with Lyon Credit Corporation for up to $1,089,000 in
credit. The financing is to be repaid over a five year period with interest at
the rate of yield to maturity of the five year treasury note plus 4% (effective
rate of 9.94% at April 30, 2001). The financing is secured by certain tenant
improvements and equipment. A total of $792,000 was outstanding under this
financing as of April 30, 2001.

On June 16,2000 the Company entered into a one year, $500,000 revolving line
of credit agreement with U. S. Bank. The agreement provides for interest at
prime plus 1% on all amounts borrowed, requires a commitment fee of 1/2%, and
is secured by certain assets of the Company, including its license agreement
with MCA for use of the name Gladstones. The agreement is also guaranteed by
Sea View. The agreement requires the Company to comply with certain cash flow
and liquidity covenants, and includes a 60 consecutive days out of debt
requirement and all covenants have been met. The Company utilized $437,500 of
the capacity of the revolving line of credit as collateral support for a letter
of credit issued by U.S. Bank pursuant to the Concession Agreement. At April
30, 2001, a total of $62,500 was outstanding in addition to the letter of
credit. The letter of credit expires September 15, 2002.

On March 26, 2001, the Company and U.S. Bank amended the terms of the revolving
line of credit agreement to provide for a $200,000 increase in the maximum
amount of the line of the credit from $500,000 to $700,000. The additional
$200,000 of available borrowing capacity will be available to the Company
during the period November 1, 2000 through May 31, 2001 only, after which the
line of credit will revert to its original $500,000 borrowing limit. At April
30, 2001, $62,500 of borrowings were outstanding under the line of credit. The
line of credit expires on September 15, 2002.

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##### Table of Contents



California Beach Restaurants, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

April 30, 2001

Maturities under existing financing agreements are as follows:

|     |  |        |           | 
|---- |  | ------ | --------- | 
|Year |  | Amount
|     |  |       
|2002 |  | $      | 270,000   | 
|    
|    
|    
|    
|2003 |  |        | 2,118,000 | 
|    
|    
|    
|    
|2004 |  |        | 252,000   | 
|    
|    
|    
|    
|2005 |  |        | 105,000   | 
|     |  |        |           | 
|     |  | $      | 2,745,000 | 
|     |  |        |           | 

25



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California Beach Restaurants, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

April 30, 2001

5. Income Taxes

The provision for income taxes consists of the following:

|          |         |   |                     |       |      |   |       |       |  |   |       |       | 
|--------- | ------- | - | ------------------- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|          |         |   | Year ended April 30
|          |         |   |                    
|          |         |   | 2001                |       | 2000 |   | 1999 
|          |         |   |                     |       |      |   |      
|Current:  |         |   |                     |       |      |   |       |       |  |   |       |      
|         
|         
|         
|         
|          | Federal |   | $                   |      |      |   | $     |      |  |   | $     | --    | 
|         
|         
|         
|         
|          | State   |   |                     | 3,000 |      |   |       | 2,000 |  |   |       | 2,000 | 
|          |         |   |                     |       |      |   |       |       |  |   |       |      
|          |         | $ | 3,000               |       |      | $ | 2,000 |       |  | $ | 2,000 |      
|          |         |   |                     |       |      |   |       |       |  |   |       |      
|Deferred: |         |   |                     |       |      |   |       |       |  |   |       |      
|         
|         
|         
|         
|          | Federal |   | $                   |      |      |   | $     |      |  |   | $     |      | 
|         
|         
|         
|         
|          | State   |   |                     |      |      |   |       |      |  |   |       |      | 
|          |         |   |                     |       |      |   |       |       |  |   |       |      
|          |         | $ |                    |       |      | $ |      |       |  | $ |      |      
|          |         |   |                     |       |      |   |       |       |  |   |       |      

As of April 30, 2000, the Company has available for federal income tax purposes
net operating loss carryovers available to offset certain future taxable income
of approximately $4,605,000 and state net operating loss carryovers of
approximately $1,599,000 which expire at various dates from 2001 through 2020.

As a result of changes in control in prior years, net operating losses of
approximately $3,740,000 that expire through 2010 are subject to certain
restrictions, which limit their future use to approximately $277,000 per year.
As a result of this limitation, approximately $693,000 of these net operating
loss carryforwards may expire without any utilization.

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##### Table of Contents



California Beach Restaurants, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

April 30, 2001

5. Income Taxes (continued)

The effective income tax rate on income (loss) varied from the statutory
federal income tax rate as follows:

|                          |                                                                   |  |       |      |      |  |       |      |  |  |       |      | 
|------------------------- | ----------------------------------------------------------------- |  | ----- | ---- | ---- |  | ----- | ---- |  |  | ----- | ---- | 
|                          |                                                                   |  | 2001  |      | 2000 |  | 1999 
|                          |                                                                   |  |       |      |      |  |      
|Statutory federal rate    |                                                                   |  | (34.0 | )%   |      |  | (34.0 | )%   |  |  | (34.0 | )%  
|                         
|                         
|                         
|                         
|Increase (decrease):      |                                                                   |  |       |      |      |  |       |      |  |  |       |     
|                         
|                         
|                         
|                         
|                          | State income taxes, net of federal
tax benefit                    |  |       | .2   |      |  |       | .2   |  |  |       | .2   | 
|                         
|                         
|                         
|                         
|                          | Operating losses which resulted in no
current federal tax benefit |  |       | 33.8 |      |  |       | 33.8 |  |  |       | 33.8 | 
|                          |                                                                   |  |       |      |      |  |       |      |  |  |       |     
|Effective income tax rate |                                                                   |  |      | %    |      |  |      | %    |  |  | .1    | %   
|                          |                                                                   |  |       |      |      |  |       |      |  |  |       |     

As of April 30, 2001 and 2000, the tax effect of the net operating loss
carryforwards and net deferred tax assets, for which a 100% valuation allowance
has been provided and which have not been recognized in the financial
statements, is as follows:

|                                 |  |      |            |      |  |   |            |  
|-------------------------------- |  | ---- | ---------- | ---- |  | - | ---------- | -
|                                 |  | 2001 |            | 2000
|                                 |  |      |            |     
|Depreciation and amortization    |  | $    | 720,000    |      |  | $ | 711,000    |  
|                                
|                                
|                                
|                                
|Nondeductible accruals           |  |      | 81,000     |      |  |   | 70,000     |  
|                                
|                                
|                                
|                                
|Net operating loss carryforwards |  |      | 1,602,000  |      |  |   | 1,579,000  |  
|                                 |  |      |            |      |  |   |            |  
|Total deferred assets            |  |      | 2,403,000  |      |  |   | 2,360,000  |  
|                                
|                                
|                                
|                                
|Less valuation allowance         |  |      | (2,403,000 | )    |  |   | (2,360,000 | )
|                                 |  |      |            |      |  |   |            |  
|Net deferred assets              |  | $    |           |      |  | $ |           |  
|                                 |  |      |            |      |  |   |            |  

27



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California Beach Restaurants, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

April 30, 2001

6. Stockholders Equity

Stock Options

The Omnibus Stock Plan, which received stockholder approval in April 1995,
provides for the issuance of a maximum of 1,000,000 shares of common stock. The
plan provides for the issuance of stock options, stock appreciation rights,
restricted stock and other awards to participants as selected by the Stock Plan
Committee of the board of directors, which administers the plan. Options
granted pursuant to this plan have expiration dates, which do not exceed 10
years from the date of grant.

The fair value for these options was estimated at the date of grant using
a Black-Scholes option pricing model with the following weighted average
assumptions: weighted-average risk-free interest rate of 6% for 2001, 2000 and
1999, dividend yields of 0% for 2001, 2000 and 1999, weighted-average
volatility factors of the expected market price of the Companys common stock
of 6.8; and a weighted-average expected life of the option of ten years. The
amortization of the fair value of options granted was immaterial for 2001, 2000
and 1999.

The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options that have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Companys employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimates, in
managements opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

28



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California Beach Restaurants, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

April 30, 2001

6. Stockholders Equity (continued)

Stock Options (continued)

The following schedule summarizes the changes in stock options for the three
years ended April 30, 2001 under the plans:

|                              |           |  |           |          |          |   |                  |     |  |   |     |     | 
|----------------------------- | --------- |  | --------- | -------- | -------- | - | ---------------- | --- |  | - | --- | --- | 
|                              |           |  | Number of |          | Exercise |   | Weighted Average
|                              |           |  | Options   |          | Price    |   | Exercise Price  
|                              |           |  |           |          |          |   |                 
|Outstanding at April 30, 1998 |           |  | 572,000   |          |          | $ | .83              |     |  | $ | .83 |    
|                             
|                             
|                             
|                             
|                              | Granted   |  |           |         |          |   |                  |    |  |   |     |    | 
|                             
|                             
|                             
|                             
|                              | Canceled  |  |           | (135,000 | )        |   |                  | .83 |  |   |     | .83 | 
|                             
|                             
|                             
|                             
|                              | Exercised |  |           |         |          |   |                  |    |  |   |     |    | 
|                              |           |  |           |          |          |   |                  |     |  |   |     |    
|Outstanding at April 30, 1999 |           |  | 437,000   |          |          |   | .83              |     |  |   | .83 |    
|                             
|                             
|                             
|                             
|                              | Granted   |  |           |         |          |   |                  |    |  |   |     |    | 
|                             
|                             
|                             
|                             
|                              | Canceled  |  |           | (50,000  | )        |   |                  | .83 |  |   |     | .83 | 
|                             
|                             
|                             
|                             
|                              | Exercised |  |           |         |          |   |                  |    |  |   |     |    | 
|                              |           |  |           |          |          |   |                  |     |  |   |     |    
|Outstanding at April 30, 2000 |           |  | 387,000   |          |          |   | .83              |     |  |   | .83 |    
|                             
|                             
|                             
|                             
|                              | Granted   |  |           | 195,000  |          |   |                  | .90 |  |   |     | .90 | 
|                             
|                             
|                             
|                             
|                              | Canceled  |  |           | (10,000  | )        |   |                  | .83 |  |   |     | .83 | 
|                             
|                             
|                             
|                             
|                              | Exercised |  |           |         |          |   |                  |    |  |   |     | --  | 
|                              |           |  |           |          |          |   |                  |     |  |   |     |    
|Outstanding at April 30, 2001 |           |  | 572,000   |          |          |   |                 |     |  |   | .87 |    
|                              |           |  |           |          |          |   |                  |     |  |   |     |    
|Exercisable at April 30, 2001 |           |  | 418,000   |          |          |   |                  |     |  |   |     |    
|                              |           |  |           |          |          |   |                  |     |  |   |     |    

The weighted average remaining contractual life of these options is six years.
The fair value of the options granted in fiscal year 2001 was determined to be
$ 0.10.

Pursuant to an existing Registration Rights Agreement, if the Company registers
any class of equity security under the Securities Act of 1933, certain
investors with a certain minimum number of shares of the Companys common
stock, individually or in aggregate, can request that their shares be included
in such registration.

29



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California Beach Restaurants, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

April 30, 2001

7. Loss per Common Share

A reconciliation of the numerator and denominator of basic earnings per share
and diluted earnings per share is as follows:

|                                                  |                                      |                                            |   |                     |           |      |   |           |           |  |   |           |           | 
|------------------------------------------------- | ------------------------------------ | ------------------------------------------ | - | ------------------- | --------- | ---- | - | --------- | --------- |  | - | --------- | --------- | 
|                                                  |                                      |                                            |   | Year ended April 30
|                                                  |                                      |                                            |   |                    
|                                                  |                                      |                                            |   | 2001                |           | 2000 |   | 1999     
|                                                  |                                      |                                            |   |                     |           |      |   |          
|Basic and Diluted net loss per
share computation: |                                      |                                            |   |                     |           |      |   |           |           |  |   |          
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Numerator                            |                                            | $ | (127,000            | )         |      | $ | (921,000  | )         |  | $ | (680,000  | )        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Denominator:                         |                                            |   |                     |           |      |   |           |           |  |   |           |          
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                      | Weighted average
common shares
outstanding |   |                     | 3,401,000 |      |   |           | 3,401,000 |  |   |           | 3,401,000 | 
|                                                  |                                      |                                            |   |                     |           |      |   |           |           |  |   |          
|                                                  | Total shares                         |                                            |   | 3,401,000           |           |      |   | 3,401,000 |           |  |   | 3,401,000 |          
|                                                  |                                      |                                            |   |                     |           |      |   |           |           |  |   |          
|                                                  | Basic and Diluted net loss
per share |                                            | $ | (.04                | )         |      | $ | (.27      | )         |  | $ | (.20      | )        
|                                                  |                                      |                                            |   |                     |           |      |   |           |           |  |   |          

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California Beach Restaurants, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

April 30, 2001

8. Commitments and Contingencies

Leases

The Company leases restaurant and office facilities under various
noncancelable operating leases with remaining terms ranging from one to twenty
years. The terms of certain of the leases require additional rental payments
based on a percentage of the restaurants sales in excess of a minimum amount.
Total amounts charged to rent expense under the Companys operating leases for
the three years ended April 30, 2001 are summarized below:

|                            |                       |   |           |           |      |   |           |           |  |   |           |           | 
|--------------------------- | --------------------- | - | --------- | --------- | ---- | - | --------- | --------- |  | - | --------- | --------- | 
|                            |                       |   | 2001      |           | 2000 |   | 1999     
|                            |                       |   |           |           |      |   |          
|Restaurants:                |                       |   |           |           |      |   |           |           |  |   |           |          
|                           
|                           
|                           
|                           
|                            | Fixed minimum rentals |   | $         | 1,875,000 |      |   | $         | 1,849,000 |  |   | $         | 1,851,000 | 
|                           
|                           
|                           
|                           
|                            | Percentage rentals    |   |           |          |      |   |           |          |  |   |           | --        | 
|                           
|                           
|                           
|                           
|Other fixed minimum rentals |                       |   | 54,000    |           |      |   | 63,000    |           |  |   | 61,000    |          
|                            |                       |   |           |           |      |   |           |           |  |   |           |          
|                           
|                           
|                           
|                           
|Total                       |                       | $ | 1,929,000 |           |      | $ | 1,912,000 |           |  | $ | 1,912,000 |          
|                            |                       |   |           |           |      |   |           |           |  |   |           |          

On November 1, 1997, Sea View and the County of Los Angeles (County) executed a
new 20-year concession agreement. The previous agreement expired on October 31,
1997. The agreement, as amended February 9, 1999, includes minimum annual rent
payments of $1,750,000, an increase of approximately $600,000 over rents paid
in fiscal 1997. Percentage rents based on 10% of food sales and 12% of the
sales of alcoholic beverages, merchandise and parking lot revenues will be
payable to the extent that percentage rents exceed the minimum annual rent. In
addition, the agreement requires an annual supplemental rent payment of $15,000
plus 1% of Gladstones annual gross revenue in excess of $14,000,000. The
agreement further required the expenditure of at least $2,700,000 for
renovations to the restaurant facility by August 9, 1999. During the first two
years of the agreement, minimum annual rent is reduced by $218,750 per year.
Minimum annual rent will be adjusted every three years to 75% of average total
rent paid per year for the prior three years, but in no event less than the
current minimum rent. Minimum and percentage rent will be adjusted to fair
market rental value after 10 years to the extent fair market rental value
exceeds minimum and percentage rents.

The terms of the Concession Agreement afford the County the opportunity to
conduct a valuation of the Gladstones Pacific Palisades operations
(Concession), at any time during the first 150 months of the Concession
Agreement (commencing November 1, 1997) in the event of a sale of Gladstones
or 100% of the stock of Sea View or the Registrant, or at any time between the
beginning of the 79th month and the end of the 150th month of the Concession
Agreement. If the County elects to conduct a valuation, Sea View must
thereafter pay the greater of (1) the Supplemental Rent Payments, or (2) an
amount determined by amortizing the greater of 5% of the gross Concession value
or 20% of the net Concession value (as determined pursuant to the Concession
Agreement), less the aggregate amount of Supplemental Rent Payments paid
through the date of the valuation, using an interest rate of 9% and equal
payments of principal and interest, over the remaining term of the Concession
Agreement.

31



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##### Table of Contents



California Beach Restaurants, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

April 30, 2001

8. Commitments and Contingencies (continued)

Leases (continued)

The amended agreement also requires Sea View to post a letter of credit equal
to three months minimum rent ($437,500) and maintenance of certain net worth
levels, as defined. Initially, the Company posted the letter of credit by
utilizing cash collateral provided by Overhead Partners, L.P. (Overhead), an
entity affiliated with one of the Companys principal stockholders and with a
member of its board of directors. Since 1999, the Company has been using U.S.
Bank to provide for letter of credit agreement and used them for business
banking needs starting fiscal 2001.

The agreement also provides, in certain circumstances, approval rights to the
County in the event transactions constituting a Change in Ownership or
Financing Event, as such terms are defined in the agreement, occur. These
provisions may adversely affect the Companys ability to engage in such
transactions.

The parking lot for the Companys Gladstones 4 Fish restaurant is operated by
a parking operator pursuant to a management agreement. The Company receives all
revenues and pays all operating expenses under this arrangement. During fiscal
2001, 2000 and 1999, the Company received $161,000, $147,000 and $185,000,
respectively, pursuant to this arrangement, net of all expenses (except rent).
These amounts have been recorded as a reduction to cost of goods sold.

32



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##### Table of Contents



California Beach Restaurants, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

April 30, 2001

8. Commitments and Contingencies (continued)

Leases (continued)

Aggregate minimum annual rental commitments at April 30, 2001 were as follows:

|                           |            |   |            |            | 
|-------------------------- | ---------- | - | ---------- | ---------- | 
|Year Ending April 30,
2002 |            | $ | 1,978,000  |           
|                          
|                          
|                          
|                          
|                           | 2003       |   |            | 1,952,000  | 
|                          
|                          
|                          
|                          
|                           | 2004       |   |            | 1,933,000  | 
|                          
|                          
|                          
|                          
|                           | 2005       |   |            | 1,906,000  | 
|                          
|                          
|                          
|                          
|                           | 2006       |   |            | 1,765,000  | 
|                          
|                          
|                          
|                          
|                           | Thereafter |   |            | 20,298,000 | 
|                           |            |   |            |           
|                           |            | $ | 29,832,000 |           
|                           |            |   |            |           

Employment Agreements

Effective November 4, 1997, the Company entered into an employment agreement
with the Companys Chief Executive Officer. The agreement sets forth certain of
the terms of employment, including the right to receive 12 months of salary as
severance pay upon (i) termination of employment without cause (as defined in
the agreements) or (ii) resignation for good reason (as defined in the
agreements). The term of the agreement is three years and provides for a
current base salary of $159,000 subject to annual cost of living adjustments.

Effective March 6, 2000, the Company entered into an employment agreement with
the Companys Chief Operating Officer. The agreement sets forth certain of the
terms of employment, including current base salary of $115,000 and the right to
receive 6 months salary as severance pay upon (i) termination of employment
without cause (as defined in the agreements) or (ii) resignation for good
reason (as defined in the agreements).

Litigation

The Company is involved in litigation and threatened litigation arising in the
ordinary course of business. However, it is the opinion of management that
these actions, when finally concluded, will not have a material adverse effect
upon the financial position, results of operations or cash flows of the
Company.

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California Beach Restaurants, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

April 30, 2001

9. Quarterly Results of Operations (Unaudited)

The following is a summary of the quarterly results of operations for the years
ended April 30, 2001, 2000 and 1999:

|                                    |         |   |                                       |       |         |   |         |       |          |   |          |       |   |   |       |       |   |   |        |       |  
|----------------------------------- | ------- | - | ------------------------------------- | ----- | ------- | - | ------- | ----- | -------- | - | -------- | ----- | - | - | ----- | ----- | - | - | ------ | ----- | -
|                                    |         |   | Quarter Ended                         |       | Year   
|                                    |         |   |                                       |       | Ended  
|                                    |         |   | July 31                               |       | Oct. 31 |   | Jan. 31 |       | April 30 |   | April 30
|                                    |         |   |                                       |       |         |   |         |       |          |   |         
|                                    |         |   | (in
thousands, except per share data)
|2001                                |         |   |                                       |       |         |   |         |       |          |   |          |       |   |   |       |       |   |   |        |      
|                                   
|                                   
|                                   
|                                   
|Sales                               |         | $ | 3,905                                 |       |         | $ | 3,709   |       |          | $ | 3,346    |       |   | $ | 3,061 |       |   | $ | 14,021 |      
|                                   
|                                   
|                                   
|                                   
|Operating
Income (loss)             |         | $ | 299                                   |       |         | $ | 212     |       |          | $ | (335     | )     |   | $ | (123  | )     |   | $ | 53     |      
|                                   
|                                   
|                                   
|                                   
|Net
Income (Loss)                   |         | $ | 243                                   |       |         | $ | 161     |       |          | $ | (386     | )     |   | $ | (145  | )     |   | $ | (127   | )    
|                                   
|                                   
|                                   
|                                   
|Net
Income (Loss) per common share: |         |   |                                       |       |         |   |         |       |          |   |          |       |   |   |       |       |   |   |        |      
|                                   
|                                   
|                                   
|                                   
|                                    | Basic   |   | $                                     | 0.07  |         |   | $       | 0.05  |          |   | $        | (0.11 | ) |   | $     | (0.05 | ) |   | $      | (0.04 | )
|                                   
|                                   
|                                   
|                                   
|                                    | Diluted |   | $                                     | 0.07  |         |   | $       | 0.03  |          |   | $        | (0.11 | ) |   | $     | (0.05 | ) |   | $      | (0.04 | )
|                                   
|                                   
|                                   
|                                   
|Weighted avg. shares outstanding:   |         |   |                                       |       |         |   |         |       |          |   |          |       |   |   |       |       |   |   |        |      
|                                   
|                                   
|                                   
|                                   
|                                    | Basic   |   |                                       | 3,401 |         |   |         | 3,401 |          |   |          | 3,401 |   |   |       | 3,401 |   |   |        | 3,401 |  
|                                   
|                                   
|                                   
|                                   
|                                    | Diluted |   |                                       | 3,401 |         |   |         | 5,201 |          |   |          | 3,401 |   |   |       | 3,401 |   |   |        | 3,401 |  
|                                   
|                                   
|                                   
|                                   
|2000                                |         |   |                                       |       |         |   |         |       |          |   |          |       |   |   |       |       |   |   |        |      
|                                   
|                                   
|                                   
|                                   
|Sales                               |         | $ | 3,140                                 |       |         | $ | 3,523   |       |          | $ | 3,595    |       |   | $ | 3,124 |       |   | $ | 13,382 |      
|                                   
|                                   
|                                   
|                                   
|Operating
Income (Loss)             |         | $ | 92                                    |       |         | $ | 133     |       |          | $ | (272     | )     |   | $ | 124   |       |   | $ | 77     |      
|                                   
|                                   
|                                   
|                                   
|Net
Income (Loss)                   |         | $ | (160                                  | )     |         | $ | (116    | )     |          | $ | (539     | )     |   | $ | (106  | )     |   | $ | (921   | )    
|                                   
|                                   
|                                   
|                                   
|Net
Income (Loss) per common share: |         |   |                                       |       |         |   |         |       |          |   |          |       |   |   |       |       |   |   |        |      
|                                   
|                                   
|                                   
|                                   
|                                    | Basic   |   | $                                     | (0.05 | )       |   | $       | (0.03 | )        |   | $        | (0.16 | ) |   | $     | (0.03 | ) |   | $      | (0.27 | )
|                                   
|                                   
|                                   
|                                   
|                                    | Diluted |   | $                                     | (0.05 | )       |   | $       | (0.03 | )        |   | $        | (0.16 | ) |   | $     | (0.03 | ) |   | $      | (0.27 | )
|                                   
|                                   
|                                   
|                                   
|Weighted avg. shares outstanding:   |         |   |                                       |       |         |   |         |       |          |   |          |       |   |   |       |       |   |   |        |      
|                                   
|                                   
|                                   
|                                   
|                                    | Basic   |   |                                       | 3,401 |         |   |         | 3,401 |          |   |          | 3,401 |   |   |       | 3,401 |   |   |        | 3,401 |  
|                                   
|                                   
|                                   
|                                   
|                                    | Diluted |   |                                       | 3,401 |         |   |         | 3,401 |          |   |          | 3,401 |   |   |       | 3,401 |   |   |        | 3,401 |  
|                                   
|                                   
|                                   
|                                   
|1999                                |         |   |                                       |       |         |   |         |       |          |   |          |       |   |   |       |       |   |   |        |      
|                                   
|                                   
|                                   
|                                   
|Sales                               |         | $ | 3,554                                 |       |         | $ | 3,584   |       |          | $ | 3,475    |       |   | $ | 3,074 |       |   | $ | 13,687 |      
|                                   
|                                   
|                                   
|                                   
|Operating
Income (Loss)             |         | $ | 281                                   |       |         | $ | 308     |       |          | $ | (270     | )     |   | $ | 18    |       |   | $ | 337    |      
|                                   
|                                   
|                                   
|                                   
|Net
Income (Loss)                   |         | $ | 85                                    |       |         | $ | 69      |       |          | $ | (569     | )     |   | $ | (265  | )     |   | $ | (680   | )    
|                                   
|                                   
|                                   
|                                   
|Net
Income (Loss) per common share: |         |   |                                       |       |         |   |         |       |          |   |          |       |   |   |       |       |   |   |        |      
|                                   
|                                   
|                                   
|                                   
|                                    | Basic   |   | $                                     | 0.03  |         |   | $       | 0.02  |          |   | $        | (0.17 | ) |   | $     | (0.08 | ) |   | $      | (0.20 | )
|                                   
|                                   
|                                   
|                                   
|                                    | Diluted |   | $                                     | 0.03  |         |   | $       | 0.02  |          |   | $        | (0.17 | ) |   | $     | (0.08 | ) |   | $      | (0.20 | )
|                                   
|                                   
|                                   
|                                   
|Weighted avg. shares outstanding:   |         |   |                                       |       |         |   |         |       |          |   |          |       |   |   |       |       |   |   |        |      
|                                   
|                                   
|                                   
|                                   
|                                    | Basic   |   |                                       | 3,401 |         |   |         | 3,401 |          |   |          | 3,401 |   |   |       | 3,401 |   |   |        | 3,401 |  
|                                   
|                                   
|                                   
|                                   
|                                    | Diluted |   |                                       | 3,401 |         |   |         | 3,401 |          |   |          | 3,401 |   |   |       | 3,401 |   |   |        | 3,401 |  

34



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##### Table of Contents









SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Registrant has caused this report to be signed on its behalf by
the undersigned, thereunto authorized in the City of Los Angeles, in the State
of California, on July 28, 2000.

| |  |                                    |  |                                      
| |  | ---------------------------------- |  | -------------------------------------
| |  | CALIFORNIA BEACH RESTAURANTS, INC.
|
|
|
|
|
| |  | By:                                |  | /s/ Alan Redhead                     
| |  |                                    |  |                                      
| |  |                                    |  | Alan Redhead, Chief Executive Officer

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, this report has been signed below by the following persons in the
capacities and on the dates indicated.

|                                                     |  |                                                                                      |  |              
|---------------------------------------------------- |  | ------------------------------------------------------------------------------------ |  | -------------
|Signature                                            |  | Title                                                                                |  | Date         
|                                                     |  |                                                                                      |  |              
|                                                    
|/s/ Alan Redhead

Alan Redhead                       |  | Chairman of the Board Chief
Executive Officer, Director, and
Chief Financial Officer |  | July 27, 2001
|                                                    
|/s/ J. Christopher Lewis

J. Christopher Lewis       |  | Director                                                                             |  | July 27, 2001
|                                                    
|/s/ Jefferson W. Asher, Jr.

Jefferson W. Asher, Jr. |  | Director                                                                             |  | July 27, 2001
|                                                    
|/s/ Richard P. Bermingham

Richard P. Bermingham     |  | Director                                                                             |  | July 27, 2001
|                                                    
|/s/ Robert L. Morrison

Robert L. Morrison           |  | Director                                                                             |  | July 27, 2001

35



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##### Table of Contents









INDEX TO EXHIBITS

Item 14(a) 3

|       |  |                                                                                                                                                                                                                                                                                                         |  |           |  | 
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------- |  | 
|Item   |  |                                                                                                                                                                                                                                                                                                         |  | Method of
|Number |  | Description                                                                                                                                                                                                                                                                                             |  | Filing   
|       |  |                                                                                                                                                                                                                                                                                                         |  |          
|3.1    |  | Restated Articles of Incorporation of California Beach Restaurants,
Inc., as amended to date, including Certificate of Determination of
Rights and Preferences of Series A Convertible Preferred Stock (15)                                                                                            
|      
|      
|      
|      
|3.2    |  | By-Laws, as amended to-date (15)                                                                                                                                                                                                                                                                       
|      
|      
|      
|      
|10.10  |  | Registration Rights Agreement dated as of March 30, 1990 between I.H.V.
Corp., Robert J. Morris, Richard S. Stevens, California Beach Capital,
Inc. and certain investors. (4)                                                                                                                         
|      
|      
|      
|      
|10.13  |  | Amended and Restated Concession Agreement No. 31923 for Will Rogers
State Beach Park Restaurant dated April 2, 1981, as amended (Gladstones
restaurant lease). (5)                                                                                                                                    
|      
|      
|      
|      
|10.14  |  | Concession Agreement No. 45334 for the Operation and Maintenance of
Parking Lot 4 at Will Rogers State Beach Park dated August 23, 1983, as
amended (Gladstones parking lot lease). (5)                                                                                                               
|      
|      
|      
|      
|10.18  |  | Amendment to Registration Rights Agreement dated as of February 25, 1991
among Registrant, California Beach Capital, Inc., Robert J. Morris,
Richard S. Stevens, Sand and Sea Partners, Sea Fair Partners, W.R. Grace
& Co., Eli Broad, Cushman/Sea View Partners and Cushman K/Sea View
Partners. (19)
|      
|      
|      
|      
|10.24  |  | License Agreement, dated April 21, 1992, between Sea View Restaurants,
Inc. and MCA Development Venture Two. (9)                                                                                                                                                                                       
|      
|      
|      
|      
|10.26  |  | Indemnification agreement dated as of October 7, 1992 between the
Registrant and Alan Redhead(10)                                                                                                                                                                                                      
|      
|      
|      
|      
|10.27  |  | Indemnification agreement dated as of October 7, 1992 between the
Registrant and Mark E. Segal(10)                                                                                                                                                                                                     
|      
|      
|      
|      
|10.28  |  | Indemnification agreement dated as of October 7, 1992 between the
Registrant and J. Christopher Lewis(10)                                                                                                                                                                                              
|      
|      
|      
|      
|10.30  |  | Indemnification agreement dated November 23, 1992 between the Registrant
and Jefferson W. Asher, Jr.(10)                                                                                                                                                                                               
|      
|      
|      
|      
|10.31  |  | Amendment number 6 to concession agreement number 31923 for Will Rogers
State Beach Park Restaurant(10)                                                                                                                                                                                                
|      
|      
|      
|      
|10.32  |  | Executive employment agreement dated as of May 21, 1993 between the
Registrant and Alan Redhead(10)*                                                                                                                                                                                                   

36



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##### Table of Contents



|       |  |                                                                                                                                                                                                           |  |           |  | 
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------- |  | 
|Item   |  |                                                                                                                                                                                                           |  | Method of
|Number |  | Description                                                                                                                                                                                               |  | Filing   
|       |  |                                                                                                                                                                                                           |  |          
|      
|      
|      
|      
|10.33  |  | Executive employment agreement dated as of May 21, 1993 between the
Registrant and Mark E. Segal(10)*                                                                                                    
|      
|      
|      
|      
|10.40  |  | Amended and Restated Loan Agreement dated as of December 22, 1994 between
Sea View Restaurants, Inc. and Bank of America NT &SA(13)                                                                      
|      
|      
|      
|      
|10.41  |  | Guarantor Confirmation and Amendment dated December 22, 1994 between
California Beach Restaurants, Inc. and Bank of America NT & SA(13)                                                                  
|      
|      
|      
|      
|10.42  |  | Stock Purchase Agreement dated December 22, 1994 between California
Beach Restaurants, Inc. and Bank of America NT & SA(13)                                                                              
|      
|      
|      
|      
|10.43  |  | Shareholders and Noteholders Agreement dated as of December 22, 1994
among Sand and Sea Partners, Sea Fair Partners and Bank of America NT & SA(13)                                                      
|      
|      
|      
|      
|10.45  |  | Securities Purchase Agreement dated December 22, 1994 between California
Beach Restaurants, Inc. and the purchasers named therein(13)                                                                    
|      
|      
|      
|      
|10.47  |  | California Beach Restaurants, Inc. Omnibus Stock Plan*                                                                                                                                                   
|      
|      
|      
|      
|10.49  |  | Amended and Restated lease for RJs dated January 1, 1995 (15)                                                                                                                                           
|      
|      
|      
|      
|10.50  |  | Stock Option Agreement between the Registrant and Alan Redhead dated
March 13, 1995 (15)*                                                                                                                
|      
|      
|      
|      
|10.51  |  | Stock Option Agreement between the Registrant and Mark E. Segal dated
March 13, 1995 (15)*                                                                                                               
|      
|      
|      
|      
|10.52  |  | Stock Option Agreement between the Registrant and Jefferson W. Asher,
Jr. dated March 13, 1995 (15)*                                                                                                     
|      
|      
|      
|      
|10.53  |  | First Amendment to Amended and Restated Loan Agreement dated as of
August 1, 1995, between Sea View Restaurants, Inc. and Bank of America
NT & SA (16)                                                   
|      
|      
|      
|      
|10.54  |  | Amendment to Stock Purchase Agreement dated as of August 1, 1995 between
the Registrant and Bank of America NT & SA (16)                                                                                 
|      
|      
|      
|      
|10.55  |  | Amendment No. 1 to executive employment agreement of Mark E. Segal,
dated April 30, 1996 (17) *                                                                                                          
|      
|      
|      
|      
|10.56  |  | Commitment Letter  Finova Capital Corporation re: $3,000,000 Secured
Credit Facility (18)                                                                                                               
|      
|      
|      
|      
|10.57  |  | Concession Agreement dated as of November 1, 1997 by and between County
of Los Angeles and Sea View Restaurants, Inc. (20)                                                                               
|      
|      
|      
|      
|10.58  |  | Non Disturbance and Attornment Agreement dated September 26, 1997 by and
Between the State of California Department of Parks and Recreation and
Sea View Restaurants, Inc. (20)                          
|      
|      
|      
|      
|10.59  |  | Letter of Credit Agreement dated as of November 1, 1997 by and between
California Beach Restaurants, Inc., Sea View Restaurants, Inc. and
Overhead Partners, L.P., a California Limited Partnership. (20)

37



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##### Table of Contents



|       |  |                                                                                                                                                                                                                    |  |           |  | 
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------- |  | 
|Item   |  |                                                                                                                                                                                                                    |  | Method of
|Number |  | Description                                                                                                                                                                                                        |  | Filing   
|       |  |                                                                                                                                                                                                                    |  |          
|      
|      
|      
|      
|10.60  |  | Line of Credit Agreement dated as of November 24, 1997 by and between
Outside LLC, a California Limited Liability Company and Sea View
Restaurants, Inc., with guaranty by California Beach Restaurants, Inc.
(20)
|      
|      
|      
|      
|10.61  |  | Executive employment agreement dated as of November 14, 1997 between the
Registrant and Alan Redhead. (21) *                                                                                                      
|      
|      
|      
|      
|10.62  |  | Assignment of trademarks, service marks and registrations thereof,
between Sea View Restaurants, Inc., and the Registrant, dated October
30, 1997. (22)                                                           
|      
|      
|      
|      
|10.63  |  | Non-exclusive royalty free license agreement, between the Registrant and
Sea View Restaurants, Inc., dated October 30, 1997. (22)                                                                                 
|      
|      
|      
|      
|10.64  |  | Letter of Credit Agreement, dated as of July 22, 1998, by and between
California Beach Restaurants, Inc., Sea View Restaurants, Inc., and
Overhead Partners L.P., a California Limited Partnership (23)           
|      
|      
|      
|      
|10.65  |  | Letter of Credit Agreement, dated as of November 1, 1998, by and between
California Beach Restaurants, Inc., Sea View Restaurants, Inc., and
Overhead Partners L.P., a California Limited Partnership (24)        
|      
|      
|      
|      
|10.66  |  | Line of Credit Agreement, dated as of November 30, 1998, by and between
Sea Sea View Restaurants, Inc., and Outside LLC, a California Limited
Liability Company (24)                                              
|      
|      
|      
|      
|10.67  |  | First Amendment to Concession Agreement For Will Rogers State Beach Park
Restaurant, by and between the County of Los Angeles, and Sea View
Restaurants, Dated February 9, 1999 (25)                              
|      
|      
|      
|      
|10.68  |  | Note Purchase Agreement among the Registrant and certain other
purchasers, dated as of March 30, 1999, including Exhibit A thereto, the
5% Convertible Subordinated Note Due March 30, 2003.(26)                  
|      
|      
|      
|      
|10.69  |  | Note Agreement, between California Beach Restaurants, Inc., Sea View
Restaurants, Inc., and Lyon Credit Corporation and related documents.
(27)                                                                   
|      
|      
|      
|      
|10.70  |  | Revolving line of credit agreement between California Beach Restaurants,
Inc., Sea View Restaurants, Inc.,and U.S. Bank (formerly Santa Monica
Bank),dated July 7, 1999. (27)                                     
|      
|      
|      
|      
|10.71  |  | Standby letter of credit agreement between California Beach Restaurants,
Inc., and U.S. Bank (formerly Santa Monica Bank), Dated July 9, 1999.
(27)                                                               
|      
|      
|      
|      
|10.72  |  | Change in Terms Agreement, dated as of September 30, 1999, Between
California Beach Restaurants, Inc. and U.S. Bank and Related Documents.
(28)                                                                   
|      
|      
|      
|      
|10.73  |  | Line of Credit agreement, dated as of March 22, 2000, by and between Sea
View Restaurants, Inc., and Space Partners, a California general
partnership.                                                            
|      
|      
|      
|      
|10.74  |  | Executive employment agreement dated as of March 6, 2000 between the
Registrant and Robert Kissinger.*                                                                                                            

38



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##### Table of Contents



|       |  |                                                                                                                                                                                |  |           |  | 
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------- |  | 
|Item   |  |                                                                                                                                                                                |  | Method of
|Number |  | Description                                                                                                                                                                    |  | Filing   
|       |  |                                                                                                                                                                                |  |          
|      
|      
|      
|      
|10.75  |  | Revolving line of credit agreement between California Beach Restaurants,
Inc., Sea view Restaurants, Inc., and U.S. Bank (formerly Santa Monica
Bank), Dated July 6, 2000.    
|      
|      
|      
|      
|10.76  |  | Standby letter of credit agreement between California Beach Restaurants,
Inc., and U.S. Bank (formerly Santa Monica Bank), Dated July 6, 2000.                                
|      
|      
|      
|      
|10.77  |  | Amendment to business loan agreement between California Beach
Restaurants, Inc., and U.S. Bank (formerly Santa Monica Bank), Dated
March 25, 2000.                            
|      
|      
|      
|      
|10.78  |  | Amendment of Parking Management Agreement, dated as of October 23, 2000
between Seaview Restaurants, Inc., and Standard Parking, Inc.(29)                                     
|      
|      
|      
|      
|10.79  |  | Revolving line of credit agreement between California Beach Restaurants,
Inc., Sea view Restaurants, Inc., and U.S. Bank (formerly Santa Monica
Bank), Dated June 22, 2001.(A)
|      
|      
|      
|      
|10.80  |  | Amendment to business loan agreement between California Beach
Restaurants, Inc., and U.S. Bank (formerly Santa Monica Bank), Dated
March 26, 2001.(A)                         
|      
|      
|      
|      
|21.1   |  | Subsidiaries of the Registrant (15)                                                                                                                                           
|      
|      
|      
|      
|23.1   |  | Consent of Ernst & Young LLP (A)                                                                                                                                              



---

|(A)  |  | Filed herewith electronically                                                                                                         
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------
|    
|    
|    
|    
|(4)  |  | Previously filed with Form 8-K filed April 27, 1990. **                                                                               
|    
|    
|    
|    
|(5)  |  | Previously filed with Form 10-K for the fiscal year ended April 30, 1990. **                                                          
|    
|    
|    
|    
|(7)  |  | Previously filed with Form 10-Q for the quarter ended January 31, 1991. **                                                            
|    
|    
|    
|    
|(9)  |  | Previously filed with Form 8-K filed April 28, 1992. **                                                                               
|    
|    
|    
|    
|(10) |  | Previously filed with Form 10-K for the fiscal year ended April 30, 1993. **                                                          
|    
|    
|    
|    
|(13) |  | Previously filed with Form 8-K filed January 18, 1995. **                                                                             
|    
|    
|    
|    
|(15) |  | Previously filed with Form 10-K for the fiscal year ended April 30, 1995. **                                                          
|    
|    
|    
|    
|(16) |  | Previously filed with Form S-1 on August 4, 1995, Registration No. 33-95240. **                                                       
|    
|    
|    
|    
|(17) |  | Previously filed with Form 10-K for the fiscal year ended April 30, 1996. **                                                          
|    
|    
|    
|    
|(18) |  | Previously filed with Form 10-Q for the quarter ended January 31, 1997. **                                                            
|    
|    
|    
|    
|(19) |  | Previously filed with Form 10-K for the fiscal year ended April 30, 1997.**                                                           
|    
|    
|    
|    
|(20) |  | Previously filed with Form 10-Q for the quarter ended October 31, 1997.**                                                             
|    
|    
|    
|    
|(21) |  | Previously filed with Form 10-Q for the quarter ended January 31, 1998.**                                                             
|    
|    
|    
|    
|(22) |  | Previously filed with Form 10-K for the fiscal year ended April 30,
1998.**                                                           
|    
|    
|    
|    
|(23) |  | Previously filed with Form 10-Q for the quarter ended July 31, 1998.**                                                                
|    
|    
|    
|    
|(24) |  | Previously filed with Form 10-Q for the quarter ended October 31, 1998.**                                                             
|    
|    
|    
|    
|(25) |  | Previously filed with Form 10-Q for the quarter ended January 31, 1999.**                                                             
|    
|    
|    
|    
|(26) |  | Incorporated by reference to Amendment No. 1 to Schedule 13D filed with
the Commission on April 16, 1999, on behalf of Alan Redhead.**
|    
|    
|    
|    
|(27) |  | Previously filed with Form 10-Q for the quarter ended July 31, 1999 **                                                                
|    
|    
|    
|    
|(28) |  | Previously filed with Form 10-Q for the quarter ended October 31, 1999 **                                                             
|    
|    
|    
|    
|(29) |  | Previously filed with Form 10-Q for the quarter ended October 31, 2000 **                                                             
|    
|    
|    
|    
|*    |  | This is a management contract or compensatory plan or arrangement.                                                                    
|    
|    
|    
|    
|**   |  | All filings were made at the Commissions office in Washington D.C.; The
Registrants SEC file number is 0-12226.                     

39