**SECURITIES AND EXCHANGE COMMISSION**

 

**WASHINGTON, D.C.20549**

 

**FORM 10-K/A******

**AMENDMENT NO. 1**

 

**ANNUAL REPORTPURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934**

 
| **For  the Fiscal Year Ended December 29, 2003** |   | **Commission File Number: 0-18668** |
|-------------------------------------------------------|--------|-------------------------------------|

 

**MAIN STREET AND MAIN INCORPORATED**

(Exact name of registrant asspecified in its charter)

 
| **DELAWARE**                                                      |   | **11-2948370**                            |
|-------------------------------------------------------------------|--------|-------------------------------------------|
| (State or other jurisdiction of  incorporation or organization)   |   | (I.R.S. Employer  Identification Number.) |
|                                                              |   |                                      |
| **5050 NORTH 40TH STREET  SUITE 200, PHOENIX, ARIZONA**           |   | **85018**                                 |
| (Address of principal executive  offices)                         |   | (Zip Code)                                |
|                                                              |   |                                      |
| **(602) 852-9000**                                                |
| Registrant’s telephone number,  including area code          |
|                                                              |   |                                      |
| Securities registered pursuant  to Section 12(b) of the Act: |
| **None**                                                          |
|                                                              |   |                                      |
| Securities registered pursuant  to Section 12(g) of the Act: |
| **Common Stock, $.001 par value**                                 |

 

Indicate by check mark whether the registrant(1) has filed all reports required to be filed by Section 13 or 15(d) ofthe Securities Exchange Act of 1934 during the preceding 12 months (or for suchshorter 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 ý No o

 

Indicate by check mark if disclosure ofdelinquent filers pursuant to Item 405 of Regulation S-K is not containedherein, and will not be contained, to the best of registrant’s knowledge, indefinitive proxy or information statements incorporated by reference in PartIII of this Form 10-K or any amendment to this Form 10-K.  o

 

Indicate by check mark whether the registrantis an accelerated filer (as defined in Exchange Act Rule 12b-2).  Yes o  No. ý

 

At June 30, 2003, there were outstanding14,129,928 shares of the registrant’s common stock, $.001 par value.  The aggregate market value of common stockheld by nonaffiliates of the registrant (8,304,305 shares) based on the closingsale price of the common stock as reported on the Nasdaq National Market onJune 30, 2003 ($2.12 per share) was $17,605,513.  For purposes of this computation, all officers, directors, and10% beneficial owners of the registrant are deemed to be affiliates.  Such determination should not be deemed anadmission that such officers, directors, or 10% beneficial owners are, in fact,affiliates of the registrant.

 

Documents incorporatedby reference:  None.

 

 

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**MAIN STREET AND MAIN INCORPORATED**

 

**FORM 10-K/A AMENDMENT NO. 1**

 

**FISCAL YEAR ENDED DECEMBER 29, 2003**

 

**Explanatory Note**

 

This Amendment No. 1 to the Annual Report onForm 10-K of Main Street and Main Incorporated (the “Company”) amends theCompany’s Annual Report on Form 10-K for the fiscal year endedDecember 29, 2003, originally filed on March 26, 2004 (the “OriginalFiling”).  The Company is filing thisAmendment No. 1 for the sole purpose of revising the Independent Auditors’Report in Item 8 to include the auditors’ signature, which signature wasomitted from the report filed with the Original Filing due to a clericalerror.  In addition, in connection withthe filing of this Amendment No. 1 and pursuant to the rules of the Securitiesand Exchange Commission, the Company is including with this Amendment No. 1certain currently dated certifications.

 

Except as described above, no other changeshave been made to the Original Filing. This Amendment No. 1 continues to speak as of the date of the OriginalFiling, and the registrant has not updated the disclosures contained therein toreflect any events that occurred at a date subsequent to the filing of theOriginal Filing.  The filing of thisAmendment No. 1 is not a representation that any statements contained in Form10-K are true or complete as of any date subsequent to the date of the OriginalFiling.

 

**TABLE OF CONTENTS**

 
| PART II                                             |   |
|-----------------------------------------------------|--------|
|                                                |   |
| ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |   |
|                                                |   |
| SIGNATURES                                          |   |
|                                                |   |
| INDEX TO CONSOLIDATED FINANCIAL STATEMENTS          |   |

 

2

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**PART II**

 

**ITEM 8****.****                      ****FINANCIAL STATEMENTS AND SUPPLEMENTARYDATA**

 

Reference is made to the consolidated financialstatements, the reports thereon, the notes thereto, and the supplementary datacommencing at page F-1 of this Form 10-K/A, which consolidated financialstatements, reports, notes, and data are incorporated by reference.

 

3

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**SIGNATURES**

 

Pursuant to the requirements of Section 13 or 15(d)of the Securities Exchange Act of 1934, the registrant has duly caused thisreport to be signed on its behalf by the undersigned, thereunto dulyauthorized.

 
|                           | MAIN STREET AND MAIN INCORPORATED |
|--------------------------------|-----------------------------------|
|                           |                              |
|                           |                              |
| Date:   July 2, 2004 | By:                               | /s/William G. Shrader |
|                           |                              | William G. Shrader |
|                           |                              | Chief Executive Officer |

 

4

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**MAIN STREET AND MAIN INCORPORATED**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

 
| Independent Auditors’  Report - Mayer Hoffman McCann P.C.                                                                                                                                           |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                     |   |
| Independent Auditors’  Report - KPMG LLP                                                                                                                                                            |   |
|                                                                                                                                                                                                     |   |
| Consolidated Balance Sheets  as of December 29, 2003 and December 30, 2002                                                                                                                     |   |
|                                                                                                                                                                                                     |   |
| Consolidated  Statements of Operations for the fiscal years ended December 29, 2003,  December 30, 2002, and December 31, 2001                                                            |   |
|                                                                                                                                                                                                     |   |
| Consolidated  Statements of Changes in Stockholders’ Equity and Comprehensive Income (Loss)  for the fiscal years ended December 29, 2003, December 30, 2002,  and December 31, 2001 |   |
|                                                                                                                                                                                                     |   |
| Consolidated  Statements of Cash Flows for the fiscal years ended December 29, 2003,  December 30, 2002, and December 31, 2001                                                            |   |
|                                                                                                                                                                                                     |   |
| Notes to Consolidated Financial Statements                                                                                                                                                               |   |

 

F-1

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**INDEPENDENT****AUDITORS’REPORT**

 

To the Board of Directors of Main Street and MainIncorporated

 

We have audited the accompanying consolidatedbalance sheet of Main Street and Main Incorporated and subsidiaries as ofDecember 29, 2003, and the related consolidated statements of operations,changes in stockholders’ equity and comprehensive income (loss) and cash flowsfor the year then ended.  Theseconsolidated financial statements are the responsibility of the Company’smanagement.  Our responsibility is toexpress an opinion on these consolidated financial statements based on ouraudit.  The consolidated financialstatements of the Company as of December 30, 2002, and for each of the twoyears in the period ended December 30, 2002, were audited by otherauditors whose report dated March 4, 2003, expressed an unqualifiedopinion on those statements.

 

We conducted our audit in accordance with U.S.generally accepted auditing standards. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement.  An auditincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation.  Webelieve that our audit provides a reasonable basis for our opinion.

 

In our opinion, the consolidated financialstatements referred to above present fairly, in all material respects, thefinancial position of Main Street and Main Incorporated and subsidiaries atDecember 29, 2003, and the results of their operations and their cashflows for the year then ended in conformity with U.S. generally acceptedaccounting principles.

 
| /s/ Mayer Hoffman McCann P.C. |   |
|-------------------------------|--------|
|                          |
| MAYER HOFFMAN MCCANN P.C.     |
| Phoenix, Arizona              |
| March 9,  2004           |

 

F-2

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**INDEPENDENT AUDITORS’REPORT**

 

The Board of DirectorsMain Street and Main Incorporated:

 

We have audited the accompanying consolidated balance sheet of MainStreet and Main Incorporated and subsidiaries as of December 30, 2002, andthe related consolidated statements of operations, changes in stockholders’equity and comprehensive income (loss) and cash flows for the years endedDecember 30, 2002 and December 31, 2001.  These consolidated financial statements are the responsibility ofthe Company’s management.  Ourresponsibility is to express an opinion on these consolidated financialstatements based on our audits.

 

We conducted our audits in accordance with auditing standards generallyaccepted in United States of America. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of materialmisstatement.  An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements.  An audit alsoincludes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statementpresentation.  We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the consolidated financial statements referred to abovepresent fairly, in all material respects, the financial position of Main Streetand Main Incorporated and subsidiaries as of December 30, 2002 and theresults of their operations and their cash flows for the years ended December 30,2002 and December 31, 2001, in conformity with accounting principlesgenerally accepted in United States of America.

 

As discussed in Note 2 to the consolidated financial statements, theCompany adopted the provisions of SFAS No. 142, *Goodwill and Other Intangible Assets*which changed the Company’s method of accounting for goodwill and otherintangible assets effective January 1, 2002.

 
| /s/ KPMG LLP       |   |
|--------------------|--------|
|               |
| Phoenix, Arizona   |
| March 4, 2003 |

 

F-3

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**MAIN STREET AND MAIN INCORPORATED AND SUBSIDIARIES**

**CONSOLIDATEDBALANCE SHEETS**

**(In Thousands, Except Par Value and Share Data)**

 
|                                                                                                                                                  |   | **December 29,  2003** |    | **December 30,****2002** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|---------|-------------------------------|--------|
| ASSETS                                                                                                                                                |   |                        |    |                          |   |
| Current  assets:                                                                                                                                      |   |                        |    |                          |   |
| Cash and cash  equivalents                                                                                                                            |   | $                           | 4,600   |                          | $      | 5,621 |   |
| Accounts receivable                                                                                                                                   |   | 1,494                       |    | 1,997                         |   |
| Inventories                                                                                                                                           |   | 2,762                       |    | 2,832                         |   |
| Prepaid  expenses                                                                                                                                     |   | 971                         |    | 2,104                         |   |
| Total current  assets                                                                                                                                 |   | 9,827                       |    | 12,554                        |   |
| Property and  equipment, net                                                                                                                          |   | 68,129                      |    | 71,265                        |   |
| Other assets,  net                                                                                                                                    |   | 2,218                       |    | 2,449                         |   |
| Notes  receivable, net                                                                                                                                |   | 1,657                       |    | —                        |   |
| Goodwill                                                                                                                                              |   | 21,685                      |    | 22,995                        |   |
| Franchise area  fees, net                                                                                                                             |   | 2,691                       |    | 3,132                         |   |
|                                                                                                                                                  |   |                        |    |                          |   |
| Total assets                                                                                                                                          |   | $                           | 106,207 |                          | $      | 112,395 |   |
|                                                                                                                                                  |   |                        |    |                          |   |
| LIABILITIES  AND STOCKHOLDERS’ EQUITY                                                                                                            |   |                        |    |                          |   |
| Current  liabilities:                                                                                                                                 |   |                        |    |                          |   |
| Current  portion of long-term debt                                                                                                                    |   | $                           | 3,815   |                          | $      | 3,502 |   |
| Accounts  payable                                                                                                                                     |   | 6,408                       |    | 8,073                         |   |
| Other accrued  liabilities                                                                                                                            |   | 16,577                      |    | 16,007                        |   |
| Total current  liabilities                                                                                                                            |   | 26,801                      |    | 27,582                        |   |
| Long-term  debt, net of current portion                                                                                                               |   | 47,869                      |    | 51,998                        |   |
| Other  liabilities and deferred credits                                                                                                               |   | 2,441                       |    | 3,205                         |   |
|                                                                                                                                                  |   |                        |    |                          |   |
| Total liabilities                                                                                                                                     |   | 77,110                      |    | 82,785                        |   |
|                                                                                                                                                  |   |                        |    |                          |   |
| Commitments,  contingencies and subsequent events (see notes 4, 7, 8, 9 and 10)                                                                       |   |                        |    |                          |   |
|                                                                                                                                                  |   |                        |    |                          |   |
| Stockholders’  equity:                                                                                                                           |   |                        |    |                          |   |
| Preferred  stock, $.001 par value, 2,000,000 shares authorized, no shares issued and  outstanding in 2003 and 2002                                    |   | —                      |    | —                        |   |
| Common stock,  $.001 par value, 25,000,000 shares authorized, 14,642,000 and 14,142,000  shares issued and outstanding in 2003 and 2002, respectively |   | 15                          |    | 14                            |   |
| Additional  paid-in capital                                                                                                                           |   | 54,927                      |    | 53,927                        |   |
| Accumulated  other comprehensive loss                                                                                                                 |   | (2,053                      | )       | (2,504                        | )      |
| Accumulated  deficit                                                                                                                                  |   | (23,792                     | )       | (21,827                       | )      |
| Total  stockholders’ equity                                                                                                                      |   | 29,097                      |    | 29,610                        |   |
| Total  liabilities and stockholders’ equity                                                                                                      |   | $                           | 106,207 |                          | $      | 112,395 |   |

 

*Theaccompanying notes are an integral part of these consolidated financialstatements.*

 

F-4

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**MAIN STREET AND MAIN INCORPORATED AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(In Thousands, Except Per Share Amounts)**

 
|                                            |   | **Years Ended**             |    |
|-------------------------------------------------|--------|-----------------------------|---------|
|                                            |   | **December 29,  2003** |    | **December 30,  2003** | ** ** | **December 31,  2003** | ** ** |
| Revenue                                         |   | $                           | 224,494 |   | $ | 220,151 |   | $ | 211,823 |   |
| Restaurant  operating expenses                  |   |                        |    |   |   |   |   |
| Cost of sales                                   |   | 60,299                      |    | 61,270 |   | 59,139 |   |
| Payroll and  benefits                           |   | 70,415                      |    | 68,997 |   | 65,784 |   |
| Depreciation  and amortization                  |   | 8,386                       |    | 7,895 |   | 7,845 |   |
| Other  operating expenses                       |   | 70,079                      |    | 65,912 |   | 61,285 |   |
| Total  restaurant operating expenses            |   | 209,179                     |    | 204,074 |   | 194,053 |   |
| Income from  restaurant operations              |   | 15,315                      |    | 16,077 |   | 17,770 |   |
|                                            |   |                        |    |   |   |   |   |
| Other  operating expense and income:            |   |                        |    |   |   |   |   |
| Amortization  of intangible assets              |   | 606                         |    | 461 |   | 1,831 |   |
| General and  administrative expenses            |   | 8,977                       |    | 8,946 |   | 8,105 |   |
| Pre-opening  expenses                           |   | 907                         |    | 1,619 |   | 1,417 |   |
| New manager  training expenses                  |   | 195                         |    | 426 |   | 327 |   |
| Impairment  charges and other                   |   | 5,906                       |    | 7,943 |   | 3,453 |   |
| Management fee  income                          |   | —                      |    | — |   | (432 | ) |
| Operating  income (loss)                        |   | (1,276                      | )       | (3,318 | ) | 3,069 |   |
|                                            |   |                        |    |   |   |   |   |
| Gain on sale  of assets                         |   | 3,831                       |    | — |   | — |   |
| Interest  expense and other, net                |   | 4,521                       |    | 3,950 |   | 3,825 |   |
| Net income  (loss) before income taxes          |   | (1,966                      | )       | (7,268 | ) | (756 | ) |
| Income tax  expense (benefit)                   |   | —                      |    | 1,309 |   | (645 | ) |
| Net income  (loss)                              |   | $                           | (1,966  | ) | $ | (8,577 | ) | $ | (111 | ) |
|                                            |   |                        |    |   |   |   |   |   |   |   |
| Basic earnings  per share:                      |   |                        |    |   |   |   |   |
| Net income  (loss)                              |   | $                           | (0.14   | ) | $ | (0.61 | ) | $ | (0.01 | ) |
|                                            |   |                        |    |   |   |   |   |   |   |   |
| Diluted  earnings per share:                    |   |                        |    |   |   |   |   |
| Net income  (loss)                              |   | $                           | (0.14   | ) | $ | (0.61 | ) | $ | (0.01 | ) |
|                                            |   |                        |    |   |   |   |   |   |   |   |
| Weighted  average number of shares outstanding: |   |                        |    |   |   |   |   |
| Basic                                           |   | 14,179                      |    | 14,105 |   | 14,048 |   |
|                                            |   |                        |    |   |   |   |   |
| Diluted                                         |   | 14,179                      |    | 14,105 |   | 14,048 |   |

 

*The accompanying notes are an integral partof these consolidated financial statements.*

 

F-5

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**MAIN STREET AND MAIN INCORPORATED AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CHANGES****IN STOCKHOLDERS’ EQUITY**

**AND COMPREHENSIVE INCOME (LOSS)**

**(In Thousands)**

 
|                                                      |   | **Common Stock** |   | **Additional** |   |                  |   | **Accumulated  Other**   |   |                    |    |
|-----------------------------------------------------------|--------|------------------|--------|----------------|--------|-----------------------|--------|--------------------------|--------|-------------------------|---------|
|                                                      |   | **Shares**       |   | **Par  Value** |   | **Paid-in   Capital** |   | **Accumulated  Deficit** |   | **Comprehensive  Loss** |    | **Total** |   |
| BALANCES,  December 25, 2000                         |   | 14,045           |   | $              | 14     |                  | $      | 53,624                   |   | $                       | (13,139 | ) | — |   | $ | 40,499 |   |
| Shares issued  in connection with options exercised (net) |   | 7                |   | —         |   | 21                    |   | —                   |   | —                  |    | 21 |   |
| Shares issued  to employees                               |   | 1                |   | —         |   | —                |   | —                   |   | —                  |    | — |   |
| Comprehensive  income (loss):                             |   |             |   |           |   |                  |   |                     |   |                    |    |   |   |
| Unrealized  loss on hedging contract                      |   | —           |   | —         |   | —                |   | —                   |   | (202                    | )       | (202 | ) |
| Net loss                                                  |   | —           |   | —         |   | —                |   | (111                     | )      | —                  |    | (111 | ) |
| Comprehensive  loss:                                      |   |             |   |           |   |                  |   |                     |   |                    |    | (313 | ) |
| BALANCES,  December 31, 2001                         |   | 14,053           |   | 14             |   | 53,645                |   | (13,250                  | )      | (202                    | )       | 40,207 |   |
| Shares issued  in connection with options exercised (net) |   | 89               |   | —         |   | 282                   |   | —                   |   | —                  |    | 282 |   |
| Comprehensive  income (loss):                             |   |             |   |           |   |                  |   |                     |   |                    |    |   |   |
| Unrealized  loss on hedging contract                      |   | —           |   | —         |   | —                |   | —                   |   | (2,302                  | )       | (2,302 | ) |
| Net loss                                                  |   | —           |   | —         |   | —                |   | (8,577                   | )      | —                  |    | (8,577 | ) |
| Comprehensive  loss:                                      |   |             |   |           |   |                  |   |                     |   |                    |    | (10,879 | ) |
| BALANCES,  December 30, 2002                         |   | 14,142           |   | 14             |   | 53,927                |   | (21,827                  | )      | (2,504                  | )       | 29,610 |   |
| Shares issued,  common stock                              |   | 500              |   | 1              |   | 1,000                 |   |                     |   |                    |    | 1,001 |   |
| Comprehensive  income (loss):                             |   |             |   |           |   |                  |   |                     |   |                    |    |   |   |
| Unrealized  loss on hedging contract                      |   | —           |   | —         |   | —                |   | —                   |   | 451                     |    | 451 |   |
| Net loss                                                  |   | —           |   | —         |   | —                |   | (1,966                   | )      | —                  |    | (1,966 | ) |
| Comprehensive  (loss):                                    |   | —           |   | —         |   | —                |   | —                   |   | —                  |    | (1,515 | ) |
| BALANCES,  December 29, 2003                         |   | 14,642           |   | $              | 15     |                  | $      | 54,927                   |   | $                       | (23,793 | ) | $ | (2,053 | ) | $ | 29,096 |   |
|                                                           |        |                  |        |                |        |                       |        |                          |        |                         |         |  |  |  |  |  |  |  |

 

*The accompanying notes are an integral part of theseconsolidated financial statements.*

 

F-6

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**MAIN STREET AND MAIN INCORPORATED AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(In Thousands)**

 
|                                                                                      |   | **Years Ended**             |   |
|-------------------------------------------------------------------------------------------|--------|-----------------------------|--------|
|                                                                                      |   | **December 29,  2003** |   | **December 30,  2002** |   | **December 31,  2001** |   |
| CASH FLOWS  FROM OPERATING ACTIVITIES:                                                    |   |                        |   |   |   |   |   |
| Net income (loss)                                                                         |   | $                           | (1,966 | ) | $ | (8,577 | ) | $ | (111 | ) |
| Adjustments to  reconcile net income (loss) to net cash provided by operating activities: |   |                        |   |   |   |   |   |
| Depreciation  and amortization                                                            |   | 8,992                       |   | 8,356 |   | 9,676 |   |
| Amortization  of note receivable discount                                                 |   | (22                         | )      | — |   | — |   |
| Gain on sale  of assets                                                                   |   | (3,831                      | )      | — |   | — |   |
| Impairment  charges and other                                                             |   | 5,906                       |   | 5,674 |   | 3,453 |   |
| Deferred  income taxes                                                                    |   | —                      |   | 1,650 |   | (1,048 | ) |
| Changes in  assets and liabilities:                                                       |   |                        |   |   |   |   |   |
| Accounts  receivable                                                                      |   | (390                        | )      | 686 |   | 1,994 |   |
| Inventories                                                                               |   | (55                         | )      | (416 | ) | (792 | ) |
| Prepaid  expenses                                                                         |   | 1,133                       |   | (849 | ) | (511 | ) |
| Other assets,  net                                                                        |   | 56                          |   | (300 | ) | (580 | ) |
| Accounts  payable                                                                         |   | (1,665                      | )      | 737 |   | (1,892 | ) |
| Other accrued  liabilities                                                                |   | (891                        | )      | 2,234 |   | 2,340 |   |
| Cash provided  by operating activities                                                    |   | 7,267                       |   | 9,195 |   | 12,529 |   |
| CASH FLOWS FROM  INVESTING ACTIVITIES:                                                    |   |                        |   |   |   |   |   |
|                                                                                      |   |                        |   |   |   |   |   |
| Additions to  property and equipment                                                      |   | (10,253                     | )      | (18,548 | ) | (14,013 | ) |
| Cash received  from notes receivable                                                      |   | 325                         |   | — |   | — |   |
| Cash paid to  acquire franchise rights and goodwill                                       |   | (50                         | )      | (30 | ) | (330 | ) |
| Cash received  from the sale of assets                                                    |   | 4,505                       |   | — |   | 2,851 |   |
| Cash used by  investing activities                                                        |   | (5,473                      | )      | (18,578 | ) | (11,492 | ) |
| CASH FLOWS  FROM FINANCING ACTIVITIES:                                                    |   |                        |   |   |   |   |   |
|                                                                                      |   |                        |   |   |   |   |   |
| Proceeds from  sale of common stock                                                       |   | 1,001                       |   | — |   | — |   |
| Financing and  offering costs paid                                                        |   | —                      |   | — |   | — |   |
| Proceeds  received from the exercise of stock options                                     |   |                        |   |   |   |   |   |
| Proceeds  received from the exercise of stock options                                     |   | —                      |   | 282 |   | 21 |   |
| Long-term debt  borrowings                                                                |   | —                      |   | 9,465 |   | 6,583 |   |
| Principal  payments on long-term debt                                                     |   | (3,816                      | )      | (4,209 | ) | (2,740 | ) |
| Cash provided  (used) by financing activities                                             |   | (2,815                      | )      | 5,538 |   | 3,864 |   |
| NET CHANGE IN  CASH AND CASH EQUIVALENTS                                                  |   | (1,021                      | )      | (3,845 | ) | 4,901 |   |
|                                                                                      |   |                        |   |   |   |   |   |
| CASH AND CASH  EQUIVALENTS, BEGINNING                                                     |   | 5,621                       |   | 9,466 |   | 4,565 |   |
| CASH AND CASH  EQUIVALENTS, ENDING                                                        |   | $                           | 4,600  |   | $ | 5,621 |   | $ | 9,466 |   |
| SUPPLEMENTAL  DISCLOSURE OF CASH FLOW INFORMATION                                         |   |                        |   |   |   |   |   |
| Cash paid  during the year for interest                                                   |   | $                           | 4,629  |   | $ | 4,139 |   | $ | 4,259 |   |
| Cash paid  during the year for income taxes                                               |   | $                           | 3      |   | $ | 118 |   | $ | 1,408 |   |

 

*The accompanying notes are an integral partof these consolidated financial statements.*

 

F-7

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**1.****                        ORGANIZATIONAND BASIS OF PRESENTATION**

 

MainStreet and Main Incorporated is a Delaware corporation engaged in the businessof acquiring, developing, and operating restaurants.  We currently own 54 TGI Friday’s restaurants, 12 Bamboo Clubrestaurants, four Redfish Grill and Bar restaurants, and one Alice Cooper’stownrestaurant.

 

*Principlesof Consolidation*

 

Theconsolidated financial statements include the accounts of our company and ourwholly owned subsidiaries.  All materialintercompany transactions have been eliminated in consolidation.  All references herein refer to our companyand our subsidiaries.

 

*FiscalYear*

 

Weoperate on a fiscal year that ends on the Monday on or before December 31.

 

*Use ofEstimates*

 

The preparation of consolidated financial statements inconformity with accounting principles generally accepted in the United Statesrequires a company to make a number of estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingentassets and liabilities at the date of the financial statements.  Such estimates and assumptions affect the reportedamounts of revenues and expenses during the reporting period.  On an ongoing basis, we evaluate estimatesand assumptions based upon historical experience and various other factors andcircumstances.  We believe our estimatesand assumptions are reasonable in the circumstances; however, actual resultsmay differ from these estimates under different future conditions.

 

We believe that the estimates and assumptions that aremost important to the portrayal of our financial condition and results ofoperations, in that they require our most difficult, subjective or complexjudgments, form the basis for the accounting policies deemed to be mostcritical to our operations.  Thesecritical accounting policies relate to the valuation and amortizable lives oflong-lived assets, goodwill, and other identifiable intangible assets,valuation of deferred tax assets, and reserves related to self-insurance forworkers compensation and general liability:

 

(1)                                  We periodically performasset impairment analysis of long-lived assets related to our restaurant locations,goodwill, and other identifiable intangible assets. We perform these testswhenever we experience a “triggering” event, such as a decision to close alocation or major change in a location’s operating environment, or other eventthat might impact our ability to recover our asset investment. Also, we have a policy of reviewing the financial operations of ourrestaurant locations on at least a quarterly basis.  Locations that are not meeting expectations are identified andcontinue to be watched closely throughout the year.  Primarily in the fourth quarter, we review actual results andanalyze budgets for the ensuing year. If we deem that a location’s results will continue to be belowexpectations, we analyze alternatives for its continued operation.  At this time, we perform an asset impairmenttest.  If we determined that the asset’sfair value is less than book and we will be unable to recover the value throughoperations, we record an impairment charge. Upon an event such as a formal decision for abandonment (restaurantclosure), we may record additional impairment of assets, including anallocation of goodwill. Any carryover basis of assets is depreciated over therespective remaining useful lives.

 

(2)                                  Periodically, we record (or reduce) the valuationallowance against our deferred tax assets to the amount that is more likelythan not to be realized based upon recent past financial performance, taxreporting positions, and expectations of future taxable income.

 

(3)                                  We use an actuarial based methodologyutilizing our historical experience factors to adjust periodicallyself-insurance reserves for workers compensation and general liability claimsand settlements. These estimates are adjusted based upon annual informationreceived in July of each year in connection with policy renewals.  Estimated costs for the following year areaccrued on a monthly basis, and progress against this estimate is re-evaluatedbased upon actual claim data each quarter.

 

F-8

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(4)                                  We use the method of accounting for employeestock options under Accounting Principles Board (APB Opinion 25) and haveadopted the pro forma disclosure provisions of Statement of FinancialAccounting Standards (SFAS No. 123), which require disclosure of the impact ofusing the fair value at date of grant method of recording stock-based employeecompensation.

 

We believe estimates and assumptions related to thesecritical accounting policies are appropriate under the circumstances; however,should future events or occurrences result in unanticipated consequences, therecould be a material impact on our future financial condition or results ofoperations.

 

*NewAccounting Pronouncements*

 

During2002, we adopted the provisions of SFAS No. 142, which eliminates theamortization of all existing and newly acquired goodwill on a prospective basisand requires companies to assess goodwill impairment, at least annually, basedon the fair value of the reporting unit.

 

InDecember 2003, the Financial Accounting Standards Board (FASB) issuedInterpretation No. 46 (revised December 2003), *Consolidation of Variable InterestEntities, an interpretation of ARB No. 51 (FIN 46*).  FIN 46 replaces the earlier version of thisinterpretation issued in January 2003. FIN 46 addresses the consolidation by business enterprises of variableinterest entities as defined. Application of FIN 46 is required in financialstatements of public entities that have interests in variable interest entitiesor potential variable interest entities commonly referred to as special-purposeentities for periods ending after December 15, 2003.  Application of FIN 46 to all other types ofentities is required in financial statements for periods ending afterMarch 15, 2004 with earlier application permitted if the originalinterpretation was previously adopted. We adopted the original interpretation and FIN 46 as ofDecember 31, 2003 which did not have a material effect on the Company’sfinancial statements.

 

InApril 2003, the FASB issued SFAS No. 149, *“Amendment of Statement 133 on DerivativeInstruments and Hedging Activities,”* which is generally effectivefor contracts entered into or modified after June 30, 2003 and for hedgingrelationships designated after June 30, 2003.  SFAS No. 149 clarifies under what circumstances a contract withan initial net investment meets the characteristic of a derivative as discussedin SFAS No. 133, clarifies when a derivative contains a financing component,amends the definition of an “underlying” to conform it to the language used inFASB Interpretation No. 45, *Guarantor Accounting and Disclosure Requirements forGuarantees, Including Indirect Guarantees of Indebtedness of Others*and amends certain other existing pronouncements.  We do not anticipate that the adoption of SFAS No. 149 will havea material impact on our consolidated financial statements.

 

OnMay 15, 2003, the FASB issued SFAS No. 150, *Accounting for**Certain Financial Instruments withCharacteristics of Both Liabilities and Equity*. The Statement requiresissuers to classify as liabilities (or assets in some circumstance) threeclasses of freestanding financial instruments that embody obligations for theissuer.  Generally, the Statement iseffective for financial instruments entered into or modified after May 31, 2003and is otherwise effective at the beginning of the first interim periodbeginning after June 15, 2003. We do not have any outstanding financialinstruments within the scope of the Statement and therefore the adoption ofthis statement on July 1, 2003, did not have a material effect on ourconsolidated financial statements.

 

**2.****                        SIGNIFICANTACCOUNTING POLICIES AND PROCEDURES**

 

Theconsolidated financial statements reflect the application of the followingaccounting policies:

 

*Cash andCash Equivalents*

 

Cashand cash equivalents include funds on hand, short-term money marketinvestments, and certificate of deposit accounts with original maturities of 90days or less.

 

F-9

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*RevenueRecognition*

 

Ourprincipal source of revenue is from customer dining transactions.  Revenue is recognized at the time the mealis paid for by the customer, in the form of cash or credit card.

 

*DeferredGains*

 

Deferredgains on sale-leaseback transactions are accreted to income as a reduction ofrent expense over the related lease terms in accordance with SFAS No. 98,Accounting for Leases.

 

# **CONSIDERATION RECEIVED FROM VENDORS**

#  

InNovember 2003, the Emerging Issues Task Force (EITF) issued EITF Issue03-10, Application of Issue No. 02-16 *by Resellers to Sales Incentives Offered to Consumersby Manufacturers*(EITF 03-10). Sales incentives covered by EITF 03-10 include coupons and other similarinstruments for which the reseller receives a direct reimbursement from thevendor.  Application of EITF 03-10 tonew arrangements, including modifications to existing arrangements, enteredinto in fiscal periods beginning after November 25, 2003 is required.  Application of EITF 03-10 is not expected tohave a material effect on the Company’s financial statements.  * *Inaccordance with Issue No. 02-16, we record vendor rebates as a reduction ofcost of sales when the rebates are received.

 

*Inventories*

 

Inventoriesconsist primarily of food, beverages, and supplies and are stated at the lowerof cost, determined on a first-in, first-out basis (FIFO), or net realizablevalue.

 

*FairMarket Value of Financial Instruments*

 

Thecarrying value of cash equivalents, accounts receivable, other assets, accountspayable, accrued liabilities, and other liabilities approximate fair value dueto the short-term nature of these instruments. The revolving line of credit approximate fair value, as they bearinterest at indexed rates.  Fixed ratelong-term debt is currently at rates similar to current quotations for similardebt.

 

*Propertyand Equipment*

 

Propertyand equipment are stated at cost and depreciated on a straight-line basis overthe estimated useful lives, while leaseholds are amortized over the shorter of20 years or the lease term including option periods, which have economicpenalties, and consist of the following (in thousands):   **START HERE

 
|                                                   |   | **Useful  Lives  (years)** |   | **December 29,  2003** |   | **December 30,  2002** |   |
|--------------------------------------------------------|--------|----------------------------|--------|-----------------------------|--------|-----------------------------|--------|
|                                                   |   |                       |   |                        |   |                        |   |
| Land                                                   |   | —                     |   | $                           | 534    |                        | $      | 534 |   |
| Land held for sale                                     |   | —                     |   | 853                         |   | 1,203                       |   |
| Building and leasehold improvements                    |   | 5-20                       |   | 64,100                      |   | 58,599                      |   |
| Kitchen equipment                                      |   | 5-7                        |   | 23,556                      |   | 22,913                      |   |
| Restaurant equipment                                   |   | 5-10                       |   | 9,210                       |   | 10,183                      |   |
| Smallwares and décor                              |   | 5-10                       |   | 7,932                       |   | 7,677                       |   |
| Office equipment, software, and furniture              |   | 5-7                        |   | 6,660                       |   | 6,445                       |   |
|                                                   |   |                       |   | 112,845                     |   | 107,554                     |   |
|                                                   |   |                       |   |                        |   |                        |   |
| Less:   Accumulated depreciation and amortization |   |                       |   | (44,736                     | )      | (39,854                     | )      |
|                                                   |   |                       |   | 68,109                      |   | 67,700                      |   |
| Construction in progress                               |   |                       |   | 20                          |   | 3,565                       |   |
| Total                                                  |   |                       |   | $                           | 68,129 |                        | $      | 71,265 |   |

 

Depreciationexpense was $8,651,000 for 2003, $8,038,000 for 2002, and $7,912,000 for 2001.

 

F-10

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Constructionin progress (CIP) represents costs incurred by us during the development offuture restaurant sites for fixtures and building improvements.  As a result of lease cancellations of notyet built Bamboo Club locations (Fairfax, Virginia, San Antonio, Texas, andFort Worth, Texas), we wrote off construction in progress costs of $415,000during 2002.

 

*FranchiseFees*

 

Franchisefees represent the value assigned to the franchise agreements in the regionsacquired and to the licenses to operate the restaurants. These agreementsprovide for an initial term of 20 to 30 years, with two renewal terms of 10years each. Franchise area goodwill represents goodwill allocated to thegeographic area for developing TGI Friday’s restaurant purchased, and itqualifies as an intangible asset with a determinable life. These costs arebeing amortized on a straight-line basis over the life of the agreement andconsist of the following (in thousands):

 
|                                  |   | **Amortization  Period  (years)** |   | **December 29,  2003** |   | **December 30,  2002** |   |
|---------------------------------------|--------|-----------------------------------|--------|-----------------------------|--------|-----------------------------|--------|
| Franchise area goodwill               |   | 20                                |   | $                           | 769    |                        | $      | 994 |   |
| Franchise fees and license costs      |   | 20-30                             |   | 3,099                       |   | 3,173                       |   |
| Less:   Accumulated amortization |   |                              |   | (1,177                      | )      | (1,035                      | )      |
| Total                                 |   |                              |   | $                           | 2,691  |                        | $      | 3,132 |   |

 

*Goodwill*

 

Wehave recorded significant goodwill in conjunction with major acquisitions.During 2002, we adopted SFAS No. 142, Goodwill and Other IntangibleAssets.  SFAS 142 eliminates theamortization of all existing and newly acquired goodwill on a prospective basisand requires companies to assess goodwill impairment, at least annually, basedon the fair value of the reporting unit. We no longer amortize goodwill.

 

Asof the date of adoption, January 2002, we had unamortized goodwill of$25,149,000 that was subject to the transition provisions of SFAS Nos.141 and142.  Accumulated amortization relatedto goodwill was $5,914,000 as of the date of adoption.

 

During2002, we wrote off $1,160,000 of allocated goodwill associated with one closedlocation (Kansas City, Missouri) and two impaired locations (Palm Desert,California and Citrus Heights, California). After this goodwill write-off, at December 30, 2002, we performed avaluation in accordance with SFAS No.142 for the purpose of determining theamount of goodwill impairment.  Based onthe results of the valuation, no additional impairment was required.  Additionally, during 2002, we reclassified$994,000 of goodwill to franchise area goodwill, which is classified as an intangibleasset that requires amortization under SFAS No.142.  Franchise area goodwill represents the estimated value we paid toacquire the franchise rights to develop restaurants in certain locations, atthe date of original purchase.  As aresult of these transactions, goodwill was $22,995,000 at the end of 2002.

 

During2003, we wrote off $1,310,000 in allocated goodwill associated with one closedRedfish Grill and Bar (Denver, CO), one closed TGI Friday’s location (sale ofSacramento, CA), one impaired Bamboo Club location (Newport, KY), and one TGIFriday’s location that will close in early 2004 (Salinas, CA).  As a result of these transactions, goodwillwas $21,685,000 at the end of 2003. At December 29, 2003, we performed avaluation in accordance with SFAS No.142 for the purpose of determining theamount of goodwill impairment.  Based onthe results of the valuation, no additional impairment was required.

 
| **Goodwill Allocated to Areas**                       |   | **December 29,  2003** |   | **December 30,  2002** |   |
|-------------------------------------------------------|--------|-----------------------------|--------|-----------------------------|--------|
| Acquisition of California TGI Friday’s           |   | $                           | 9,890  |                        | $      | 10,750 |   |
| Acquisition of Midwest and Arizona TGI  Friday’s |   | 1,495                       |   | 1,495                       |   |
| Acquisition of Redfish                                |   | 300                         |   | 450                         |   |
| Acquisition of Bamboo Club                            |   | 10,000                      |   | 10,300                      |   |
| Total                                                 |   | $                           | 21,685 |                        | $      | 22,995 |   |

 

F-11

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The following table presents reported netloss and loss per share exclusive of goodwill amortization expense for theyears ended December 29, 2003, December 30, 2002, and December 31, 2001 (inthousands except per share amounts):

 
|                                        |   | **2003** |   | **2002** |   | **2001** |   |
|---------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| Reported net income (loss)                  |   | $        | (1,966 | )        | $      | (8,577   | )      | $ | (111 | ) |
| Add back goodwill amortization              |   | —   |   | —   |   | 1,455    |   |
| Adjusted net income (loss)                  |   | $        | (1,966 | )        | $      | (8,577   | )      | $ | $1,344 |   |
|                                        |   |     |   |     |   |     |   |
| Basic Income (loss) Per Share:              |   |     |   |     |   |     |   |
|                                        |   |     |   |     |   |     |   |
| Reported net income (loss) per common share |   | $        | (0.14  | )        | $      | (0.61    | )      | $ | (0.01 | ) |
| Add back goodwill amortization              |   | —   |   | —   |   | 0.11     |   |
| Adjusted net income (loss) per share        |   | $        | (0.14  | )        | $      | (0.61    | )      | $ | 0.10 |   |
|                                        |   |     |   |     |   |     |   |
| Diluted Income (loss) Per Share:            |   |     |   |     |   |     |   |
|                                        |   |     |   |     |   |     |   |
| Reported net income (loss) per common share |   | $        | (0.14  | )        | $      | (0.61    | )      | $ | (0.01 | ) |
| Add back goodwill amortization              |   | —   |   | —   |   | 0.11     |   |
| Adjusted net income (loss) per share        |   | $        | (0.14  | )        | $      | (0.61    | )      | $ | 0.10 |   |

 

*OtherAccrued Liabilities*

 

Otheraccrued liabilities consisted of the following (in thousands):

 
|                           |   | **December 29,  2003** |   | **December 30,  2002** |   |
|--------------------------------|--------|-----------------------------|--------|-----------------------------|--------|
| Accrued payroll                |   | $                           | 4,033  |                        | $      | 3,736 |   |
| Accrued property and sales tax |   | 1,968                       |   | 1,912                       |   |
| Accrued insurance              |   | —                      |   | 1,415                       |   |
| Accrued rent                   |   | 4,199                       |   | 3,142                       |   |
| Gift certificate liability     |   | 1,504                       |   | 1,249                       |   |
| Other accrued liabilities      |   | 4,873                       |   | 4,553                       |   |
| Total                          |   | $                           | 16,577 |                        | $      | 16,007 |   |

 

*IncomeTaxes*

 

Weutilize the asset and liability method of accounting for income taxes.  Under the asset and liability method,deferred taxes are provided based on temporary differences between thefinancial reporting basis and the tax basis of our assets and liabilities,using enacted tax rates in the years in which the differences are expected toreverse.  Deferred tax assets arereviewed periodically for recoverability and valuation allowances are providedas necessary.

 

*Earnings(Loss) Per Share*

 

Basicearnings (loss) per share (“EPS”) is computed by dividing earnings (loss)available to common stockholders by the weighted-average number of sharesoutstanding for the period.  Dilutedearnings (loss) per share reflects the potential dilution that could occur ifsecurities or contracts to issue common stock were exercised or converted tostock or resulted in the issuance of stock that then shared in our earnings orlosses.

 

Theassumed exercise of outstanding stock options and warrants has been excludedfrom the calculations of diluted net loss per share as their effect isanti-dilutive.

 

F-12

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Wehave calculated EPS in accordance with SFAS No. 128, Earnings Per Share. Thefollowing table sets forth basic and diluted EPS computations for the yearsended December 29, 2003, December 30, 2002, and December 31,2001 (in thousands, except per share amounts):

 
|                                     |   | **2003**     |   | **2002**   |   | **2001**               |   |
|------------------------------------------|--------|--------------|--------|------------|--------|------------------------|--------|
|                                     |   | **Net Loss** |   | **Shares** |   | **Per  Share  Amount** |   | **Net  Income** |   | **Shares** |   | **Per  Share  Amount** |   | **Net  Income** |   | **Shares** |   | **Per  Share  Amount** |   |
|                                     |   |         |   |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic EPS                                |   | $            | (1,966 | )          | 14,179 |                   | $      | (0.14 | ) | $ | (8,577 | ) | 14,105 |   | $ | (0.61 | ) | $ | (111 | ) | 14,048 |   | $ | (0.01 | ) |
| Effect of stock options and warrants     |   | —       |   | 1          |   | —                 |   | — |   | 594 |   | — |   | — |   | 533 |   | — |   |
| Anti-dilutive stock options and warrants |   | —       |   | (1         | )      | —                 |   | — |   | (594 | ) | — |   | — |   | (533 | ) | — |   |
| Diluted EPS                              |   | $            | (1,966 | )          | 14,179 |                   | $      | (0.14 | ) | $ | (8,577 | ) | 14,105 |   | $ | (0.61 | ) | $ | (111 | ) | 14,048 |   | $ | (0.01 | ) |

 

*SegmentReporting*

 

Wehave three operating segments that are managed based on our restaurantconcepts, TGI Friday’s, Bamboo Club, Redfish, and Alice Cooper’stown. SFAS No.131 allows for aggregation of similar operating segments into a singlereportable operating segment if the components are considered similar undercertain criteria.  As a result of theforegoing, we believe that our restaurants meet the criteria supportingaggregation of all restaurants into one reporting unit.  Accordingly, we have not presented separatefinancial information for each of our operating segments, as our consolidatedfinancial statements present our one reporting unit.

 

*Stock-BasedCompensation Plans*

 

SFASNo.123, *Accountingfor Stock-Based Compensation*, was issued by the FASB in 1995 and, iffully adopted, changed the methods for recognition of cost on plans similar tothose of our company.  Adoption of SFASNo. 123 was optional; however, pro forma disclosures as if we had adopted thecost recognition method are required. Had compensation cost for stock options awarded under these plans beendetermined consistent with SFAS No. 123, our net income (loss) and EPS wouldhave reflected the following pro forma amounts:

 
|                          |   | **December 29,  2003**                   |   | **December 30,  2002** |   | **December 31,  2001** |   |
|-------------------------------|--------|-----------------------------------------------|--------|-----------------------------|--------|-----------------------------|--------|
|                          |   | **(In Thousands,  Except Per Share Amounts)** |   |
| Net Income (loss):            |   |                                          |   |                        |   |                        |   |
|                          |   |                                          |   |                        |   |                        |   |
| As Reported                   |   | $                                             | (1,966 | )                           | $      | (8,577                      | )      | $ | (111 | ) |
| Compensation Expense          |   | $                                             | (944   | )                           | $      | (1,047                      | )      | $ | (850 | ) |
| Pro Forma                     |   | $                                             | (2,910 | )                           | $      | (9,624                      | )      | $ | (961 | ) |
|                          |   |                                          |   |                        |   |                        |   |
| Earnings (loss) per share:    |   |                                          |   |                        |   |                        |   |
|                          |   |                                          |   |                        |   |                        |   |
| Shares                        |   | 14,179                                        |   | 14,105                      |   | 14,048                      |   |
| As Reported-basic and diluted |   | $                                             | (0.14  | )                           | $      | (0.61                       | )      | $ | (0.01 | ) |
| Pro Forma-basic and diluted   |   | $                                             | (0.21  | )                           | $      | (0.68                       | )      | $ | (0.07 | ) |

 

Theweighted average fair value at the date of grant for options granted duringfiscal 2003, 2002, and 2001 were estimated using the Black-Scholes optionpricing model with the following assumptions: weighted average risk-freeinterest rate of 3.00%, 2.73%, and 5.22%, respectively; weighted averagevolatility of 65.6%, 53.7%, and

 

F-13

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50.0%,respectively; average life of the option of three years, four and four years,respectively; and weighted average dividend yield of 0.0% in all years.

 

Detailsregarding the options outstanding as of December 29, 2003 are as follows:

 
|                        |   | **Outstanding**        |   | **Exercisable**                                     |   |
|-----------------------------|--------|------------------------|--------|-----------------------------------------------------|--------|
| **Range of Exercise Price** |   | **Number of   Shares** |   | **Weighted  Average  Remaining  Contractual  Life** |   | **Weighted  Average  Exercise  Price** |   | **Number of  Shares** |   | **Weighted  Average  Exercise  Price** |   |
| $1.67 - $2.75               |   | 1,652,000              |   | 5.53 years                                          |   | $ | 2.24 |   | 1,039,000 |   | $ | 2.29 |   |
| $3.00 - $3.65               |   | 1,550,004              |   | 5.72 years                                          |   | $ | 3.34 |   | 1,447,337 |   | $ | 3.32 |   |
| $4.00 - $6.01               |   | 655,750                |   | 6.82 years                                          |   | $ | 4.74 |   | 341,917 |   | $ | 4.77 |   |
| Total                       |   | 3,857,754              |   |                                                |   |   |   | 2,828,254 |   |   |   |

 

*DerivativeFinancial Instruments*

 

Wehave only limited involvement with derivative financial instruments and do notuse them for trading purposes.  Weutilize an interest rate swap agreement to hedge the effects of fluctuations ininterest rates related to one of our long-term debt instruments.  The interest rate swap agreement meets thecriteria for cash flow hedge accounting. Amounts receivable or payable due to settlement of the interest rateswap agreement are recognized as interest expense on a monthly basis.  A mark-to-market adjustment is recorded as acomponent of stockholders’ equity, net of taxes, to reflect the fair value ofthe interest rate swap agreement.  Wediscontinue hedge accounting prospectively if it is determined that thederivative is no longer effective.

 

Inconjunction with the Bank of America development facility, we have an interestrate swap agreement with Bank of America, which fixes our base interest rate at6.26% per annum on a notional amount of $12,500,000 from July 2002 throughJune 2014.  The swap qualifies as acash flow hedge in accordance with SFAS No. 133. On a periodic basis, we adjustthe fair market value of the swap on the balance sheet and offset the amount ofthe change to other comprehensive income (loss).  As of December 29, 2003 and December 30, 2002, the fairvalue of the hedge resulted in a liability of $1,471,893, and $1,884,919respectively

 

Wealso have an interest rate swap agreement with Bank of America on a note heldby CNL Funding with a remaining unpaid balance of $5,516,000.  The interest rate on the note, 9.457%, isthe same as the interest rate to be received under the interest rate swapagreement.   The swap effectively floatsthe 9.457% note to a 30-day LIBOR base plus a spread of 4.34% on a notionalamount of $5,516,000. On a quarterly basis, we adjust the fair market value ofthe swap on the balance sheet and offset the amount of the change to othercomprehensive income (loss).  As ofDecember 29, 2003 and December 30, 2002, the fair value of the hedgeresulted in an asset of $330,582 and $450,114, respectively.

 

Wealso have an additional interest rate swap agreement with Bank of America.  This swap agreement effectively fixes ourinterest rate at 5.65% per annum (plus credit spread) on a notional amount of$10,700,000 from May 2002 through May 2012. The swap qualifies as a cash flow hedge in accordance with SFAS No. 133.On a periodic basis, we adjust the fair market value of the swap on the balancesheet and offset the amount of the change to other comprehensive income(loss).  As of December 29, 2003and December 30, 2002, the fair value of the hedge resulted in a liabilityof $911,798 and $1,203,299, respectively.

 

F-14

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| **Comprehensive Income (Loss)**                                                                                           |   | **December 29,  2003** |   | **December 30,  2002** |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|-----------------------------|--------|
|                                                                                                                      |   |                        |   |                        |   |
| Net Income (loss)                                                                                                         |   | $                           | (1,966 | )                           | $      | (8,577 | ) |
| Other comprehensive income (loss), for the  periods ended December 29, 2003 and December 30, 2002, respectively |   | 451                         |   | (2,302                      | )      |
| Comprehensive income (loss)                                                                                               |   | $                           | (1,515 | )                           | $      | (10,879 | ) |

 

*Reclassifications*

 

Certainprior year amounts have been reclassified to conform to the current yearpresentation.  Effective January 1,2003, we began charging the costs of training new managers related to thereplacement of existing managers to the payroll and benefits account.  In previous years, this expense was includedin the new manager training account. The reclassifications made during 2002 and2001 were approximately $1,394,000 and $1,349,000, respectively.

 

*Accountingfor Long-Lived Assets and Impairment Charges*

 

Long-livedassets are reviewed for impairment whenever events or circumstances indicatethat the carrying amount of the asset may not be recoverable.  If the sum of the expected future cash flows(undiscounted and without interest charges) from an asset to be held and usedin operations is less than the carrying value of the asset, an impairment lossmust be recognized in the amount of the difference between the carrying valueand the fair value of the assets.

 

Wehave a policy of reviewing the financial operations of our restaurant locationson at least a quarterly basis. Locations that are not meeting expectations are identified and continueto be monitored closely throughout the year. Primarily in the fourth quarter, we review actual results and budgetsfor the ensuing year are analyzed.  Ifwe deem that a location’s results will continue to be below expectations, weconsider alternatives for its continued operation.  At that time, we perform asset impairment testing.  If it is determined that the fair value ofan asset is greater than its carrying value, an impairment charge isrecorded.  Upon a triggering event suchas a formal decision for abandonment (restaurant closure), we may recordadditional impairment of assets, including an allocation of goodwill. Anycarryover basis of assets is depreciated over the respective remaining usefullives.

 

Fairvalue of assets is determined primarily on the likelihood of future use of theassets through operations or by the value that could be received for the assetif sold.

 

Othercharges include write-offs of allocated goodwill, severance costs, lease andcontract termination fees, professional service costs, and settlement oflitigation. During fiscal years ended 2003, 2002, and 2001, we recorded assetimpairment charges and other as follows (in thousands):

 
|                                                          |   | **December 29,  2003** |   | **December 30,  2002** |   | **December 31,  2001** |   |
|---------------------------------------------------------------|--------|-----------------------------|--------|-----------------------------|--------|-----------------------------|--------|
|                                                          |   |                        |   |                        |   |                        |   |
| Long-lived asset impairments and other                        |   | $                           | 3,051  |                        | $      | 4,323                       |   | $ | 1,838 |   |
| Write-off of goodwill allocated to closed  or impaired stores |   | 905                         |   | 1,160                       |   | —                      |   |
| Provision for Severance                                       |   | 300                         |   |                        |   |                        |   |
| Lease cancellation charges                                    |   | 500                         |   | 2,060                       |   | —                      |   |
| Impairment of receivables (Mngmt.  Agreement)                 |   | 800                         |   | —                      |   | 1,615                       |   |
| Write-down of land (El Paso, Texas)                           |   | 350                         |   | 400                         |   | —                      |   |
| Total impairment charges and other                            |   | $                           | 5,906  |                        | $      | 7,943                       |   | $ | 3,453 |   |

 

Thelong-lived asset impairment amount in the table above represents the net bookvalue of the fixed assets which will not be recovered through regularoperations, computed on a discounted cash flow basis.  The amount in

 

F-15

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2003is attributable primarily of impairment of two Bamboo Club locations and theclosure of one Redfish location.  Theamount in 2002 is attributable primarily of impairments related to six TGIFriday’s locations; three not yet built Bamboo Club locations; and one Redfishlocation.  The amount in 2001 isprimarily attributable to the impairment of assets at four TGI Friday’slocations, and two Redfish locations.

 

*ValuationReserves*

 

Valuationreserves for the years ended December 29, 2003, December 30, 2002,and December 31, 2001, consist of the following:

 
|                                      |   | **Balance at  Beginning of  Period** |      | **Expense  Recorded** |   | **Payments  Made** |   | **Balance at  End of   Period** |        |
|-------------------------------------------|--------|--------------------------------------|-----------|-----------------------|--------|--------------------|--------|---------------------------------|-------------|
| Reserve for legal settlement losses:      |   |                                 |      |                  |   |               |   |                            |        |
| Year ended December 29, 2003         |   | $                                    | —    |                  | $      | —             |   | $                               | —      |   | $ | — |   |
| Year ended December 30, 2002         |   | $                                    | 34,000    |                  | $      | (30,000            | )      | $                               | (4,000      | ) | $ | — |   |
| Year ended December 31, 2001         |   | $                                    | 149,000   |                  | — |               | $      | (115,000                        | )           | $ | 34,000 |   |
|                                      |   |                                 |      |                  |   |               |   |                            |        |
| Insurance and claims reserves (prepaids): |   |                                 |      |                  |   |               |   |                            |        |
| Year ended December 29, 2003         |   | $                                    | 1,415,300 |                  | $      | 6,694,400          |   | $                               | (8,182,808  | ) | $ | (73,108 | ) |
| Year ended December 30, 2002         |   | $                                    | 2,616,300 |                  | $      | 9,629,935          |   | $                               | (10,830,935 | ) | $ | 1,415,300 |   |
| Year ended December 31, 2001         |   | $                                    | 1,668,700 |                  | $      | 5,258,539          |   | $                               | (4,310,939  | ) | $ | 2,616,300 |   |

 

**3.****                        INCOMETAXES**

 

Incometax expense (benefit) consists of the following (in thousands):

 
|                               |   | **Current** |   | **Deferred** |   | **Total** |   |
|------------------------------------|--------|-------------|--------|--------------|--------|-----------|--------|
| Year ended December 29, 2003: |   |        |   |         |   |      |   |
| U.S. Federal                       |   | $           | — |         | $      | —    |   | $ | — |   |
| State and local                    |   | —      |   | —       |   | —    |   |
|                               |   | $           | — |         | $      | —    |   | $ | — |   |
| Year ended December 30, 2002: |   |        |   |         |   |      |   |
| U.S. Federal                       |   | $           | (341   | )            | $      | 1,536     |   | $ | 1,195 |   |
| State and local                    |   | —      |   | 114          |   | 114       |   |
|                               |   | $           | (341   | )            | $      | 1,650     |   | $ | 1,309 |   |
| Year ended December 31, 2001: |   |        |   |         |   |      |   |
| U.S. Federal                       |   | $           | 228    |         | $      | (913      | )      | $ | (685 | ) |
| State and local                    |   | 175         |   | (135         | )      | 40        |   |
|                               |   | $           | 403    |         | $      | (1,048    | )      | $ | (645 | ) |

 

Deferredincome taxes arise due to differences in the treatment of income and expenseitems for financial reporting and income tax purposes.  In the current year, we generated a netoperating loss.  The effect of temporarydifferences and carryforwards that gave rise to deferred tax balances atDecember 29, 2003 and December 30, 2002, were as follows (inthousands):

 

F-16

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| **Net Deferred Tax Assets/(Liabilities)**                |   | **December 29,  2003** |   | **December 30,  2002** |   |
|----------------------------------------------------------|--------|-----------------------------|--------|-----------------------------|--------|
|                                                     |   | **(In  Thousands)**         |   |
| Temporary differences:                                   |   |                        |   |                        |   |
| Basis differences in investments                         |   | $                           | 558    |                        | $      | 366 |   |
| Basis differences in depreciable and  amortizable assets |   | (4,709                      | )      | (4,942                      | )      |
| Provision for estimated expenses                         |   | 1,986                       |   | 3,403                       |   |
| Revenue recognition                                      |   | 36                          |   | 50                          |   |
| Interest rate swap                                       |   | 821                         |   | 921                         |   |
|                                                     |   |                        |   |                        |   |
| Tax carryforwards:                                       |   |                        |   |                        |   |
| General business and AMT credits                         |   | 5,791                       |   | 5,791                       |   |
| Charitable Contribution                                  |   | 7                           |   | —                      |   |
| Net operating loss and capital loss  carryforwards       |   | 5,471                       |   | 3,621                       |   |
| Valuation reserve                                        |   | (9,961                      | )      | (9,210                      | )      |
| Total                                                    |   | $                           | — |                        | $      | — |   |

 

AtDecember 29, 2003, we had approximately $13,988,000 federal net operatingand tax credit carryforwards to be used to offset future income for federalincome tax purposes.  Thesecarryforwards expire in the years 2004 to 2021. The net change in the totalvaluation allowance for the year ended December 29, 2003 andDecember 30, 2002, is the result of providing a full valuation allowanceagainst all deferred tax assets because of the significant loss in 2002 and2003.

 

Webelieve that our ability to utilize our net operating loss carryforwards andcertain of our general business and AMT credits to offset future taxable incomewithin the carryforward periods under existing tax laws and regulations issubject to future profitability. However, because we have suffered significant net losses in the lastthree years, we have concluded that a 100% valuation allowance against our netdeferred tax assets continues to be warranted.   Reconciliations of the federal income tax rate to our effectivetax rate were as follows:

 
|                                |   | **December 29,  2003** |   | **December 30,  2002** |   | **December 31,  2001** |   |
|-------------------------------------|--------|-----------------------------|--------|-----------------------------|--------|-----------------------------|--------|
| Statutory federal rate              |   | (34.0                       | )%     | (34.0                       | )%     | (34.0                       | )%     |
| State taxes, net of federal benefit |   | —                      |   | 1.3                         |   | 51.4                        |   |
| Nondeductible expenses              |   | 0.66                        |   | 0.23                        |   | 4.4                         |   |
| Expiration of capital loss          |   | —                      |   | 13.3                        |   | —                      |   |
| Change in valuation allowance       |   | 33.34                       |   | 37.17                       |   | (107.1                      | )      |
|                                |   | 0.0                         | %      | 18.0                        | %      | (85.3                       | )%     |

 

AtDecember 29, 2003 and December 30, 2002, $384,000 and $1,216,000,respectively, of estimated income tax payments are included in prepaidexpenses.

 

**4.****                        LINE OFCREDIT**

 

During2003, we entered into a $2.5 million, one-year revolving line of credit with abank.  At December 29, 2003, $7,000was outstanding on this line.

 

F-17

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**5.****                        LONG-TERMDEBT**

 

Long-termdebt consists of the following (in thousands):

 
|                                                                     |   | **Maturity  Dates** |   | **Interest  Rates  as of  December 29,  2003** |   | **Annual  Principal  Payments** |   | **December 29,  2003** |   | **December 30,  2002** |   |
|--------------------------------------------------------------------------|--------|---------------------|--------|-----------------------------------------------------|--------|---------------------------------|--------|-----------------------------|--------|-----------------------------|--------|
| CNL Term Loan II, secured by assets of 16  TGI Friday’s Restaurants |   | 2012-2013           |   | 9.457                                               | %      | $                               | 1,200  |                        | $      | 14,375                      |   | $ | 16,535 |   |
| Bank of America                                                          |   | 2013                |   | 3.75                                                | %      | 900                             |   | 16,046                      |   | 15,738                      |   |
| Merrill Lynch                                                            |   | 2007-15             |   | 3.96                                                | %      | 470                             |   | 5,029                       |   | 5,485                       |   |
| FFCA                                                                     |   | 2002-16             |   | 10.5                                                | %      | 32                              |   | —                      |   | 32                          |   |
| GE Capital                                                               |   | 2002-14             |   | 4.81                                                | %      | 1,000                           |   | 12,792                      |   | 2,774                       |   |
| GMAC                                                                     |   | 2010-15             |   | 10.56                                               | %      | 253                             |   | 3,442                       |   | 14,936                      |   |
| Total                                                                    |   |                |   |                                                |   | $                               | 3,823  |                        | 51,684 |                        | 55,500 |   |
| Less current portion                                                     |   |                |   |                                                |   |                            |   | (3,815                      | )      | (3,502                      | )      |
| Total                                                                    |   |                |   |                                                |   |                            |   | $                           | 47,869 |                        | $      | 51,998 |   |

 

We have a $15 million financing commitmentthrough GE Franchise Finance.  The termsinclude $6 million for financing of equipment and leasehold improvements forthe seven Bamboo Clubs already open and approximately $9 million for new BambooClub development.  At December 29, 2003,there were no borrowings outstanding under this commitment.

 

In July 2002, we amended our Bank of Americadevelopment facility to provide for an additional $1,000,000 in financing.  During 2002, we borrowed an additional$9,465,000 to fund construction on two locations (TGI Friday’s San Tan,Chandler, Arizona and Porter Ranch, California) and to refinance two existinglocations (TGI Friday’s Cerritos, California and Oxnard, California) for whichwe paid off higher rate debt.  BySeptember 30, 2002, we had fully utilized our development facility with Bank ofAmerica.

Allof our loan agreements contain various financial covenants that are generallymeasured at the end of each calendar quarter. There are two key covenants we must meet.  One loan agreement requires a cash flow coverage test, whichrequires us to produce a level of earnings before interest, taxes,depreciation, and amortization and other unusual gains or losses (EBITDA) inexcess of the next 12 months amount of the principal and interest under our debtobligations.  Other loan agreementsmodify this covenant for items such as pre-opening costs and rent expense,making it more of a fixed charge coverage test.

 

Anothercovenant restricts the aggregate amount of total senior debt we can have to amultiple of EBITDA.

 

AtDecember 29, 2003, we met all of the financial covenants, as amended, forall debt agreements.  All long-term debtis secured by certain assets of various restaurant locations.

 

Maturitiesof long-term debt, giving effect to the borrowings discussed above, were asfollows at December 29, 2003 (in thousands):

 

| 2003       |   | $      | 3,815  |   |
|------------|--------|--------|--------|--------|
| 2004       |   | 4,190  |   |
| 2005       |   | 4,416  |   |
| 2006       |   | 4,762  |   |
| 2007       |   | 4,991  |   |
| Thereafter |   | 29,510 |   |
| Total      |   | $      | 51,684 |   |

 

F-18

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**6.****                        STOCKHOLDERS’EQUITY**

 

*StockOptions*

 

Wehave an Incentive Stock Option Plan (the “2002 Plan”) that provides for theissuance of options to acquire up to 1,000,000 shares of our common stock.  The options are intended to qualify asincentive stock options within the meaning of Section 422A of the InternalRevenue Code or as options which are not intended to meet the requirements ofsuch section (“non-qualified stock options”).  Awards granted under the 2002 Plan also may include stock appreciationrights and restricted stock awards.

 

Theexercise price of all incentive stock options granted under the 2002 Plan mustbe at least equal to the fair market value of such shares as of the date ofgrant or, in the case of incentive stock options granted to the holder of 10% ormore of the our common stock, at least 110% of the fair market value of suchshares on the date of grant.  The planadministrator (currently the Board of Directors) sets the term of each stockoption, but no incentive stock option may be exercisable more than 10 yearsafter the date such option is granted. We also have granted options under the 1990, 1995, and 1999 IncentiveStock option Plans, all of which contain similar terms to the 2002 IncentiveStock Option Plan.

 

OnJune 17, 2003, we issued approximately 291,250 options to directors,management, and key employees with an exercise price of $2.17 per share, thefair market value of our common stock on the date of grant.

 

Weare also authorized to issue or have outstanding options under all of our unexpiredstock option plans.  In addition, ourBoard of Directors approved the issuance of 50,000 non-statutory stock optionsto one of our officers during 2000 and 150,000 non-statutory stock options toone of our officers in 2001.

 

Asummary of the status of our stock option plans at December 29, 2003,December 30, 2002, and December 31, 2001 and changes during the yearsthen ended is presented in the table and narrative below:

 
|                                            |   | **2003**   |   | **2002**             |   | **2001**   |      |
|-------------------------------------------------|--------|------------|--------|----------------------|--------|------------|-----------|
|                                            |   | **Shares** |   | **Wtd. Avg.  Price** |   | **Shares** |      | **Wtd. Avg.  Price** |   | **Shares** |   | **Wtd. Avg.  Price** |   |
| Options outstanding at beginning of period      |   | 3,487,420  |   | $                    | 3.30   |       | 3,234,497 |   | $ | 3.14 |   | 2,733,000 |   | $ | 3.05 |   |
| Granted                                         |   | 630,250    |   | 2.15                 |   | 444,250    |      | 2.87 |   | 644,000 |   | 3.79 |   |
| Exercised                                       |   | —     |   | —               |   | (117,664   | )         | 3.26 |   | (6,999 | ) | 3.02 |   |
| Cancelled                                       |   | (259,916   | )      | 3.64                 |   | (73,663    | )         | 3.43 |   | (135,504 | ) | 3.47 |   |
| Options outstanding at end of period            |   | 3,857,754  |   | 3.10                 |   | 3,487,420  |      | 3.30 |   | 3,234,497 |   | 3.14 |   |
|                                            |   |       |   |                 |   |       |      |   |   |   |   |   |   |
| Exercisable at end of period                    |   | 2,828,254  |   | 3.12                 |   | 2,624,780  |      | 3.03 |   | 2,112,332 |   | 2.96 |   |
| Weighted average fair value of options  granted |   |       |   | $                    | 1.50   |       |      |   | $ | 3.04 |   |   |   | $ | 2.56 |   |

 

*CommonStock Warrants*

 

Asof December 29, 2003 and December 30, 2002, we had 231,277outstanding warrants to acquire our common stock with our lenders in connectionwith the issuances of previously paid- off debt.  The warrants are exercisable at $9.08 per share and expire inMarch 2004.

 

**7.****                        COMMITMENTSAND CONTINGENCIES**

 

*DevelopmentAgreements*

 

Weare obligated under separate development agreements with TGI Friday’s Inc. toopen 16 new TGI Friday’s restaurants through 2009.  The development agreements give TGI Friday’s Inc. certainremedies in the event

 

F-19

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wefail to timely comply with the development agreements, including the right,under certain circumstances, to terminate our exclusive rights to developrestaurants in the related franchised territory.  Our development territories include most of Arizona, Nevada, NewMexico, Southern California, and the El Paso metropolitan areas.  We currently are negotiating for one new TGIFriday’s restaurant site and do not anticipate building any additional TGIFriday’s during 2004.

 

*Franchise,License, and Marketing Agreements*

 

Inaccordance with the terms of the TGI Friday’s restaurant franchise agreements,we are required to pay franchise fees of $50,000 for each restaurantopened.  We also are required to pay aroyalty of up to 4% of gross sales.  Royaltyexpense was approximately $7,510,000, $7,476,000, and $7,444,000 under theseagreements during 2003, 2002, and 2001, respectively.  In addition, we could be required to spend up to 4% of grosssales on marketing.  Marketing expensefor TGI Friday’s restaurant locations under these agreements was approximately$6,195,000, $5,250,000, and $4,772,000 during 2003, 2002, and 2001,respectively.

 

*OperatingLeases*

 

Welease land and restaurant facilities under operating leases having termsexpiring at various dates through January 2020.  The restaurant leases have from two to three renewal clauses offive years each at our option, and have provisions for contingent rentals basedupon a percentage of gross sales.  Ourminimum future lease payments as of December 29, 2003, were as follows (inthousands):

 

| 2004       |   | $      | 12,019  |   |
|------------|--------|--------|---------|--------|
| 2005       |   | 11,891 |    |
| 2006       |   | 11,493 |    |
| 2007       |   | 11,043 |    |
| 2008       |   | 10,797 |    |
| Thereafter |   | 74,331 |    |
| Total      |   | $      | 131,574 |   |

 

Rentexpense during 2003, 2002, and 2001 was approximately $12.4 million, $11.9million, and $10.8 million, respectively. In addition, we paid contingent rentals of $958,000, $1,061,000, and$1,060,000 during 2003, 2002, and 2001, respectively.  The difference between rent expense and rent paid due torecording expenses on the straight-line method is included in other liabilitiesand deferred credits in the accompanying consolidated balance sheets.

 

*Contingencies*

 

Inthe normal course of business, we are named as a defendant in various claimsand litigation matters.  From time to time, we are subject to routinecontract, negligence, employment related, and other litigation in the ordinarycourse of business.  InJanuary 2002, we were served with a lawsuit filed on behalf of a currentemployee, seeking damages, under California law, for both missed breaks andmissed meal breaks the employee alleges she did not receive. This lawsuit seeks to establish a class action relating toour California operations. We intend to vigorously defend this lawsuit, both onthe merits of the employee’s case and the issues relating to class actionstatus.  Other than the preceding, weare not subject to any pending litigation that we believe will have a materialadverse effect on our business or financial condition, results of operations,or liquidity.

 

The state of California initiated a sales tax audit ofour restaurants and determined that the optional 15% gratuity added to checksfor parties of eight or more should have been subject to sales tax and as suchhas assessed taxes and related penalties of approximately $900,000.  We have vigorously contested thisassessment. The first of various appeal conferences was held onNovember 13, 2003.  InFebruary 2004, we were notified that our appeal was denied by the appealsofficer.  We are in the process ofpreparing a second appeal to the full state of California Franchise Tax Board.We are unable to predict the outcome of this proceeding and have provided noamounts for this contingency.

 

F-20

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Weare also subject, from time to time, to audit by various taxing authoritiesreviewing our income, property, sales, use, and payroll taxes.  We believe that any finding from such auditswill not have a material impact on our financial position, results ofoperations, or liquidity.

 

**8.****                        BENEFITPLANS**

 

Wemaintain a 401(k) Savings Plan for all of our employees.  We currently match 50% of the participants’contributions for the first 4% of the participants’ compensation.  Contributions made by us were approximately$235,000, $257,000, and $248,000 during 2003, 2002, and 2001, respectively.

 

F-21

----

 

**EXHIBITINDEX**

 
| **Exhibit  Number** |   | **Exhibit**                                                                                                                                                                 |
|---------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                                                        |
| 31.1                |   | Certification of President and Chief Executive Officer  pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the  Securities Exchange Act of 1934, as amended   |
| 31.2                |   | Certification of the Chief Financial Officer pursuant  to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities  Exchange Act of 1934, as amended             |
| 32.1                |   | Certification of President and Chief Executive Officer  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002 |
| 32.2                |   | Certification of the Chief Financial Officer pursuant  to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of  the Sarbanes-Oxley Act of 2002           |

 

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