<PAGE>

                                      FORM 10-K
                          SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549

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

     For Fiscal Year Ended January 25, 1998

OR

/ /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
                             Commission File No. 0-12145

                            AMARILLO MESQUITE GRILL, INC.
                      (formerly Maverick Restaurant Corporation)
                (Exact name of Registrant as specified in its charter)

       Kansas                                            48-0936946
(State of Incorporation)                    (IRS Employer Identification No.)

                            302 North Rock Road, Suite 200
                                Wichita, Kansas  67206
                  (Principal executive offices, including zip code)

         Registrant's telephone number including area code:  (316) 685-7286
          Securities Registered Pursuant to Section 12(b) of the Act: None
            Securities Registered Pursuant to Section 12(g) of the Act: 
                             Common Stock $0.01 Par Value

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

                               Yes  X     No
                                   ---       ---

Insert by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /

As of April 1, 1998, 7,573,895 common shares (not including 60,000 shares 
held as treasury stock) were outstanding, and the aggregate market value of 
the common shares (based upon the closing price of these shares ($3.875) as 
of such date on the OTC Bulletin Board) of AMARILLO MESQUITE GRILL, INC. held 
by non-affiliates was approximately $11,222,709 (For purposes of this 
valuation "affiliates" are the officers, directors and 5% shareholders of the 
Company.)

                         DOCUMENTS INCORPORATED BY REFERENCE:

              Proxy Statement for the fiscal year ended January 25, 1998
                        (Items 10, 11, 12 and 13 of PART III)


<PAGE>

                            AMARILLO MESQUITE GRILL, INC.


                              Annual Report on Form 10-K
                      For the Fiscal Year Ended January 25, 1998


<TABLE>
<CAPTION>

PART I.                                                                          PAGE
                                                                                 ----
<S>                                                                              <C>

Item 1.   Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
Item 2.   Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5
Item 3.   Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . .  6
Item 4.   Submission of Matters to a Vote of Security Holders. . . . . . . . . . .  6

PART II.

Item 5.   Market for Registrant's Common Equity and Related
            Stockholder Matters. . . . . . . . . . . . . . . . . . . . . . . . . .  7
Item 6.   Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . .  8
Item 7.   Management's Discussion and Analysis of Financial
            Condition and Results of Operations. . . . . . . . . . . . . . . . . .  9
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk . . . . . . . 13
Item 8.   Financial Statements and Supplementary Data. . . . . . . . . . . . . . . 13
Item 9.   Changes in and Disagreements with Accountants on
            Accounting and Financial Disclosure. . . . . . . . . . . . . . . . . . 13

PART III.

Item 10.  Directors and Executive Officers of the Registrant . . . . . . . . . . . 13
Item 11.  Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 13
Item 12.  Security Ownership of Certain Beneficial Owners and
            Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Item 13.  Certain Relationships and Related Transactions . . . . . . . . . . . . . 13

PART IV.

Item 14.  Exhibits, Financial Statement Schedules and Reports
            on Form 8-K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-1
</TABLE>

<PAGE>

                                        PART I


ITEM 1.   BUSINESS

     A)   GENERAL DEVELOPMENT OF BUSINESS.

          AMARILLO MESQUITE GRILL, INC. (the "Company) operates twelve Amarillo
          Mesquite Grill restaurants in Kansas, Oklahoma, Missouri and Arkansas.
          The Company also operates one Cotton Patch Cafe restaurant located in
          Oklahoma pursuant to a franchise agreement with Cotton Patch Cafe,
          Inc.  The Company intends to focus its business activities on the
          development of additional Amarillo Mesquite Grill restaurants.

          On June 17, 1996, the Company acquired the assets of the Amarillo
          Mesquite Grill restaurant chain from Homestead West, Inc. and Amagril,
          Inc. for 1,000,000 shares of the Company's restricted common stock and
          cash in the amount of $1,500,000.  The Amarillo Mesquite Grill
          restaurant chain consisted of four restaurants at the date of
          purchase: two located in Wichita, Kansas, one located in Hutchinson,
          Kansas and one located in Overland Park, Kansas.  Since the date of
          this acquisition, the Company has converted five of its Cotton Patch
          Cafe restaurants to Amarillo Mesquite Grill restaurants, converted two
          other buildings to Amarillo Mesquite Grill restaurants and constructed
          a prototype Amarillo Mesquite Grill restaurant.

          The Company has also determined that it is in its best interests to
          focus on the development of the Amarillo Mesquite Grill restaurants. 
          Therefore, on March 24, 1997 it sold its remaining eight Grandy's
          restaurants to Red Apple Corporation for the purchase price of
          $435,000.

     B)   FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.

          Not Applicable

                                      -1-
<PAGE>

     C)   NARRATIVE DESCRIPTION OF BUSINESS.

          i)   PRINCIPAL PRODUCTS AND SERVICES.

               AMARILLO MESQUITE GRILL.  Amarillo Mesquite Grill restaurants are
               open for lunch and dinner.  Amarillo Mesquite Grill is a
               moderately priced casual dining restaurant that specializes in
               aged prime rib and steaks, along with barbecued ribs, chicken and
               seafood, all uniquely grilled over an open flame of mesquite
               wood.  Appetizers and desserts, as well as a children's menu with
               lower-priced selections, are also available.

               The Amarillo Mesquite Grill concept is designed to appeal to a
               broad spectrum of casual dining customers who are seeking a
               consistent and high-quality dining experience attentively served
               in a distinctive, relaxed atmosphere for a moderate price. 
               Amarillo Mesquite Grill provides a casual and comfortable
               environment and well-trained, enthusiastic service to its
               customers.

               The Company believes that the Amarillo Mesquite Grill restaurant
               concept and menu are designed to attract loyal clientele who
               return with a high degree of frequency at both lunch and dinner.
               The decor of the Company's restaurants features a variety of
               western and country artifacts, giving it a relaxed friendly feel.
               Amarillo Mesquite Grill is further distinguished by requiring
               from its meat purveyors high-quality, USDA choice or better
               graded steaks, many of which are hand-cut fresh daily on site. 
               High-quality ingredients are used for all menu items.  All meals
               are served in generous portions by a well-trained friendly staff.

               The Amarillo Mesquite Grill restaurant is a free-standing
               building.  The Company owns the furniture, fixtures and equipment
               used in its restaurants.  Each restaurant serves alcoholic
               beverages and features a bar area located adjacent to the dining
               room primarily to accommodate customers waiting for tables.

               The average cost of a meal at the Company's Amarillo Mesquite
               Grill restaurant is approximately $7.00 for lunch and $13.00 for
               dinner.  Alcoholic beverage service accounts for approximately 8%
               of the Company's net sales at each restaurant.  The Company's
               restaurants are open seven days a week.

               The following table sets forth the location and opening or
               acquisition date of the Company's Amarillo Mesquite Grill
               restaurants currently in operation:

                                      -2-

<PAGE>

<TABLE>
<CAPTION>

                                                  DATE OPENED
               LOCATION                           OR PURCHASED
               --------                           ------------
               <S>                                <C>
               Wichita, Kansas #1                 June 17, 1996
               Wichita, Kansas #2                 June 17, 1996
               Hutchinson, Kansas                 June 17, 1996
               Overland Park, Kansas              June 17, 1996
               Ponca City, Oklahoma               December 9, 1996
               Rogers, Arkansas                   February 17, 1997
               Salina, Kansas                     April 21, 1997
               Springfield, Missouri              June 23, 1997
               Enid, Oklahoma                     August 1, 1997
               Muskogee, Oklahoma                 November 12, 1997
               Wichita, Kansas #3                 January 14, 1998
               Manhattan, Kansas                  February 2, 1998

</TABLE>

               COTTON PATCH CAFE.  The Company owns and operates one Cotton
               Patch Cafe restaurant in McAlester, Oklahoma pursuant to a
               franchise agreement with Cotton Patch Cafe, Inc.  The menu of the
               Cotton Patch Cafe features a southern home-style menu with
               entrees including pork chops, chicken and beef, along with
               vegetables, rolls and beverages.  Cotton Patch Cafe offers full
               table service in a relaxed, family-oriented environment.  Most of
               the Cotton Patch Cafe items are prepared from scratch on the
               premises.  The average cost of a meal at the Company's Cotton
               Patch Cafe restaurant, including beverage, is approximately
               $6.00.

               The Company has determined that it will not develop additional
               Cotton Patch Cafe restaurants.

          ii)  DEVELOPING PRODUCTS AND INDUSTRY SEGMENTS.

               Not Applicable

          iii) SOURCES AND AVAILABILITY OF RAW MATERIALS.

               The Company's food costs are closely tied to market conditions. 
               The Company attempts to maintain its cost of sales percentages by
               refining cost controls, directing marketing activities to 
               re-emphasize low-cost menu items, and selectively increasing menu
               prices.  The Company monitors the cost of ingredients and
               attempts to adjust prices wherever possible to maintain desired
               margins.  The cost of sales percentage in the Amarillo Mesquite
               Grill restaurants is somewhat higher than in the Cotton Patch and
               Grandy's restaurants due to the different nature of the menu
               offerings.



                                      -3-

<PAGE>
         iv)   TRADEMARKS.

               The Company acquired two service marks registered with the United
               States Patent and Trademark Office for the words "Amarillo
               Grill."  Both of these registrations expire in January 2005,
               however, they are subject to renewal.  The Company has also
               recently filed with the United States Patent and Trademark Office
               an application for the words "Amarillo Mesquite Grill."  The
               Company considers all of these service marks to contribute
               significantly to its operations.

          v)   SEASONALITY.

               The Company experiences increased sales during holiday periods in
               its restaurants.

         vi)   PRACTICES RELATING TO WORKING CAPITAL.

               See "Management's Discussion and Analysis of Financial Condition
               and Results of Operations."

        vii)   DEPENDENCE UPON A SINGLE CUSTOMER.

               Not Applicable

       viii)   BACKLOG ORDERS.

               Not Applicable

         ix)   BUSINESS SUBJECT TO RENEGOTIATION AT ELECTION OF GOVERNMENT.

               Not Applicable

          x)   COMPETITION.

               The Company competes with mid-priced, full service restaurants
               primarily on the basis of quality of food and service, ambiance,
               location and price-value relationship.  The Company also competes
               with a number of other restaurants within its markets, including
               both locally owned restaurants and regional or national chains. 
               The Company believes that its mesquite grill concept, attractive
               price-value relationship and quality of food and service enable
               it to differentiate itself from its competitors.  While the
               Company believes that its mesquite grill restaurants are
               distinctive in design and operating concept, it is aware of
               restaurants that operate with similar concepts.  Many of the
               Company's competitors are well-


                                      -4-

<PAGE>

               established in the mid-priced dining segment and have 
               substantially greater financial, marketing and other 
               resources than the Company.  The Company believes that its 
               ability to compete effectively will continue to depend upon 
               its ability to offer high quality, moderately priced food in 
               a full service, distinctive dining environment.
               
         xi)   RESEARCH AND DEVELOPMENT.

               Not Applicable

        xii)   COMPLIANCE WITH ENVIRONMENTAL REGULATION.

               Not Applicable

       xiii)   EMPLOYEES.

               As of April 1, 1998, the Company employed approximately 750
               persons, including 15 administrative, 60 managerial, 275 
               full-time and 400 part-time restaurant employees.

     D)   FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT
          SALES.

          Not Applicable

ITEM 2.   PROPERTIES

The Company's principal executive office is located at 302 North Rock Road,
Suite 200, Wichita, Kansas  67206.  This office space is leased from an
unrelated third party.

The land and buildings for the Company's thirteen restaurants are leased
pursuant to long-term leases with unrelated third parties.  The initial lease
terms are for a period of three to twenty years with provisions for two
additional five year extensions.  The Company pays minimum annual rentals for
the land and building of each restaurant in amounts ranging from approximately
$30,000 to $85,050.  In some cases, the rental rates escalate in accordance with
sales volume in excess of specified amounts.  Each lease obligates the Company
to pay the real estate taxes and utilities applicable to the particular
location, to maintain casualty and liability insurance, and to keep the property
in general repair.

The Company currently operates twelve Amarillo Mesquite Grill restaurants and
one Cotton Patch Cafe restaurant which encompass approximately 4,000 to 6,000
square feet.  These restaurants seat approximately 140 to 280 persons and have
on-site parking for an average of 70 cars.  Typical capital costs for a
restaurant facility are approximately $700,000 for land,

                                      -5-

<PAGE>

$700,000 for the building and $300,000 for equipment and furnishings.  The 
Company has historically leased the land and buildings used pursuant to 
long-term lease arrangements.

ITEM 3.   LEGAL PROCEEDINGS

Not Applicable

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

No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this Report.



                THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

                                      -6-

<PAGE>

                                       PART II

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

     A)   MARKET INFORMATION.

          Stock quotations for the Company's stock are currently available on
          the OTC Bulletin Board under the symbol "MESQ".  The following
          tabulation sets forth the high and low closing bid quotations for the
          calendar quarters shown as reported by the OTC Bulletin Board.  The
          prices quoted represent prices between dealers in securities without
          adjustment for mark-ups, mark-downs, or commissions and do not
          necessarily reflect actual transactions.

<TABLE>
<CAPTION>

                                                  Bid Price
          Quarter Ended                 High                       Low
          -------------                 ------------------------------
          <S>                           <C>                        <C>
          April 28, 1996                  7/8                      3/8
          July 29, 1996                 2 3/8                      3/8
          October 27, 1996              2 3/8                    1 1/4
          January 26, 1997              3 3/4                    1 1/4

                                                  Bid Price
          Quarter Ended                 High                       Low
          -------------                 ------------------------------

          April 27, 1997                4 3/4                    2 1/2
          July 27, 1997                 4 1/2                    3 1/4
          October 26, 1997              4 3/8                    2 1/2
          January 25, 1998              3 1/2                    2 1/4


</TABLE>

     B)   HOLDERS OF COMPANY'S COMMON STOCK.

          The number of holders of record of the Company's common stock as of
          January 25, 1998, was 453, as determined by an examination of the
          Company's transfer book.  However, because a number of shares of stock
          are held in "street name," the actual number could not be determined
          more precisely.

     C)   DIVIDENDS.

          The Company has not paid dividends to its stockholders since its
          inception.  For the foreseeable future, it is anticipated that any
          earnings which may be generated from operations of the Company will be
          used to finance the growth of the Company, and that dividends will not
          be paid to stockholders.


                                      -7-

<PAGE>

ITEM 6.   SELECTED FINANCIAL DATA


<TABLE>
<CAPTION>

YEARS ENDED (1)                        January 25,    January 26,    January 28,    January 31,    January 31,
                                          1998           1997           1996           1995           1994
                                          ----           ----           ----           ----           ----
<S>                                   <C>             <C>            <C>            <C>             <C>
OPERATING DATA:
  Net sales                           $ 16,022,471    $14,185,898    $10,668,573     $9,106,111     $7,517,756
  Net loss                             $(1,270,293)   $(1,586,275)    $ (175,341)    $  (14,300)     $(126,852)
  Net loss per share                   $  (    .18)   $  (    .24)    $ (    .03)      $      -      $    (.02)
                                      ------------    -----------    -----------     ----------     ----------
BALANCE SHEET DATA:
  Current assets                        $  965,335   $    700,560     $  420,691     $1,009,879     $1,649,790
  Property and equipment                 7,442,598      4,601,807      4,041,077      3,342,382      2,285,972
  Other assets                             873,408      1,155,327        310,012        346,314        366,622
                                      ------------    -----------    -----------     ----------     ----------
  Total assets                          $9,281,341    $ 6,457,694     $4,771,780     $4,698,575     $4,302,384
                                      ------------    -----------    -----------     ----------     ----------
                                      ------------    -----------    -----------     ----------     ----------

Current liabilities                     $3,198,960    $ 2,931,011     $1,228,909       $900,991       $868,954
  Long-term debt, less
    current portion                      5,618,279      1,506,421        332,475        355,062        471,224
  Obligation under capital leases,
    less current portion                 1,046,525      1,500,618      1,457,062      1,520,544      1,082,625
  Deferred credits                             -            6,789         24,204         26,507         28,810
  Stockholders' equity (deficit)         ( 582,423)       512,855      1,729,130      1,895,471      1,850,771
                                      ------------    -----------    -----------     ----------     ----------
  Total liabilities and
    stockholders' equity (deficit)      $9,281,341    $ 6,457,694     $4,771,780     $4,698,575     $4,302,384
                                      ------------    -----------    -----------     ----------     ----------
                                      ------------    -----------    -----------     ----------     ----------
</TABLE>

______________________

(1)  Prior to fiscal year 1996, the Company operated on a fifty-two week period
     ending on January 31.  Beginning in fiscal year 1996, the Company changed
     to a fifty-two or fifty-three week period ending on the last Sunday in
     January.


                                      -8-

<PAGE>

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

GENERAL

During fiscal 1997, the Company took some major steps which will change the
direction of  the Company in the future.  Effective June 17, 1996, the Company
purchased four Amarillo Mesquite Grill restaurants.  The purchase price was
$1,500,000 cash and 1,000,000 shares of the Company's common stock valued at
$.30 per share.  Amarillo Mesquite Grill is a casual dining restaurant concept
that specializes in aged prime rib and steaks along with chicken and seafood all
uniquely grilled over an open flame of mesquite wood.  The Company plans to
expand the Amarillo concept.

In preparation for this expansion, the Company closed three Cotton Patch Cafes,
one of which was sold, one converted to an Amarillo Mesquite Grill and one which
was being converted to an Amarillo Mesquite Grill as of January 26, 1997.  The
Company also decided during fiscal 1997 to discontinue operations of two
Grandy's restaurants in fiscal 1998.  The provision for restaurant closings,
dispositions and conversions in the amount of $518,321 recorded in fiscal 1997
related principally to the write off of restaurant assets and related intangible
assets.  During fiscal 1998, three additional Cotton Patch Cafes were converted
to Amarillo Mesquite Grills leaving the Company with only two Cotton Patch Cafes
as of year end January 25, 1998.

The Company has also determined that it is in its best interest to focus its
efforts and financial resources on the Amarillo Mesquite Grill concept. 
Therefore, effective March 24, 1997, the Company sold to Red Apple Corporation
all of the assets of the eight Grandy's restaurants owned and operated by the
Company.  Red Apple Corporation is owned by five individuals, four of which are
officers and directors of the Company.  The consideration received for these
assets consisted of $435,000 in cash.  Red Apple Corporation also assumed the
lease obligations associated with these restaurants.  The Company recognized a
gain of $249,536 on this disposition.  Management believes the sales price which
was computed as three times the prior year's store level earnings before
overhead or administrative expenses, plus inventories and cash on hand,
represents fair value for the assets sold.

Effective May 27, 1997, the Company changed its corporate name to Amarillo
Mesquite Grill, Inc.  Management believes this name change more accurately
reflects the direction the Company is headed.

RESULTS OF OPERATIONS

For the year ended January 25, 1998, sales were $16,022,471 as compared to
$14,185,898 and $10,668,573 for fiscal 1997 and 1996, respectively.  All of the
sales increase can be attributed to the addition of Amarillo Mesquite Grill
restaurants.  The following schedule represents a summary of the restaurants
operated by the Company during the three year period ended January 25, 1998.


                                      -9-

<PAGE>


<TABLE>
<CAPTION>
                                      Cotton    Amarillo Mesquite
                        Grandy's    Patch Cafe    Grill                  Total
                        --------    ----------    -----                  -----
<S>                     <C>         <C>         <C>                      <C>
January 28, 1996            8           7           -                      15
       Opened               -           1           -                       1
       Purchased            -           -           4                       4
       Converted            -          (1)          1                       -
       Closed               -          (2)          -                      (2)
                        --------    ----------    -----                  -----
January 26, 1997            8           5           5                      18
                        --------    ----------    -----                  -----
       Sold                (8)          -           -                      (8)
       Converted            -          (3)          3                       -
       Opened               -           -           3                       3
                        --------    ----------    -----                  -----
 January 25, 1998           -           2          11                      13
                        --------    ----------    -----                  -----
                        --------    ----------    -----                  -----
</TABLE>

As of January 25, 1998, the Company had one Amarillo Mesquite Grill under
construction which opened during February 1998.  In addition, subsequent to year
end, the Company closed one of the two remaining Cotton Patch Cafes which will
be converted to an Amarillo Mesquite Grill.

Cost of sales, as a percentage of total sales, was 37.7%, 33.3% and 31.5% for
fiscal 1998, 1997 and 1996, respectively.  The increase in cost of sales, as a
percentage of total sales, is the result of a change in direction by the Company
from fast food restaurants to an upscale, full service restaurant concept,
Amarillo Mesquite Grill, which has a higher cost of sales.

Operating expenses include all direct and indirect labor costs incurred at the
store level and all other store level operating costs, the major component of
which are operating supplies, rent, repairs and maintenance, advertising,
utilities and other occupancy costs.  Operating expenses, as a percentage of
total sales, were 53.4%, 59.4% and 59.1% for fiscal 1998, 1997 and 1996,
respectively.  The decrease in operating expense, as a percentage of total
sales, is the result of operating more Amarillo Mesquite Grills which have
higher sales volumes and lower proportionate operating costs than the Grandy's
restaurants which were sold during the first quarter of fiscal 1998.

General and administrative expenses include area management personnel and
recruiting and training expenses relating to the development of management
personnel for future restaurants as well as home office costs for
administration, accounting, support personnel, rent and other costs of
maintaining a home office.  General and administrative expenses, as a percentage
of total sales, were 10.5%, 7.6% and 4.6% for fiscal 1998, 1997 and 1996,
respectively.  The increase in general and administrative expenses can be
attributed to area management positions and recruiting and training costs being
in existence for all of fiscal 1998.  During fiscal 1998, these costs were
approximately $858,000 as compared to approximately $285,000 for fiscal 1997 and
$75,000 for fiscal 1996.


                                     -10-

<PAGE>

Depreciation and amortization are directly related to the acquisition or 
disposition of fixed assets.  The increase in depreciation and amortization 
from fiscal 1996 to fiscal 1997 is the result of operating more restaurants.  
Even though the number of restaurants operated by the Company decreased from 
fiscal 1997 to fiscal 1998, the investment was greater and therefore 
depreciation and amortization increased.

Interest expense for fiscal 1998, 1997 and 1996 was $511,531, $306,245 and 
$224,450, respectively.  The increase in the dollar amount of interest 
expense from fiscal 1996 to fiscal 1998 is the result of an increase in short 
and long-term debt relating to the acquisition of four Amarillo Mesquite 
Grill restaurants in fiscal 1997 and continuing new store development 
thereafter.

The Company incurred noncash expenses of $97,840 and $61,000 in fiscal 1998 
and 1997, respectively, related to the issuance of stock options pursuant to 
debt guarantees as disclosed in note 5 to the financial statements.

As of January 25, 1998, the Company had net operating loss carryforwards for 
income tax purposes of approximately $6,476,000 which, if not used, will 
expire $552,000 in fiscal 2001, $984,000 in fiscal 2002,$1,193,000 in fiscal 
2003, $434,000 in fiscal 2004, $134,000 in fiscal 2005, $7,000 in fiscal 
2006, $180,000 in fiscal 2008, $44,000 in fiscal 2009, $116,000 in fiscal 
2011, $1,524,000 in fiscal 2012, and $1,308,000 in fiscal 2013.

The Company's loss for the current year ended January 25, 1998, can be 
largely attributed to growth of the Amarillo Mesquite Grill concept.  During 
the year ended January 25, 1998, the Company incurred approximately $550,000 
in pre-opening costs and start-up costs through the first month of 
operations.  The Company expenses these costs as incurred.  The Company 
expects to be profitable the first full month a restaurant is open.  In 
addition, during fiscal 1998, the Company expensed approximately $858,000 
compared to approximately $285,000 in fiscal 1997 for recruiting and training 
expenses relating to the development of management personnel for future 
restaurants and for an increase in area management personnel.  The Company 
will continue to incur recruiting and training costs and pre-opening costs as 
the Company continues to grow.  However, as the Company's base number of 
restaurants increase, these expenses become less significant.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of funding to finance its business have been 
its cash flow from operations and, principally during the past two years, 
proceeds from long-term debt.  On January 25, 1998 and January 26, 1997, the 
Company had an excess of current liabilities over current assets of 
$2,233,624 and $2,230,451, respectively.  Management anticipates higher cash 
flow from restaurant operations in fiscal 1999 and that such higher operating 
cash flow together with remaining borrowing capacity of $200,000 will enable 
the Company to meet its financial obligations in fiscal 1999 as they come 
due.  In the event operating cash flow and remaining borrowing capacity are 
not sufficient to enable the Company to meet its financial obligations in 

                                      -11-
<PAGE>

fiscal 1999, an individual who is a major stockholder and director of the 
Company has committed to provide up to $1,000,000 of additional capital or 
guarantees of additional indebtedness on behalf of the Company.

Substantially all of the Company's revenues are derived from cash sales.  The 
Company does not maintain significant receivables and inventories; therefore, 
working capital requirements for continuing operations are not significant.

Additions to property and equipment and the acquisition of restaurants 
represent the single largest use of funds by the Company.  The expenditures 
are primarily made for the purchase and development of new restaurants.  Cash 
expended for capital expenditures was $3,563,335 for the year ended January 
25, 1998, compared to $2,286,707 for the year ended January 26, 1997.  These 
expenditures were funded primarily with proceeds from long-term debt.  These 
capital expenditures have resulted in a decrease in working capital for the 
portion of long-term debt due within one year which was used for funding the 
capital expenditures.

The Company plans to continue expansion of the Amarillo Mesquite Grill 
concept in fiscal 1999.  The Company intends to lease existing restaurant 
properties which are suitable for conversion to the Amarillo Mesquite Grill 
concept.  It is expected that each conversion will require approximately 
$300,000 to $500,000 for equipment and remodel costs.  A ground-up proto-type 
restaurant will cost approximately $1,700,000 for land, building and 
equipment.  The Company is holding discussions with an investment banking 
firm regarding a private placement of convertible securities which would 
enable the Company to open approximately eight to ten new Amarillo Grill 
restaurants in fiscal 1999.  The Company has no commitments for financing at 
this time.  In order for the Company to meet its expansion goals for fiscal 
1999, it will need to raise additional funds through debt or equity 
instruments, the availability and terms of which will depend upon market and 
other conditions.  There can be no assurance that such additional financing 
will be available on terms acceptable to the Company.

This report contains certain forward-looking statements, including those 
relating to the opening of additional restaurants and planned capital 
expenditures.  Although the Company believes that the assumptions underlying 
the forward-looking statements contained herein are reasonable, actual 
results could differ materially from such forward-looking statements.  In 
light of the significant uncertainties inherent in the forward-looking 
statements included herein, the inclusion of such information should not be 
regarded as a representation by the Company that objectives and plans of the 
Company will be achieved.


                                      -12-

<PAGE>

YEAR 2000 COMPLIANCE

The Company is currently taking actions to provide that its computer systems 
are capable of processing in the year 2000.  The gross costs associated with 
this are not expected to be material and are being expensed as incurred.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements that the Company is required to file under Item 8 of
this Form 10-K are presented on pages F-1 through F-24 of this Report.

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

Not Applicable
                                       PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information relating to this Item is included in the Company's Annual 
Proxy Statement for the 1998 Annual Meeting of Stockholders under the section 
entitled "Election of Directors" and under the section entitled "Section 
16(a) Beneficial Ownership Reporting Compliance" and these portions of such 
Proxy Statement are herein incorporated by reference.

ITEM 11.  EXECUTIVE COMPENSATION

The information relating to this Item is included in the Company's Annual 
Proxy Statement for the 1998 Annual Meeting of Stockholders under the section 
entitled "Executive Compensation" and "Directors' Fees" and these portions of 
such Proxy Statement are herein incorporated by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

The information relating to this Item is included in the Company's Annual 
Proxy Statement for the 1998 Annual Meeting of Stockholders under the section 
entitled "Principal Holders of Securities" and that portion of such Proxy 
Statement is herein incorporated by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information relating to this Item is included in the Company's Annual 
Proxy Statement for 1998 Annual Meeting of Stockholders under the section 
entitled "Certain Relationships and Related Transactions" and that portion of 
such Proxy Statement is herein incorporated by reference.

                                     -13-
<PAGE>

                                    PART IV

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

     A)   DOCUMENTS FILED AS A PART OF THIS REPORT.

          i)   FINANCIAL STATEMENTS

               See "Index to Financial Statements on Page F-1 of this Report

          ii)  FINANCIAL STATEMENT SCHEDULES

               Not Applicable

          iii) EXHIBITS

               See Item 14(c), "Exhibits" below.

     B)   REPORTS ON FORM 8-K.

          No reports on Form 8-K were filed by the Company during the quarter
          ended January 25, 1998.

     C)   EXHIBITS.

     3.1       Restated Articles of Incorporation of Grandy's of El Paso, Inc.
               and Change of Corporate Name to Maverick Restaurant Corporation
               and Certificate of Correction to Restated Articles of
               Incorporation of Grandy's of El Paso, Inc. changing the Corporate
               Name to Maverick Restaurant Corporation as filed with the
               Secretary of State of the State of Kansas on July 28, 1983 and
               August 18, 1983, respectively (filed as Exhibit 3.1 to
               Registration No. 2-86266-FW and such exhibit is hereby
               incorporated by reference).

     3.2       Certificate of Amendment to Articles of Incorporation as filed
               with the Secretary of State of the State of Kansas on May 22,
               1984 (filed as Exhibit 3.2 to the Company's Form 10-K for the
               fiscal year ended January 31, 1985, and such exhibit is hereby
               incorporated by reference).

     3.3       Certificate of Amendment to Articles of Incorporation as filed
               with the Secretary of State of the State of Kansas on May 27,
               1997 changing the corporate name to Amarillo Mesquite Grill, Inc.
               (filed herewith).


                                     -14-

<PAGE>

     3.4       Bylaws of the Company (filed as Exhibit 3.2 to Registration No.
               2-86266-FW and such exhibit is hereby incorporated by reference).

    10.1       Asset Purchase Agreement dated June 14, 1996 between Homestead
               West, Inc., Amagril, Inc. and the Company (filed as Exhibit 10.1
               to the Company's Form 8-K dated June 17, 1996 and such exhibit is
               hereby incorporated by reference).

    10.2       Stock Option Agreement dated June 17, 1996 between the Company
               and C. Howard Wilkins, Jr. and amendment thereto (filed as
               Exhibit 10.2 to the Company's Form 10-K for the fiscal year ended
               January 26, 1997 and such exhibit is hereby incorporated by
               reference).

    10.3       Stock Option Agreement dated June 17, 1996 between the Company
               and Robert A. Geist and amendment thereto (filed as Exhibit 10.3
               to the Company's Form 10-K for the fiscal year ended January 26,
               1997 and such exhibit is hereby incorporated by reference).

    10.4       Agreement dated February 23, 1998 between the Company and
               Robert A. Geist, C. Howard Wilkins, Jr., the Wilkins Family
               Foundation, Inc., General Resources, L.P., Tom Devlin and
               Andy Mouland (filed as Exhibit 10.1 to the Company's Form 8-K 
               dated March 27, 1998 and such exhibit is hereby incorporated by 
               reference).

    10.5       1994 Incentive Stock Option Plan (filed as Exhibit 10.9 to the
               Company's Form 10-K for the fiscal year ended January 31, 1995
               and such exhibit is hereby incorporated by reference).

    10.6       1997 Incentive Stock Option Plan (filed as Exhibit A to the
               Company's Proxy Statement dated April 23, 1997 and such exhibit
               is hereby incorporated by reference).

     23        Consent of KPMG Peat Marwick LLP (filed herewith).

________________
     Management's Compensation Plan


                                     -15-

<PAGE>
                                      SIGNATURES

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

                                   AMARILLO MESQUITE GRILL, INC.

                                   By:  /s/ Chris F. Hotze        
                                      --------------------------------------
                                       Chris F. Hotze, President  

Date:     April 23, 1998     

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons of the Registrant and in the
capacities and on the date indicated.


<TABLE>
<CAPTION>

Signature                          Title                       Date
---------                          -----                       ----
<S>                                <C>                         <C>
 /s/ Chris F. Hotze                President, Chairman of      April 23, 1998
--------------------------         the Board and Director      -----------------
Chris F. Hotze                     (Principal Executive
                                   Officer)


 /s/ Linn F. Hohl                  Vice President of           April 23, 1998  
--------------------------         Finance, Treasurer,         -----------------
Linn F. Hohl                       Assistant Secretary and
                                   Director (Principal 
                                   Financial and Accounting
                                   Officer)


 /s/ Alan L. Bundy                 Executive Vice President    April 23, 1998  
--------------------------         and Director                -----------------
Alan L. Bundy


 /s/ Andres Mouland                Vice President of           April 23, 1998  
--------------------------         Operations and Director     -----------------
Andres Mouland           


/s/ C. Howard Wilkins, Jr.         Director                    April 23, 1998  
--------------------------                                     -----------------
C. Howard Wilkins, Jr.


</TABLE>

                                     -16-



<PAGE>

                           AMARILLO MESQUITE GRILL, INC.

                     INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<S>                                                                   <C>
Independent Auditors' Report                                          F-2

Consolidated Balance Sheets                                           F-3

Consolidated Statements of Operations                                 F-5

Consolidated Statements of Stockholders' Equity (Deficit)             F-6

Consolidated Statements of Cash Flows                                 F-7

Notes to Consolidated Financial Statements                            F-9
</TABLE>

                                      F-1
<PAGE>

                            INDEPENDENT AUDITORS' REPORT


The Board of Directors and Stockholders
Amarillo Mesquite Grill, Inc.:

We have audited the accompanying consolidated balance sheets of Amarillo 
Mesquite Grill, Inc. as of January 25, 1998 and January 26, 1997, and the 
related consolidated statements of operations, stockholders' equity (deficit) 
and cash flows for each of the years in the three-year period ended January 
25, 1998.  These consolidated financial statements are the responsibility of 
the Company's management.  Our responsibility is to express an opinion on 
these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of Amarillo 
Mesquite Grill, Inc. as of January 25, 1998 and January 26, 1997, and the 
results of its operations and its cash flows for each of the years in the 
three-year period ended January 25, 1998, in conformity with generally 
accepted accounting principles.


                                       /s/ KPMG Peat Marwick LLP
                                       ------------------------------
                                       KPMG Peat Marwick LLP

Wichita, Kansas
March 20, 1998

                                      F-2
<PAGE>

                           AMARILLO MESQUITE GRILL, INC.

                            Consolidated Balance Sheets

                       January 25, 1998 and January 26, 1997

<TABLE>
<CAPTION>
                                                             1998           1997
                                                         -----------     ---------
<S>                                                      <C>             <C>
Current assets:
 Cash                                                    $   563,836       328,285
 Accounts receivable                                          49,472        22,058
 Inventories                                                 167,848       219,315
 Prepaid expenses and other current assets                   184,179       130,902
                                                         -----------     ---------
      Total current assets                                   965,335       700,560
                                                         -----------     ---------

Property and equipment (notes 3 and 4):
 Buildings                                                 1,105,229       224,178
 Leasehold improvements                                    2,258,368     1,433,338
 Equipment and fixtures                                    4,210,270     3,883,586
 Transportation equipment                                     18,000        18,000
 Property under capital leases                             1,234,626     1,903,191
                                                         -----------     ---------
                                                           8,826,493     7,462,293
 Less accumulated depreciation and amortization            1,383,895     2,860,486
                                                         -----------     ---------
      Total property and equipment                         7,442,598     4,601,807
                                                         -----------     ---------

Other assets:
 Cost in excess of net tangible assets of 
   purchased businesses, net of accumulated 
   amortization of $115,337 and $436,309                     831,674     1,012,496
 License fees, net of accumulated amortization 
   of $1,133 and $52,361                                       7,867        63,327
 Deposits and other                                           33,867        79,504
                                                         -----------     ---------
      Total other assets                                     873,408     1,155,327
                                                         -----------     ---------

      Total assets                                       $ 9,281,341     6,457,694
                                                         -----------     ---------
                                                         -----------     ---------
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-3
<PAGE>

                        AMARILLO MESQUITE GRILL, INC.

                    Consolidated Balance Sheets, Continued

                    January 25, 1998 and January 26, 1997

<TABLE>
<CAPTION>
                                                                       1998          1997
                                                                   -----------    ----------
<S>                                                                <C>            <C>
Current liabilities:
 Current portion of long-term debt (note 3)                        $   871,936     1,014,778
 Current portion of obligations under capital leases
   (note 4)                                                             36,336        95,947
 Accounts payable                                                      985,093       860,160
 Construction costs payable                                            552,944       179,239
 Accrued payroll                                                       197,053       205,373
 Other accrued liabilities                                             555,598       487,211
 Accrual for restaurant closings (note 7)                                    -        88,303
                                                                   -----------    ----------
     Total current liabilities                                       3,198,960     2,931,011

Long-term debt, less current portion (note 3)                        5,618,279     1,506,421
Obligations under capital leases, less current portion
  (note 4)                                                           1,046,525     1,500,618
Deferred credits (note 4)                                                    -         6,789
                                                                   -----------    ----------
     Total liabilities                                               9,863,764     5,944,839
                                                                   -----------    ----------

Stockholders' equity (deficit) (note 5):
 Preferred stock, $.01 par value, authorized 10,000,000
   shares, none issued                                                       -             -
 Common stock, $.01 par value, authorized 20,000,000
   shares, issued 7,183,895 shares at January 25, 1998
   and 7,141,458 shares at January 26, 1997                             71,839        71,414
 Additional paid-in capital                                          6,666,574     6,491,984
 Accumulated deficit                                                (7,050,836)   (5,780,543)
 Treasury stock, 60,000 shares of common 
   stock at cost                                                      (270,000)     (270,000)
                                                                   -----------    ----------
     Total stockholders' equity (deficit)                             (582,423)      512,855

Commitments (note 4)                                                                             
                                                                   -----------    ----------

     Total liabilities and stockholders' 
       equity (deficit)                                            $ 9,281,341     6,457,694
                                                                   -----------    ----------
                                                                   -----------    ----------
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>

                          AMARILLO MESQUITE GRILL, INC.

                      Consolidated Statements of Operations

       Years Ended January 25, 1998, January 26, 1997 and January 28, 1996

<TABLE>
<CAPTION>
                                                             1998            1997           1996
                                                        -------------     ----------     ----------
<S>                                                     <C>               <C>            <C>
Net sales                                               $  16,022,471     14,185,898     10,668,573
                                                        -------------     ----------     ----------

Costs and expenses:
   Cost of sales                                            6,041,032      4,719,511      3,359,662
   Restaurant operating expenses (note 4)                   8,550,466      8,428,820      6,305,378
   General and administrative                               1,685,994      1,081,231        493,836
   Depreciation and amortization                              655,437        604,788        479,163
   Provision for restaurant closings, dispositions
     and conversions (note 7)                                       -        518,321              -
                                                        -------------     ----------     ----------
      Total costs and expenses                             16,932,929     15,352,671     10,638,039
                                                        -------------     ----------     ----------
     Operating income (loss)                                 (910,458)    (1,166,773)        30,534
                                                        -------------     ----------     ----------

Other income (expense):
   Interest income                                                  -             11         18,575
   Interest expense                                          (511,531)      (306,245)      (224,450)
   Gain on sales of restaurants 
     (notes 1 and 11)                                         249,536              -              -
   Loss on sale of fixed assets                                     -        (52,268)             -
   Noncash expense from issuance of stock
     options pursuant to debt guarantees 
     (notes 3 and 5)                                          (97,840)       (61,000)             -
                                                        -------------     ----------     ----------
      Total other expense                                    (359,835)      (419,502)      (205,875)
                                                        -------------     ----------     ----------

      Loss before income taxes                             (1,270,293)    (1,586,275)      (175,341)

Income taxes (note 6)                                               -              -              -
                                                        -------------     ----------     ----------

      Net loss                                          $  (1,270,293)    (1,586,275)      (175,341)
                                                        -------------     ----------     ----------
                                                        -------------     ----------     ----------

Net loss per common share - 
  basic and diluted                                     $        (.18)          (.24)          (.03)
                                                        -------------     ----------     ----------
                                                        -------------     ----------     ----------

Average shares outstanding - 
  basic and diluted                                         7,103,919      6,701,458      6,081,458
                                                        -------------     ----------     ----------
                                                        -------------     ----------     ----------
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>

                           AMARILLO MESQUITE GRILL, INC.

             Consolidated Statements of Stockholders' Equity (Deficit)

        Years Ended January 25, 1998, January 26, 1997 and January 28, 1996

<TABLE>
<CAPTION>
                                                                 Additional
                                                     Common        Paid-In      Accumulated      Treasury
                                                      Stock        Capital        Deficit          Stock         Total
                                                   ---------     ----------     -----------      ---------    ----------
<S>                                                <C>           <C>            <C>              <C>          <C>
Balance, January 31, 1995                            $61,414      6,122,984     (4,018,927)      (270,000)     1,895,471
Contributed capital (note 5)                               -          9,000              -              -          9,000
Net loss                                                   -              -       (175,341)             -       (175,341)
                                                   ---------     ----------     -----------      ---------    ----------

Balance, January 28, 1996                             61,414      6,131,984     (4,194,268)      (270,000)     1,729,130
Issuance of 1,000,000 shares of common
  stock in connection with acquisition
  (note 9)                                            10,000        290,000              -              -        300,000
Contributed capital (note 5)                               -          9,000              -              -          9,000
Noncash expense from issuance of stock
  options pursuant to debt guarantees
  (note 5)                                                 -         61,000              -              -         61,000
Net loss                                                   -              -     (1,586,275)             -     (1,586,275)
                                                   ---------     ----------     -----------      ---------    ----------

Balance, January 26, 1997                             71,414      6,491,984     (5,780,543)      (270,000)       512,855
Contributed capital (note 5)                               -          9,000              -              -          9,000
Noncash expense from issuance of stock
  options pursuant to debt guarantees
  (note 5)                                                 -         97,840              -              -         97,840
Issuance of 42,437 shares of common
  stock pursuant to stock option plans
  (note 5)                                               425         67,750              -              -         68,175
Net loss                                                   -              -     (1,270,293)             -     (1,270,293)
                                                   ---------     ----------     -----------      ---------    ----------

Balance, January 25, 1998                            $71,839      6,666,574     (7,050,836)      (270,000)      (582,423)
                                                   ---------     ----------     -----------      ---------    ----------
                                                   ---------     ----------     -----------      ---------    ----------
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-6
<PAGE>

                           AMARILLO MESQUITE GRILL, INC.

                       Consolidated Statements of Cash Flows

        Years Ended January 25, 1998, January 26, 1997 and January 28, 1996

<TABLE>
<CAPTION>
                                                                    1998           1997           1996
                                                                -----------     -----------   -----------
<S>                                                             <C>             <C>           <C>
Cash flows from operating activities:
 Net loss                                                       $(1,270,293)    (1,586,275)     (175,341)
 Adjustments to reconcile net loss to net cash provided
  by (used in) operating activities:
   Depreciation and amortization                                    655,437        604,788       479,163
   Loss on sale of equipment                                              -         52,268             -
   Gain on sale of restaurants                                     (249,536)             -             -
   Noncash provision for restaurant closings,
    dispositions and conversions                                          -        518,321             -
   Noncash compensation expense                                       9,000          9,000         9,000
   Noncash expense from issuance of stock
    options pursuant to debt guarantees (note 5)                     97,840         61,000             -
   Increase (decrease) in cash, net of effects of
    acquisitions and dispositions:
     Accounts receivable                                            (27,414)        (9,052)       17,076
     Inventories                                                    (19,943)       (26,727)        2,395
      Prepaid expenses                                              (47,792)       (27,655)      (36,347)
      Accounts payable                                              124,933        375,031        48,070
      Accrued expenses                                               60,067        295,248        78,243
      Other                                                          40,790        (71,950)         (930)
                                                                -----------     -----------   -----------
        Cash provided by (used in) operating 
         activities                                                (626,911)       193,997       421,329
                                                                -----------     -----------   -----------

Cash flows from investing activities:
 Additions to property and equipment                             (3,563,335)      (696,168)   (1,054,920)
 Business acquisition (note 9)                                            -     (1,500,000)            -
 Proceeds from sale of property and equipment                             -        253,274        18,691
 Proceeds from sale of restaurants                                  428,300              -             -
 Additions to license fees                                                -         (9,000)      (18,000)
                                                                -----------     -----------   -----------
        Cash used in investing activities                        (3,135,035)    (1,951,894)   (1,054,229)
                                                                -----------     -----------   -----------

Cash flows from financing activities:
 Issuance of common stock pursuant to stock option plan              68,175              -             -
 Proceeds from long-term debt                                     4,330,000      2,425,000       210,000
 Repayment of long-term debt and capital lease
  obligations                                                      (400,678)      (534,183)     (183,164)
                                                                -----------     -----------   -----------
        Cash provided by financing activities                     3,997,497      1,890,817        26,836
                                                                -----------     -----------   -----------

                                                                                               (Continued)
</TABLE>

                                      F-7
<PAGE>

                          AMARILLO MESQUITE GRILL, INC.

                Consolidated Statements of Cash Flows, Continued

       Years Ended January 25, 1998, January 26, 1997 and January 28, 1996


<TABLE>
<CAPTION>
                                                                    1998           1997           1996
                                                                -----------     -----------   -----------
<S>                                                             <C>             <C>           <C>
Net increase (decrease) in cash                                  $  235,551       132,920       (606,064)
Cash at beginning of year                                           328,285       195,365        801,429
                                                                -----------     -----------   -----------

Cash at end of year                                              $  563,836       328,285        195,365
                                                                -----------     -----------   -----------
                                                                -----------     -----------   -----------

Cash paid during the year for:
 Interest                                                        $  515,527       302,250        224,450
 Income taxes                                                             -             -              -
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-8
<PAGE>
                                          
                           AMARILLO MESQUITE GRILL, INC.
                                          
                     Notes to Consolidated Financial Statements
                                          
              January 25, 1998, January 26, 1997 and January 28, 1996
                                          
                                          

 (1) OPERATIONS
     Amarillo Mesquite Grill, Inc. (the Company) owns and operates two 
     franchised Cotton Patch Cafes located in Oklahoma and eleven Amarillo
     Grill restaurants in Kansas, Oklahoma, Missouri and Arkansas.  Cotton 
     Patch Cafe is a casual, full service family-style restaurant specializing
     in home-style cooking. The Cotton Patch Cafe concept features a variety of
     full entree meals all prepared to order.  Amarillo Grill is a casual, full
     service restaurant specializing in mesquite-grilled steaks.

     During fiscal 1998, the Company changed the corporate name from Maverick
     Restaurant Corporation to Amarillo Mesquite Grill, Inc.

     Effective March 24, 1997, the Company sold to Red Apple Corporation all of
     the assets of the eight Grandy's restaurants owned and operated by the
     Company.  Red Apple Corporation also assumed the obligations under existing
     leases for each restaurant location.  Red Apple Corporation is owned by 
     five individuals, three of which are officers and directors of the Company 
     and one of which is a significant stockholder of the Company.  The 
     consideration received for these assets consisted of $435,000 in cash.  The
     Company recognized a gain of $249,536 on this disposition in fiscal 1998.

     On September 11, 1997, the Company and four of its stockholders formed AMG,
     Inc., a Kansas corporation, to develop and own three Amarillo Grill
     restaurants.  AMG, Inc. is owned 48% by the Company and 52% by the four
     stockholders (see note 12).  The accounts and operations of AMG, Inc. have
     been consolidated with the Company as entities under common control. 

 (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     (a) PRINCIPLES OF CONSOLIDATION
         The consolidated financial statements include the financial statements 
         of Amarillo Mesquite Grill, Inc. (Amarillo) and its common controlled
         subsidiary, AMG, Inc.  All significant intercompany balances and
         transactions have been eliminated in consolidation.

         The Company has included the amount of AMG, Inc.'s loss otherwise
         attributable to the stockholders who own the 52% interest in AMG, Inc.,
         of $166,652, in the consolidated financial statements because such loss
         exceeds the capital investment made by these stockholders and they are
         under no obligation to provide additional capital to AMG, Inc.

                                     F-9
<PAGE>

                           AMARILLO MESQUITE GRILL, INC.
                                          
                  Notes to Consolidated Financial Statements, Continued

 (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
     (b) FISCAL YEAR
         The Company's fiscal year is the fifty-two or fifty-three week period
         ending on the last Sunday in January.

     (c) INVENTORIES
         Inventories are stated at the lower of cost (first-in, first-out) or
         market.

     (d) PROPERTY AND EQUIPMENT
         Property and equipment is recorded at cost.  Depreciation is computed 
         by the straight-line method based on the estimated useful life of the
         asset.  Leasehold improvements are amortized over the lesser of the
         useful life of the assets or the remaining lease term.  Maintenance and
         repairs are charged to expense as incurred; renewals and betterments 
         are capitalized.  Estimated useful lives are as follows:

<TABLE>
         <S>                                                    <C>
         Buildings                                                  20 years
         Leasehold improvements                                 3 - 20 years
         Equipment and fixtures                                 5 - 10 years
         Autos                                                       5 years
         Property under capital leases                              20 years
</TABLE>

     (e) LICENSE FEES
         A license fee for each franchised Grandy's or Cotton Patch Cafe
         restaurant is payable on commencement of construction.  Amortization is
         provided, beginning when the restaurant is opened, on the straight-line
         method over the initial term of the related restaurant lease.  In 
         fiscal 1998, the Company reduced capitalized license fees by $106,688 
         due to the sale of Grandy's restaurants (note 1) and store closings.  
         In fiscal 1997, the Company recorded a write-down of $16,288 on license
         fees due to store closings (see note 7).

     (f) INTANGIBLE ASSETS
         Cost in excess of net tangible assets of purchased businesses is
         amortized on a straight-line basis over thirteen years which
         approximates the remaining life of the building leases.  The Company
         periodically assesses the recoverability of intangible assets by
         determining whether the amortization of the intangible asset balance
         over its remaining life can be recovered through undiscounted future
         operating cash flows of the acquired operation.  The amount of goodwill
         impairment, if any, is measured based on projected discounted future
         operating cash flows.  The assessment of the recoverability of
         intangible assets will be impacted if estimated future operating cash
         flows are not achieved.  In fiscal 1997, the Company recorded a 
         write-down of $60,331 on intangible assets due to store closings (see 
         note 7).

                                     F-10
<PAGE>
                           AMARILLO MESQUITE GRILL, INC.
                                          
                  Notes to Consolidated Financial Statements, Continued

 (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
     (g) PRE-OPENING COSTS
         Pre-opening costs are charged to operations as incurred.
 
     (h) INCOME TAXES
         Deferred income taxes are recognized for all temporary differences
         between the tax and financial reporting bases of the Company's assets
         and liabilities and operating loss and tax credit carryforwards based 
         on enacted tax laws and statutory tax rates applicable to the periods 
         in which the differences are expected to affect taxable income.

     (i) USE OF ESTIMATES
         The preparation of the financial statements in conformity with 
         generally accepted accounting principles requires the Company to make 
         estimates and assumptions that affect the reported amounts of assets 
         and liabilities at the date of the financial statements and the 
         reported amounts of revenues and expenses during the reporting period.
         Actual results could differ from those estimates.

     (j) NET EARNINGS PER SHARE
         In 1997, the Financial Accounting Standards Board issued SFAS No. 128,
         EARNINGS PER SHARE (Statement 128) which replaces the prior accounting
         standard regarding computation and presentation of earnings per share. 
         Statement 128 requires a dual presentation of basic earnings per share
         (based on the weighted average number of common shares outstanding) and
         diluted earnings per share which reflects the potential dilution that
         could occur if contracts to issue securities (such as stock options)
         were exercised.  The Company has adopted Statement 128 as of January 
         25, 1998 and, accordingly, earnings per share data for all periods 
         presented has been computed in accordance with Statement 128.  The 
         adoption of Statement 128 had no impact on the Company's previously 
         reported loss per share data.

         Options to purchase common stock were not included in the computation 
         of diluted earnings (loss) per common share because the Company had a 
         net loss available to common stockholders and the inclusion of such 
         options would be antidilutive.  As of January 25, 1998, there are 
         1,273,613 options outstanding at a weighted average exercise price of 
         $2.11 which may become dilutive in the future.

                                     F-11
<PAGE>
                           AMARILLO MESQUITE GRILL, INC.
                                          
                  Notes to Consolidated Financial Statements, Continued

 (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
     (k) STATEMENTS OF CASH FLOWS
         Noncash investing and financing activities included the following:

<TABLE>
<CAPTION>
                                                                 1998          1997       1996
                                                                 ----          ----       ----
         <S>                                                   <C>            <C>        <C>
         Increase in construction costs payable                $373,705        90,539    88,700
 
         Addition to capital leases                            $      -       385,804         -
 
         Issuance of common stock in business acquisition      $      -       300,000         -
 
         Noncash expense from issuance of stock options 
          pursuant to debt guarantees                          $ 97,840        61,000         -
             
</TABLE>

     (l) STOCK AWARDS
         The Company accounts for its stock options in accordance with the
         provisions of Accounting Principles Board (APB) Opinion No. 25,
         ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES.  As such, compensation
         expense is recorded on the date of grant only if the current market
         price of the underlying stock exceeds the exercise price.  In
         addition, SFAS No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION,
         requires that pro forma net income and pro forma income per share
         disclosures for employee stock option grants made in fiscal years that
         begin after December 15, 1994 be provided as if the fair-value-based
         cost measurement method defined in SFAS No. 123 had been applied.
 
         The Company accounts for its stock options issued to persons other
         than employees in accordance with the provisions of SFAS No. 123.  As
         such, expense is determined on the date of grant and is charged to
         operations over the period the services are provided, based on the
         fair-value-based cost measurement method defined in SFAS No. 123 (see
         note 5).
 
     (m) IMPAIRMENT OF LONG-LIVED ASSETS
         Long-lived assets and certain identifiable intangibles are reviewed
         for impairment whenever events or changes in circumstances indicate
         that the carrying amount of an asset may not be recoverable. 
         Recoverability of assets to be held and used is measured by a
         comparison of the carrying amount of an asset to future net cash flows
         expected to be generated by the asset.  If such assets are considered
         to be impaired, the impairment to be recognized is measured by the
         amount by which the carrying amount of the assets exceed the fair
         value of the assets.  Assets to be disposed of are reported at the
         lower of the carrying amount or fair value less costs to sell.  See
         note 7.

                                     F-12
<PAGE>

                        AMARILLO MESQUITE GRILL, INC.

            Notes to Consolidated Financial Statements, Continued

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
     (n)  RECLASSIFICATIONS
          Certain reclassifications have been made to the 1997 and 1996
          amounts to conform to the 1998 presentation, consisting 
          primarily of recruiting and training expenses of $110,000 and
          $75,000 for 1997 and 1996, respectively, which have been 
          reclassified from restaurant operating expenses to general
          and administrative expenses.

(3)  LONG-TERM DEBT
     As of January 25, 1998 and January 26, 1997, long-term debt consisted of
     the following:

<TABLE>
<CAPTION>
                                                                                         1998             1997
                                                                                      -----------      ---------
    <S>                                                                               <C>              <C>
     Note payable to bank, due in monthly installments of $41,161, 
      including interest, beginning June 1998, at prime rate (8.5% at
      January 25, 1998) with final installment due May 2003                           $2,000,000              -
     Note payable to bank, due in monthly installments of $30,871,
      including interest, beginning June 1998, at prime rate (8.5% at 
      January 25, 1998) with final installment due May 2003                            1,500,000              -
     Note payable to bank, due in monthly installments of $32,929, 
      including interest, beginning June 1998, at prime rate (8.5% at 
      January 25, 1998) with final installment due May 2003                            1,400,000              -
     Note payable to bank, due in monthly installments of $27,000, 
      including interest, at prime rate (8.5% at January 25, 1998) 
      with final installment due June 2003                                             1,393,832      1,589,296
     Note payable to bank, due in monthly installments of $4,000, 
      including interest, at prime rate plus 1% (9.5% at January 25, 1998)
      with final installment due November 2000                                           116,068        148,877
     Note payable to bank, due in monthly installments of $5,043, 
      including interest, at prime rate (8.5% at January 25, 1998) 
      with final installment due June 1999                                                80,315              -
     Note payable to bank repaid in fiscal 1998                                                -        650,000
     Note payable to bank repaid in fiscal 1998                                                -        110,000
     Mortgage note, repaid in fiscal 1998                                                      -         23,026
                                                                                      ----------      ---------
                                                                                       6,490,215      2,521,199
     Less current portion                                                                871,936      1,014,778
                                                                                      ----------      ---------
     Long-term debt, less current portion                                             $5,618,279      1,506,421
                                                                                      ----------      ---------
                                                                                      ----------      ---------
</TABLE>


                                     F-13
<PAGE>

                        AMARILLO MESQUITE GRILL, INC.

            Notes to Consolidated Financial Statements, Continued

(3)  LONG-TERM DEBT, CONTINUED
     Principal amounts payable on the above notes during each of the next five
     fiscal years and thereafter are as follows:  1999 - $871,936; 2000 -
     $1,207,900; 2001 - $1,278,703; 2002 - $1,352,215; 2003 - $1,393,736 and
     thereafter - $385,725.

     The Company has entered into loan agreements with its bank which are
     represented by individual promissory notes that provide specific terms. 
     Notes issued pursuant to these loan agreements are secured by substantially
     all of the Company's assets.  The loan agreements have been personally
     guaranteed by certain stockholders, officers and directors of the Company. 
     The Company had $200,000 available under the loan agreements at January 25,
     1998.

(4)  LEASE AGREEMENTS
     The Company leases its restaurant facilities under agreements with lease
     terms of 10 to 20 years generally with a provision for one or two renewal
     options of five years each.  These agreements provide for minimum annual
     rentals and, in certain instances, contingent rentals based on sales
     performance.  The Company is obligated to pay real estate taxes, insurance
     and maintenance.

     The Company has also entered into a lease agreement for its Corporate
     offices.  The lease agreement has a term of five years with a provision for
     two renewal options of three years each.  The lease agreement provides for
     minimum annual rentals and additional rentals based on operating costs
     incurred by the lessor.  The Company is obligated to pay real estate taxes,
     insurance and maintenance.

     Future minimum lease payments required for the years subsequent to 
     January 25, 1998, under operating leases are as follows:

<TABLE>
     <S>                                                   <C>
     1999                                                  $   624,463
     2000                                                      456,088
     2001                                                      440,288
     2002                                                      435,688
     2003                                                      441,559
     Thereafter                                              3,552,313
                                                           -----------
                                                           $ 5,950,399
                                                           -----------
                                                           -----------
</TABLE>

                                     F-14
<PAGE>

                        AMARILLO MESQUITE GRILL, INC.

            Notes to Consolidated Financial Statements, Continued

(4)  LEASE AGREEMENTS, CONTINUED
     Minimum annual rentals under operating leases were $688,784, $928,051 and
     $745,441 for the fiscal years ended January 25, 1998, January 26, 1997 and
     January 28, 1996, respectively.  In addition, the Company made percentage
     rental payments in the amount of $33,631, $28,748 and $880 for the fiscal
     years ended January 25, 1998, January 26, 1997 and January 28, 1996,
     respectively.

     Property and accumulated amortization accounts at January 25, 1998 include
     $1,234,626 and $319,093, respectively, for leases that have been 
     capitalized.  Generally, the building portions of such leases are
     capitalized whereas the land portion of such leases are considered 
     operating leases.  The future minimum lease payment obligations under
     capital leases for the years subsequent to January 25, 1998, are as 
     follows:

<TABLE>
     <S>                                                     <C>
     1999                                                   $  150,778
     2000                                                      150,778
     2001                                                      150,778
     2002                                                      150,778
     2003                                                      150,778
     Thereafter                                              1,472,401
                                                            ----------
                                                             2,226,291
     Less amount representing interest                       1,143,430
                                                            ----------
     Total obligations under capital leases                  1,082,861
     Less current portion                                       36,336
                                                            ----------
     Obligations under capital leases, less 
     current portion                                        $1,046,525
                                                            ----------
                                                            ----------
</TABLE>

     Deferred credits at January 26, 1997 consist of gains on the sale-leaseback
     of properties which have been deferred and are being amortized over the 
     term of the respective lease.

     The Company, as lessor, leases two properties to outside third parties. 
     Property and accumulated depreciation accounts at January 25, 1998 include
     $310,308 and $40,189, respectively, related to these properties.


                                     F-15
<PAGE>

                        AMARILLO MESQUITE GRILL, INC.

            Notes to Consolidated Financial Statements, Continued

(4)  LEASE AGREEMENTS, CONTINUED
     Future minimum lease payments to be received subsequent to January 25, 1998
     are as follows:

<TABLE>
     <S>                                                       <C>
     1999                                                      $ 103,600
     2000                                                        108,600
     2001                                                        113,600
     2002                                                        115,000
     2003                                                        116,000
     Thereafter                                                  234,000
                                                               ---------
                                                               $ 790,800
                                                               ---------
                                                               ---------
</TABLE>

(5)  STOCKHOLDERS' EQUITY
     The Company's President worked on behalf of the Company during 1998, 1997
     and 1996 without receiving compensation from the Company.  The Company
     determined that the President performed services valued at $9,000 which was
     paid by a corporation owned by a major stockholder of the Company. 
     Accordingly, such amount has been recorded as compensation expense with a
     corresponding credit to additional paid-in capital in the accompanying
     consolidated financial statements.  

     On June 17, 1996, the Company entered into Stock Option Agreements with a
     director of the Company and a principal stockholder of the Company, whereby
     it agreed to grant stock options as consideration for the guarantee of the
     note payable to bank of $1,589,296 at January 26, 1997 (see note 3) by such
     individuals for the benefit of the Company.  These two individuals were 
     each granted options to purchase 250,000 shares of the Company's common 
     stock. The exercise price of options granted pursuant to this agreement is
     $2.19 per share, and all options granted are exercisable immediately and 
     expire seven years from the date of grant. Total noncash debt guarantee 
     expense aggregating $684,875 is based on the fair value of the stock 
     options issued pursuant to the Stock Option Agreements which is being 
     recognized as expense over the period of time the related debt is 
     outstanding.  The amount of noncash expense recorded during the year
     ended January 25, 1998 and January 26, 1997 was $97,840 and $61,000,
     respectively.

     The per share weighted average fair value of stock options granted under 
     the Stock Option Agreements during fiscal 1997 was $1.37 on the date of 
     grant using the Black Scholes option-pricing model using the following 
     weighted average assumptions:  expected dividend yield 0%, expected 
     volatility of 145.0%, risk-free interest rate of 6.72% and an expected 
     life of five years.


                                     F-16
<PAGE>

                         AMARILLO MESQUITE GRILL, INC.

             Notes to Consolidated Financial Statements, Continued


(5)  STOCKHOLDERS' EQUITY, CONTINUED
     At January 25, 1998, the weighted average remaining contractual life of the
     500,000 outstanding options under the Stock Option Agreements was 5.38
     years.

     In March 1984, the Company adopted an Employee Incentive Stock Option 
     Plan (the 1984 Plan) for a ten-year term to grant options for the 
     purchase of up to 475,000 shares of common stock.  The 1984 Plan 
     provides that the Company may grant options to certain employees at the 
     fair market value of the stock at the grant date.  One-half of the 
     option is exercisable six months after the grant date and one-half 
     eighteen months after the grant date.  Following is a summary of the 
     activity in the 1984 Plan for the three years ended January 25, 1998:
     
<TABLE>
<CAPTION>
                                                              Per Share Exercise Price
                                            Number of      ------------------------------
                                             Shares            Range     Weighted Average
                                             ------            -----     ----------------
     <S>                                     <C>           <C>                 <C>
     Balance, January 31, 1995               237,300       $ .29 - 2.81        1.06
       Canceled                              (51,300)        .29 - 2.81        2.60
                                             -------        -----------        -----
     Balance, January 28, 1996               186,000         .29 - 1.75         .63
       Canceled                              (35,000)              1.75        1.75
                                             -------        -----------        -----
     Balance, January 26, 1997               151,000       $  .29 - .47         .37
       Canceled                               (2,500)         .29 - .47         .33
       Exercised                              (2,500)               .29         .29
                                             -------        -----------        -----
     Balance, January 25, 1998               146,000       $  .29 - .47         .38
                                             -------        -----------        -----
                                             -------        -----------        -----
     Exercisable at January 26, 1997         151,000          .29 - .47         .37
                                             -------        -----------        -----
                                             -------        -----------        -----
     Exercisable at January 25, 1998         146,000       $  .29 - .47         .38
                                             -------        -----------        -----
                                             -------        -----------        -----
</TABLE>

     At January 25, 1998, there were no additional shares available for grant 
     under the 1984 Plan and the weighted average remaining contractual life 
     of outstanding options was .85 years.

                                    F-17


<PAGE>


                         AMARILLO MESQUITE GRILL, INC.

             Notes to Consolidated Financial Statements, Continued


(5)  STOCKHOLDERS' EQUITY, CONTINUED
     On July 25, 1994, the Company adopted an Employee Incentive Stock Option 
     Plan (the 1994 Plan) for a ten-year term to grant options for the 
     purchase of up to 600,000 shares of common stock.  The 1994 Plan 
     provides that the Company may grant options to certain employees at the 
     fair market value at the grant date.  The vesting period is at the sole 
     discretion of the Board of Directors.  Generally, 10% of the option can 
     be exercised after one year, an additional 15% after the second year and 
     25% in each of the next three years.  Following is a summary of the 
     activity in the 1994 Plan for the three years ended January 25, 1998:

<TABLE>
<CAPTION>
                                                              Per Share Exercise Price
                                            Number of      ------------------------------
                                             Shares            Range     Weighted Average
                                             ------            -----     ----------------
     <S>                                     <C>          <C>                 <C>
     Balance, January 31, 1995                51,467      $ 1.50 - 2.875      2.43
       Granted                               155,366         .84 - 1.940      1.19
       Canceled                              (60,129)       1.44 - 2.875      2.08
                                             -------       -------------      ----
     Balance, January 28, 1996               146,704         .84 - 2.875      1.26
       Granted                               436,776         .50 - 2.190      1.90
       Canceled                              (88,675)        .84 - 1.810      1.13
                                             -------       -------------      ----
     Balance, January 26, 1997               494,805         .50 - 2.875      1.85
       Canceled                             (135,505)        .50 - 2.875      1.12
       Exercised                             (39,937)        .50 - 2.875      1.69
                                             -------       -------------      ----
     Balance, January 25, 1998               319,363      $  1.81 - 2.19      2.17
                                             -------       -------------      ----
                                             -------       -------------      ----
     Exercisable at January 26, 1997           8,490      $  .84 - 2.875      1.74
                                             -------       -------------      ----
                                             -------       -------------      ----
     Exercisable at January 25, 1998          31,936      $  1.81 - 2.19      2.17
                                             -------       -------------      ----
                                             -------       -------------      ----
</TABLE>

     At January 25, 1998, there were 105,195 additional shares available for
     grant under the 1994 Plan and the weighted average remaining contractual
     life of outstanding options was 8.48 years.
     

                                      F-18

<PAGE>


                         AMARILLO MESQUITE GRILL, INC.

             Notes to Consolidated Financial Statements, Continued


(5)  STOCKHOLDERS' EQUITY, CONTINUED
     On January 1, 1997, the Company adopted an Employee Incentive Stock 
     Option Plan (the 1997 Plan) for a ten-year term to grant options for the 
     purchase of up to 700,000 shares of stock.  The 1997 Plan provides that 
     the Company may grant options to certain employees at the fair market 
     value at the grant date.  The vesting period is at the sole discretion 
     of the Board of Directors.  Generally, 10% of the option can be 
     exercised after one year, an additional 15% after the second year and 
     25% in each of the next three years.  Following is a summary of the 
     activity in the 1997 Plan for the two years ended January 25, 1998:

<TABLE>
<CAPTION>
                                                              Per Share Exercise Price
                                            Number of      ------------------------------
                                             Shares            Range     Weighted Average
                                             ------            -----     ----------------
     <S>                                     <C>          <C>               <C>
     Balance, January 28, 1996                      -     $           -          -
       Granted                                160,000              2.75       2.75
                                             --------      ------------       ----
     Balance, January 26, 1997                160,000              2.75       2.75
       Granted                                253,250       2.75 - 4.13       3.70
       Canceled                              (105,000)      2.75 - 4.13       3.00
                                             --------      ------------       ----
     Balance, January 25, 1998                308,250     $ 2.75 - 4.13       3.44
                                             --------      ------------       ----
                                             --------      ------------       ----
     Exercisable at January 26, 1997                -     $           -          -
                                             --------      ------------       ----
                                             --------      ------------       ----
     Exercisable at January 25, 1998            8,500     $        2.75       2.75
                                             --------      ------------       ----
                                             --------      ------------       ----
</TABLE>

     At January 25, 1998, there were 286,750 additional shares available for
     grant under the 1997 Plan and the weighted average remaining contractual
     life of outstanding options was 9.38 years.

     The per share weighted average fair value of stock options granted under 
     the 1994 and 1997 Plans during fiscal 1998, 1997 and 1996 was $3.29, 
     $1.94 and $1.08, respectively, on the date of grant using the Black 
     Scholes option-pricing model using the following weighted average 
     assumptions:  

<TABLE>
<CAPTION>
                                                 1998       1997       1996
                                                 ----       ----       ----
     <S>                                        <C>       <C>        <C>
     Expected dividend yield                         0%        0%         0%
     Volatility factor                           136.0%    145.0%     145.0%
     Risk free interest rate                      6.15%     6.47%      6.22%
     Expected life                              5 years   5 years    5 years
</TABLE>


                                      F-19

<PAGE>


                         AMARILLO MESQUITE GRILL, INC.

             Notes to Consolidated Financial Statements, Continued


(5)  STOCKHOLDERS' EQUITY, CONTINUED
     The Company applies APB Opinion No. 25 in accounting for its stock 
     options issued to employees and, accordingly, no compensation cost has 
     been recognized for its stock options in the financial statements.  Had 
     the Company determined compensation cost for the 1994 Plan and the 1997 
     Plan based on the fair value at the grant date for its stock options 
     under SFAS No. 123, the Company's fiscal 1998, 1997 and 1996 pro forma 
     net loss and pro forma net loss per common share would have been 
     adjusted to the pro forma amounts indicated below.

<TABLE>
<CAPTION>
                                                        1998         1997         1996
                                                        ----         ----         ----
     <S>                                            <C>           <C>           <C>
     Net loss        As reported                    $(1,270,293)  (1,586,275)   (175,341)
                     Pro forma for SFAS No. 123      (1,547,009)  (1,681,310)   (188,907)

     Loss per share  As reported                    $      (.18)        (.24)       (.03)
                     Pro forma for SFAS No. 123            (.22)        (.25)       (.03)
</TABLE>

     The above pro forma disclosure reflects only options granted during 
     fiscal years 1998, 1997 and 1996.  Therefore, the full impact of 
     calculating compensation cost for stock options under SFAS No. 123 is 
     not reflected in the pro forma net loss amounts presented above because 
     compensation cost is reflected over the options' vesting period of five 
     years and compensation cost for options granted prior to February 1, 
     1995 is not considered.

(6)  INCOME TAXES
     As of January 25, 1998, the Company has net operating loss carryforwards 
     for income tax purposes of approximately $6,476,000 which, if not used, 
     will expire $552,000 in fiscal 2001, $984,000 in fiscal 2002, $1,193,000 
     in fiscal 2003, $434,000 in fiscal 2004, $134,000 in fiscal 2005, $7,000 
     in fiscal 2006, $180,000 in fiscal 2008, $44,000 in fiscal 2009, 
     $116,000 in fiscal 2011, $1,524,000 in fiscal 2012, and $1,308,000 in 
     fiscal 2013.

     The Company also has approximately $108,000 of investment tax credit 
     carryforwards available which, if not used, will expire $27,000 in 
     fiscal 1999, $72,000 in fiscal 2000 and $9,000 in fiscal 2001.

                                     F-20

<PAGE>
                           AMARILLO MESQUITE GRILL, INC.
                                          
                  Notes to Consolidated Financial Statements, Continued


 (6) INCOME TAXES, CONTINUED
     The total provision for income taxes varied from the Federal statutory rate
     for the following reasons:

<TABLE>
<CAPTION>
                                                     1998       1997     1996
                                                     ----       ----     ----
     <S>                                              <C>       <C>      <C>
     Computed "expected" tax benefit                  (34.0)%   (34.0)%  (34.0)%
     Increase in income taxes resulting from:
      Losses producing no financial statement
       tax benefit                                     34.0%     34.0%    34.0%
                                                      -----     -----    -----
                                                          -%        -%       -%
                                                      -----     -----    -----
                                                      -----     -----    -----
</TABLE>

     The tax effects of temporary differences that give rise to significant
     portions of the deferred tax assets and deferred tax liabilities at January
     25, 1998 and January 26, 1997 are presented below:

<TABLE>
<CAPTION>
                                                      1998           1997
                                                      ----           ----
     <S>                                          <C>              <C>
     Deferred tax assets:
       Net operating loss carryforwards           $ 2,460,880      2,037,075
       Investment tax credits                         108,000        108,000
       Capital leases                                  62,825        124,380
       Accrual for restaurant closing                       -         33,555
       Debt guarantee expense                          37,179         23,180
       Other                                           14,392         13,280
                                                  -----------     ----------
          Total gross deferred tax assets           2,683,276      2,339,470
          Less valuation allowance                 (2,518,904)    (2,189,918)
                                                  -----------     ----------
          Net deferred tax assets                     164,372        149,552
                                                  -----------     ----------
     Deferred tax liabilities:
       Property and equipment, principally due to
         differences in depreciation              $  (164,372)      (149,552)
                                                  -----------     ----------

          Net deferred tax assets (liabilities)   $         --            --
                                                  -----------     ----------
                                                  -----------     ----------
</TABLE>

                                     F-21
<PAGE>
                           AMARILLO MESQUITE GRILL, INC.
                                          
                  Notes to Consolidated Financial Statements, Continued

 (7) PROVISION FOR RESTAURANT CLOSINGS, DISPOSITIONS AND CONVERSIONS
     The Company closed three Cotton Patch Cafe restaurants during fiscal 1998,
     all of which have been converted to Amarillo Grill restaurants as of 
     January 25, 1998.

     The Company closed three Cotton Patch Cafe restaurants during 1997, one of
     which was sold, one of which was converted to an Amarillo Grill restaurant
     which opened in fiscal 1997 and one was converted to an Amarillo Grill
     restaurant which opened in fiscal 1998.  The Company also decided during
     fiscal 1997 to discontinue operations of two Grandy's restaurants in fiscal
     1998.  Provision for restaurant closings, dispositions and conversions in
     the accompanying 1997 statement of operations of $518,321 relates
     principally to the write-off of property and equipment, license fees and
     intangible assets.

 (8) FAIR VALUE OF FINANCIAL INSTRUMENTS
     The Company has determined the fair value of its financial instruments in
     accordance with Statement of Financial Accounting Standards No. 107,
     DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS.  The carrying 
     amounts of variable rate debt instruments approximate their fair value 
     because the interest rates on these instruments change with market interest
     rates.  For all other financial instruments including cash, accounts 
     receivable, accounts payable and other accrued liabilities, the carrying 
     amounts approximate fair value because of the short maturity of these 
     instruments.

 (9) BUSINESS ACQUISITION
     Effective June 17, 1996, the Company purchased substantially all of the
     operating assets and business operations of Homestead West, Inc. and
     Amagril, Inc. for an initial cash payment of $1,500,000.  In addition,
     1,000,000 shares of the Company's $.01 par value common stock was issued at
     an estimated fair value of $.30 per share.  The acquisition has been
     accounted for by the purchase method of accounting and, accordingly, the
     operations of Homestead West, Inc. and Amagril, Inc. have been included in
     the accompanying statements of operations subsequent to June 17, 1996.  The
     initial purchase price has been allocated to the assets acquired based on
     their estimated fair values at the date of acquisition.  Cost in excess of
     fair value of net tangible assets of purchased businesses arising from the
     acquisition amounted to $947,011.

                                     F-22
<PAGE>
                           AMARILLO MESQUITE GRILL, INC.
                                          
                  Notes to Consolidated Financial Statements, Continued

 (9) BUSINESS ACQUISITION, CONTINUED
     The following table summarizes the pro forma results of operations for the
     fifty-two weeks ended January 26, 1997 and January 28, 1996 as if the
     acquisition had been consummated at the beginning of fiscal 1997 and 1996.
     The pro forma results do not necessarily reflect what would have occurred 
     if the acquisition had been made at the beginning of the respective periods
     or the results that may occur in the future.

<TABLE>
<CAPTION>
                                                  1997               1996
                                                  ----               ----
     <S>                                      <C>                  <C>
     Net sales                                $ 16,257,436         16,113,185
     Net earnings (loss)                      $ (1,470,582)             1,149
     Net earnings (loss) per common share - 
       basic and diluted                      $       (.21)                --
</TABLE>

     In connection with the acquisition, the Company entered into an Option to
     Purchase Agreement with the seller which grants the seller the option to
     purchase the assets acquired after four years from the date of the
     acquisition.  The option is exercisable for a 90-day period and the 
     purchase price will be equal to the price paid by the Company plus all 
     amounts expended by the Company for capital improvements on the restaurants
     during the four-year period.

(10) LIQUIDITY
     At January 25, 1998, the Company had current liabilities in excess of
     current assets of $2,233,625 and a stockholders' deficit of $582,423.  The
     Company reported a net loss of $1,270,293 and cash used in operating
     activities of $626,911 for fiscal 1998.

     Management believes the Amarillo Grill restaurants opened in fiscal 1998
     will generate sufficiently increased cash flow from operations which,
     together with remaining available borrowing capacity (see note 3), will
     enable the Company to meet its financial obligations in fiscal 1999 as they
     come due.  In the event operating cash flow and remaining borrowing 
     capacity are not sufficient to enable the Company to meet its financial 
     obligations in fiscal 1999, an individual who is a major stockholder and 
     director of the Company has committed to provide up to $1,000,000 of 
     additional capital or guarantees of additional indebtedness on behalf of 
     the Company.

                                     F-23
<PAGE>
                           AMARILLO MESQUITE GRILL, INC.
                                          
                  Notes to Consolidated Financial Statements, Continued

(11) SALE OF GRANDY'S RESTAURANTS
     As noted in note 1, the Company sold all of the assets of the eight 
     Grandy's restaurants owned and operated by the Company.

     The following presents the net sales and operating income, before 
     allocation of corporate overhead, of the above restaurants which are 
     included in the accompanying statements of operations for the fiscal 
     years ended January 25, 1998, January 26, 1997 and January 28, 1996.

<TABLE>
<CAPTION>
                                            1998        1997          1996
                                            ----        ----          ----
     <S>                                 <C>          <C>          <C>
     Net sales                            $803,734    5,102,205    5,204,724

     Operating income                     $ 47,227       36,013      209,504
</TABLE>

     The significant financial statement amounts related to Grandy's which are
     included in the balance sheet at January 26, 1997 are as follows:

<TABLE>
     <S>                                                     <C>
     Assets:
       Net property and equipment                            $  464,696
       Goodwill, net                                         $  107,975
       License fees, net                                     $   10,228

     Liabilities:
       Obligations under capital leases                      $  481,055
       Deferred credits                                      $    6,789
</TABLE>

(12) SUBSEQUENT EVENT
     Effective February 23, 1998, the Company purchased the remaining shares of
     AMG, Inc. by issuing 450,000 shares of the Company's common stock in a
     transaction accounted for as a book value purchase.

     The interest in AMG, Inc. acquired by the Company had no book value after
     consideration of the losses absorbed by the Company in fiscal 1998. 
     Accordingly, this book value purchase will result in no additional assets 
     or liabilities being established, and consolidated stockholders' equity 
     will reflect the issuance of the shares of common stock at par value, with 
     an offsetting reduction to additional paid-in capital.

                                     F-24
<PAGE>
                                    EXHIBIT INDEX


     3.1       Restated Articles of Incorporation of Grandy's of El Paso, Inc.
               and Change of Corporate Name to Maverick Restaurant Corporation
               and Certificate of Correction to Restated Articles of
               Incorporation of Grandy's of El Paso, Inc. changing the Corporate
               Name to Maverick Restaurant Corporation as filed with the
               Secretary of State of the State of Kansas on July 28, 1983 and
               August 18, 1983, respectively (filed as Exhibit 3.1 to
               Registration No. 2-86266-FW and such exhibit is hereby
               incorporated by reference).

     3.2       Certificate of Amendment to Articles of Incorporation as filed
               with the Secretary of State of the State of Kansas on May 22,
               1984 (filed as Exhibit 3.2 to the Company's Form 10-K for the
               fiscal year ended January 31, 1985, and such exhibit is hereby
               incorporated by reference).

     3.3       Certificate of Amendment to Articles of Incorporation as filed
               with the Secretary of State of the State of Kansas on May 27,
               1997 changing the corporate name to Amarillo Mesquite Grill, Inc.
               (filed herewith).

     3.4       Bylaws of the Company (filed as Exhibit 3.2 to Registration No.
               2-86266-FW and such exhibit is hereby incorporated by reference).


    10.1       Asset Purchase Agreement dated June 14, 1996 between Homestead
               West, Inc., Amagril, Inc. and the Company (filed as Exhibit 10.1
               to the Company's Form 8-K dated June 17, 1996 and such exhibit is
               hereby incorporated by reference).

    10.2       Stock Option Agreement dated June 17, 1996 between the Company
               and C. Howard Wilkins, Jr. and amendment thereto (filed as
               Exhibit 10.2 to the Company's Form 10-K for the fiscal year ended
               January 26, 1997 and such exhibit is hereby incorporated by
               reference).

    10.3       Stock Option Agreement dated June 17, 1996 between the Company
               and Robert A. Geist and amendment thereto (filed as Exhibit 10.3
               to the Company's Form 10-K for the fiscal year ended January 26,
               1997 and such exhibit is hereby incorporated by reference).

   10.4        Agreement dated February 23, 1998 between the Company and
               Robert A. Geist, C. Howard Wilkins, Jr., the Wilkins Family
               Foundation, Inc., General Resources, L.P., Tom Devlin and
               Andy Mouland (filed as Exhibit 10.1 to the Company's Form 
               8-K dated March 27, 1998 and such exhibit is hereby
               incorporated by reference).

                                      (i)

<PAGE>

   10.5        1994 Incentive Stock Option Plan (filed as Exhibit 10.9 to the
               Company's Form 10-K for the fiscal year ended January 31, 1995
               and such exhibit is hereby incorporated by reference).

   10.6        1997 Incentive Stock Option Plan (filed as Exhibit A to the
               Company's Proxy Statement dated April 23, 1997 and such exhibit
               is hereby incorporated by reference).

   23         Consent of KPMG Peat Marwick LLP (filed herewith).

___________________
          Management's Compensation Plan

                                   


                                      (ii)