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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934


(MARK ONE)

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

For the Fiscal Year Ended April 27, 2003

OR

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

For the transition period from           to

Commission File Number: 0-28930

ROADHOUSE GRILL, INC.

(Exact Name of Registrant as Specified in its Charter)


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

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

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

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

|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of Each Class |  | Name of Each Exchange on Which Registered
|                    |  |                                          
|NONE                |  | NOT APPLICABLE                           

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

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to item
405 of regulation S-K is not contained herein, and will not be contained, to
the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [  ]





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

The aggregate market value of the voting common stock held by
non-affiliates of the registrant as of July 23, 2003 (based upon the last
reported sale price of the registrants common stock on the Pink Sheets on July
23, 2003), was $1,750,525 (calculated by excluding shares owned beneficially by
the Companys principal stockholder, as well as the Companys directors and
executive officers as a group, from total outstanding shares solely for the
purpose of this response).

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

The number of shares of the registrants common stock outstanding as of
July 23, 2003 was 29,220,663.

DOCUMENTS INCORPORATED BY REFERENCE

None.





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|                                                   |                                                                                                         |                                                                    |  |  |  |  |  | 
|-------------------------------------------------- | ------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ |  |  |  |  |  | 
|                                                   | ITEM 1. BUSINESS                                                                                       
|                                                   | ITEM 2. PROPERTIES                                                                                     
|                                                   | ITEM 3. LEGAL PROCEEDINGS                                                                              
|                                                   | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                            
|PART II                                           
|                                                   | ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                          
|                                                   | ITEM 6. SELECTED FINANCIAL DATA                                                                        
|                                                   | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS          
|                                                   |                                                                                                         | ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|                                                   | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                    
|                                                   | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE           
|PART III                                          
|                                                   | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                            
|                                                   | ITEM 11. EXECUTIVE COMPENSATION                                                                        
|                                                   | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|                                                   | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                
|                                                   | ITEM 14. CONTROLS AND PROCEDURES                                                                       
|PART IV                                           
|                                                   | ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K                              
|SIGNATURES                                        
|EXHIBIT INDEX                                     
|EX-3.1 Amend. & Restated Articles of Incorporation
|EX-10.21 Stock Option Plan                        
|EX-99.1 Certification Under Section 302           
|EX-99.2 Certification Under Section 906           



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ROADHOUSE GRILL, INC.

FORM 10-K
FISCAL YEAR ENDED APRIL 27, 2003

INDEX

|         |  |                                                                                                |  |     
|-------- |  | ---------------------------------------------------------------------------------------------- |  | ----
|         |  |                                                                                                |  | Page
|         |  |                                                                                                |  |     
|PART I   |  |                                                                                                |  |     
|Item 1.  |  | Business                                                                                       |  | 4   
|Item 2.  |  | Properties                                                                                     |  | 29  
|Item 3.  |  | Legal Proceedings                                                                              |  | 30  
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                            |  | 31  
|PART II  |  |                                                                                                |  |     
|Item 5.  |  | Market for Registrants Common Equity and Related Stockholder Matters                          |  | 32  
|Item 6.  |  | Selected Financial Data                                                                        |  | 34  
|Item 7.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations          |  | 36  
|Item 7A. |  | Quantitative and Qualitative Disclosures about Market Risk                                     |  | 51  
|Item 8.  |  | Financial Statements and Supplementary Data                                                    |  | 51  
|Item 9.  |  | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure           |  | 51  
|PART III |  |                                                                                                |  |     
|Item 10. |  | Directors and Executive Officers of the Registrant                                             |  | 52  
|Item 11. |  | Executive Compensation                                                                         |  | 54  
|Item 12. |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |  | 58  
|Item 13. |  | Certain Relationships and Related Transactions                                                 |  | 60  
|Item 14. |  | Controls and Procedures                                                                        |  | 61  
|PART IV  |  |                                                                                                |  |     
|Item 15. |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                               |  | 63  

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FORWARD LOOKING STATEMENTS

This report contains forward looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements concern
expectations, beliefs, projections, future plans and strategies, anticipated
events or trends and similar expressions concerning matters that are not
historical facts. Statements preceded by, followed by, or that include the
words believes, expects, anticipates, or similar expressions are
generally considered to be forward-looking statements. Specifically, this
report contains forward-looking statements, including statements relating to
the following:



| |  |  | the Companys implementation of the roadhouse-style dining concept;                                                                                                                                                               
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | anticipated trends in the economy and the restaurant industry;                                                                                                                                                                    
|
| |  |  | the Companys strategies, plans, objectives and expectations
concerning the Companys future market position, operations, cash flow,
margins, revenue, profitability, restaurant-level economics, liquidity
and capital resources;
|
| |  |  | the impact of the Companys reorganization under Chapter 11 of the
Bankruptcy Code;                                                                                                                                               
|
| |  |  | the Companys ability to manage its debt and comply with the terms
of its debt instruments, operating leases and capital leases;                                                                                                  
|
| |  |  | the Companys ability to maintain financial and accounting
controls, management controls, reporting systems and procedures;                                                                                                       
|
| |  |  | the Companys ability to further develop its business beyond its existing restaurants;                                                                                                                                            
|
| |  |  | the Companys ability to recruit, train and retain management personnel;                                                                                                                                                          
|
| |  |  | the Companys ability to manage labor, food costs and other
operating expenses and to operate its restaurants on a profitable
basis;                                                                                              
|
| |  |  | costs associated with opening, or completing construction on, new
restaurants; and                                                                                                                                                
|
| |  |  | the Companys ability to locate suitable franchisees in markets
which it does not serve to develop restaurants in those markets.                                                                                                  

The forward-looking statements reflect the Companys current view about
future events and are subject to risks, uncertainties and assumptions. The
Company wishes to caution readers that certain important factors may have
affected and could in the future affect its actual results and could cause
actual results to differ significantly from those expressed in any
forward-looking statement. The following important factors, in addition to
factors the Company discusses elsewhere in this report, including the section
entitled Risk Factors, could prevent the Company from achieving its goals,
and cause the assumptions underlying the forward-looking statements and the
actual results to differ materially from those expressed in or implied by those
forward-looking statements:



| |  |  | the Companys ability to make future debt, capital lease and
operating lease payments;       
| | - |  | ---------------------------------------------------------------------------------------------
|
| |  |  | the Companys ability to comply with its debt instruments and lease
agreements in the future;
|
| |  |  | availability of additional financing;                                                        
|
| |  |  | relisting of the Companys stock;                                                            
|
| |  |  | outcome of the SEC inquiry;                                                                  

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| |  |  | net losses;                                                                                                                                   
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the Companys ability to identify suitable locations and open new
restaurants or locate suitable franchisees;                                 
|
| |  |  | the Companys ability to acquire adequate food supply and to obtain
favorable food costs;                                                     
|
| |  |  | changes in consumer preferences, tastes and eating habits;                                                                                    
|
| |  |  | the availability of qualified labor and the Companys ability to
control its labor costs effectively;                                         
|
| |  |  | competition from other restaurants;                                                                                                           
|
| |  |  | international conflicts involving the United States and their
effect on domestic economic conditions;                                         
|
| |  |  | construction delays;                                                                                                                          
|
| |  |  | events that may impact the cost of food or other products used in
the Companys operations such as the impact of instances of Mad Cow
Disease;
|
| |  |  | increase in interest rates; and                                                                                                               
|
| |  |  | national, regional and local economic and weather conditions.                                                                                 

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ITEM 1. BUSINESS

GENERAL

The Company operates, franchises and licenses high-quality full-service
casual dining restaurants under the name Roadhouse Grill.

The Company is a Florida corporation founded in 1992 which opened its
first Roadhouse Grill restaurant in Pembroke Pines, Florida (the greater Fort
Lauderdale area) in 1993. As of April 27, 2003, there were 70 Company owned
Roadhouse Grill restaurants located in Alabama, Arkansas, Florida, Georgia,
Louisiana, Mississippi, New York, North Carolina, Ohio, and South Carolina. Of
these, 35 are located in Florida. Subsequent to April 27, 2003, an additional
new restaurant opened in North Carolina. The Company also has three franchised
locations in Malaysia, one franchised location in Brasilia, Brazil, one
franchised location in Las Vegas, Nevada, one franchised location in
Cincinnati, Ohio and four joint venture restaurants in Italy,
including one which was opened subsequent to April 27, 2003.

The Companys primary business is the operation of full-service, casual
dining restaurants targeted toward singles, couples, families and senior
citizens. Roadhouse Grill restaurants offer a diverse, moderately priced lunch
and dinner menu highlighting exhibition cooking of steaks and other grilled
entrees. In addition to steaks and other grilled items, the restaurants
feature daily fresh baked yeast rolls, free peanuts and certain appetizers as
signature items. Guest satisfaction comes from a pleasant restaurant
atmosphere in which high-quality food and beverages are served at competitive
prices. The Company motivates its employees to provide friendly and efficient
service on a consistent basis.

The key elements that define the Roadhouse Grill concept are:



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

4



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

RECENTLY COMPLETED PROCEEDINGS UNDER CHAPTER 11 OF THE BANKRUPTCY CODE

On January 18, 2002 (the Petition Date), an involuntary petition (the
Involuntary Petition) for relief under Chapter 11 of the United States
Bankruptcy Code (the Bankruptcy Code) was filed against the Company by
certain of its creditors, all of which were affiliated with one another
(collectively, the Petitioning Creditors), in the United States Bankruptcy
Court for the Southern District of Florida (the Court). Prior to the
Petition Date, the Company had been experiencing significant cash flow problems
primarily resulting from the opening of 31 new restaurants in the prior three
years combined with a net loss of $15.9 million in fiscal year 2001 and a net
loss of $21.4 million in fiscal year 2002. Prior to the filing of the
Involuntary Petition, the Company had been in negotiations with the Petitioning
Creditors and its other major creditors in an effort to effect an out-of-court
restructuring of its liabilities.

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

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

In its plan of reorganization, the Company classified the claims of its
creditors and interests of its equity security holders and provided for the
treatment of such claims and interests. Under the Bankruptcy Code, various
classes of claims and interests were entitled to vote on whether to accept or
reject the plan of reorganization. On June 12, 2002, the Company filed
Debtors Second Amended and Restated Chapter 11 Plan of Reorganization, as
Modified (the Plan) and Debtors Second Amended and Restated Disclosure
Statement in Support of Chapter 11 Plan of Reorganization, as Modified (the
Disclosure Statement). The Court conducted a hearing on June 12, 2002 to
consider approval of the Disclosure Statement. On June 20, 2002, the Court
issued an order approving the Disclosure Statement, authorizing the Disclosure

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Statement, Plan and ballot to be disseminated to creditors and equity security
holders and scheduling a hearing on confirmation of the Plan for August 21,
2002.

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

Thereafter, Restaurants Acquisition I, Inc., an entity affiliated with the
Petitioning Creditors, filed a competing plan of reorganization, dated July 15,
2002 (the RAI Plan). The Petitioning Creditors and creditors affiliated with
them (collectively, CNL) vigorously opposed confirmation of the Plan. In
addition, certain other creditors initially cast ballots rejecting the Plan
and/or filed objections to confirmation of the Plan.

As the date of the confirmation hearing approached, the Company engaged in
further negotiations with rejecting and objecting creditors in an effort to
resolve their objections to the Plan. By August 19, 2002, most of the
objections had been resolved and the Company filed a modification of the Plan
reflecting the resolution of those objections (the Modification).

As of August 19, 2002, the principal remaining objections were the
objections of CNL. However, the Company reached agreement with CNL shortly
before the commencement of the confirmation hearing. Under the agreement, CNL
withdrew its objections to the Plan, changed its rejections to acceptances of
the Plan and caused the RAI Plan to be withdrawn. The agreement was embodied
in a term sheet between the Company and CNL dated August 21, 2002 (the Term
Sheet).

The hearing on confirmation of the Plan, as modified by the Modification
and the Term Sheet, took place on August 21, 2002. At the close of the
hearing, the Court announced that the Plan, as modified by the Modification,
the Term Sheet and the Confirmation Order (as hereinafter defined) (the
Confirmed Plan of Reorganization), would be confirmed. On August 23, 2002,
the Court issued its Order Confirming Debtors Second Amended and Restated
Chapter 11 Plan of Reorganization, as Modified (the Confirmation Order).

The Confirmed Plan of Reorganization became effective on September 20,
2002 (the Effective Date). Under the Confirmed Plan of Reorganization, the
Company received an infusion of new capital of $5.0 million in exchange for
13,888,889 shares of the authorized but unissued common stock of the Company,
constituting 47.53% of the outstanding stock of the reorganized Company. The
13,888,889 shares were issued in a private placement pursuant to Section 4(2)
of, and Regulation D promulgated under, the Securities Act of 1933, as amended
(the Private Placement Securities). The Private Placement Securities were
issued to Berjaya Group (Cayman) Limited (Berjaya), Prime Gaming Philippines,
Inc. (Prime), Tonto Capital Partners GP, and Stephen C. Saterbo (Saterbo),
as more particularly set forth in the table immediately below and reflecting
the post-restructuring percentage ownership for each respective investment.

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|                          |  |            |           |             |  |                  |      |           |  |  |           |  |  |            |       |  
|------------------------- |  | ---------- | --------- | ----------- |  | ---------------- | ---- | --------- |  |  | --------- |  |  | ---------- | ----- | -
|                          |  |            |           |             |  |                  |      |           |  |  |           |  |  | Percentage
|                          |  | Investment |           | Price/Share |  | Number of Shares |      | Ownership
|                          |  |            |           |             |  |                  |      |          
|Berjaya                   |  | $          | 3,000,000 |             |  | $                | 0.36 |           |  |  | 8,333,333 |  |  |            | 28.52 | %
|Prime                     |  |            | 500,000   |             |  |                  | 0.36 |           |  |  | 1,388,889 |  |  |            | 4.75  | %
|Tonto Capital
Partners GP |  |            | 1,000,000 |             |  |                  | 0.36 |           |  |  | 2,777,778 |  |  |            | 9.51  | %
|Saterbo                   |  |            | 500,000   |             |  |                  | 0.36 |           |  |  | 1,388,889 |  |  |            | 4.75  | %

Berjaya is the Companys majority shareholder, representing, with its
affiliates, ownership of approximately 66.5% of the Companys outstanding
Common Stock. It is headquartered in Malaysia. Prime is an affiliate of
Berjaya. It is 70% owned by Berjaya Group Berhad, which owns 100% of Berjaya.
Prime is headquartered in the Philippines. Tonto Capital Partners GP is
affiliated with Ayman Sabi, the Companys Chief Executive Officer, President,
and a director. See Item 13. Certain Relationships and Related Transactions.
Saterbo is a senior vice president, member of the board of directors, and
substantial shareholder of Colorado Boxed Beef Company, a former major supplier
to the Company.

Additionally, pursuant to the Confirmed Plan of Reorganization Berjaya
received, in full satisfaction of a $1.5 million loan to the Company, 4,166,667
shares of the Companys authorized but unissued common stock at $0.36 per
share, representing 14.26% of the outstanding stock of the reorganized Company.

In accordance with the Confirmed Plan of Reorganization, each existing
holder of Common Stock received additional Common Stock equal to 15% of the
shares which they previously held. After issuance of the additional shares,
the existing shareholders own an aggregate of 11,165,107 shares of the
outstanding common stock, representing 38.21% of the outstanding stock of the
reorganized Company. The total number of shares of common stock outstanding
after effecting the Confirmed Plan of Reorganization is 29,220,663.

Under bankruptcy law, actions by creditors to collect indebtedness owed
prior to the Petition Date and/or prior to the Relief Date were stayed and
certain other pre-petition and Gap (January 18, 2002 through April 16, 2002,
which is the period of time between the Petition Date and the Relief Date)
contractual obligations could not be enforced against the Company. The Company
received approval from the Court to pay certain pre-petition and gap
liabilities including employee salaries and wages, benefits, and other employee
obligations. Liabilities through the date the Company emerged from bankruptcy,
September 20, 2002, which were incurred pre-petition or during the gap period
had previously been classified as liabilities subject to compromise. With the
Company having emerged from bankruptcy, these liabilities were adjusted during
the fifty-two weeks ended April 27, 2003 to the amounts to be paid pursuant to
the Confirmed Plan of Reorganization. As a result, the Company has recorded an
extraordinary gain relating to the early extinguishment of debt in the
accompanying consolidated

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statements of operations in the amount of $1.9
million for the fifty-two weeks ended April 27, 2003. This gain results
primarily from obligations to pay lease obligations that were stayed while
the Company was in bankruptcy and other obligations that were canceled as
a result of the bankruptcy proceeding.

As of April 27, 2003, substantially all bankruptcy claims have been
resolved. See Note 9 of Notes to Consolidated Financial Statements for a
description of the debt agreements that have been executed in settlement of
certain bankruptcy claims. Currently, the Company is working to resolve
certain remaining open bankruptcy claims. Settlement of these claims could
result in the execution of additional debt agreements pursuant to the
provisions of the Plan of Reorganization and the recognition of additional
extraordinary gains or losses to the extent that the final settlement amount
differs from the liabilities currently recorded in the Companys Consolidated
Balance Sheet. However, these remaining open bankruptcy claims are not
considered material to the Companys financial position and any extraordinary
gain or loss that may result is not expected to be material to the Companys
future consolidated results of operations.

As restructured under the Confirmed Plan of Reorganization, the Companys
secured and unsecured debt, as well as assumed leases and executory contracts,
will require substantial monthly payments over extended future periods. The
Companys future success will depend, in part, on its ability to meet these
payment obligations. There is no assurance that the Company will be able to do
so.

The Company has incurred $3.6 million of expenses relating to its
reorganization, including $2.7 million and $0.9 million, respectively, during
the fifty-two weeks ended April 27, 2003 and April 28, 2002. These expenses
primarily include fees for legal, accounting, consulting, and outside services.
Additionally, on the Petition Date, the Company stopped accruing interest on
all unsecured pre-petition debt in accordance with SOP 90-7. With the
confirmation of its Plan of Reorganization, the Company is now required to make
regular payments on all debt pursuant to the Confirmed Plan of Reorganization.

RISK FACTORS

THE COMPANY HAS RECENTLY EMERGED FROM BANKRUPTCY AND THERE CAN BE NO ASSURANCE
THAT IT CAN SUCCESSFULLY EXECUTE ITS PLAN OF REORGANIZATION

The Confirmed Plan of Reorganization became effective September 20, 2002.
As restructured under the Confirmed Plan of Reorganization, the Companys
secured and unsecured debt, as well as assumed leases and executory contracts,
now require substantial monthly payments. The Companys ability to operate
successfully will depend on, among other things, its ability to meet future
payment obligations over the extended periods. The Company currently has no
available credit line or other instrument to provide operating capital. As
such, it depends upon cash flow from operations and from asset sales to support
its capital and operating requirements. There can be no assurance that the
future cash flows of the Company will be sufficient to fund these obligations.

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The effect, if any, which the Companys bankruptcy proceedings had on its
operations cannot be accurately predicted or quantified. The Company believes
that its bankruptcy and consummation of the Confirmed Plan of Reorganization
did not have a material impact on its relationships with its customers,
employees or suppliers. Nevertheless, there could be a detrimental impact on
future sales and patronage because of the negative image of the Company that
may have been created by its bankruptcy.

OWNERSHIP OF APPROXIMATELY 66.5% OF THE COMPANYS OUTSTANDING COMMON STOCK BY
ONE SHAREHOLDER WILL LIMIT OTHER SHAREHOLDERS ABILITY TO INFLUENCE CORPORATE
MATTERS.

At April 27, 2003, Berjaya beneficially owned, directly or indirectly,
approximately 66.5% of the Companys outstanding common stock.
See Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters. As a result,
Berjaya is able to control major decisions of corporate policy, elect the
Companys entire board of directors and determine the outcome of any major
transaction or other matters submitted to the Companys shareholders, including
potential mergers or acquisitions, and amendments to the Companys articles of
incorporation. Shareholders other than Berjaya are therefore likely to have
little or no influence on decisions regarding such matters. Third parties may
be discouraged from making a tender offer or bid to acquire the Company because
of this concentration of ownership.

THE COMPANY HAS EXPERIENCED SIGNIFICANT LOSSES AND CASH FLOW PROBLEMS IN THE
PAST.

The Company has experienced recent significant operating losses and cash
flow problems. The Company currently has no available credit line or other
instrument to provide operating capital. As such, it depends upon cash flow
from operations and from asset sales to support its capital and operating
requirements. There can be no assurance that the Company will be able to
achieve and sustain sufficient positive cash flow to support its operations or
expansion.

THE COMPANYS PROFITABILITY IS DEPENDENT IN LARGE MEASURE ON FOOD AND SUPPLY
COSTS WHICH ARE NOT WITHIN THE COMPANYS CONTROL.

The Companys profitability is dependent in large measure on its ability
to anticipate and react to changes in food and supply costs. Various factors
beyond the Companys control, including climatic changes, disease or illness in
beef cattle that could impact supply in the marketplace and government
regulations, may affect food costs. Specifically, the Companys dependence on
frequent, timely deliveries of beef, poultry, seafood and produce subjects it
to the risks of possible shortages or interruptions in supply caused by adverse
weather or other conditions which could adversely affect the availability and
cost of any such items. While the Company believes that it has been able to
anticipate and react to increasing food costs through purchasing practices,
menu changes and price adjustments in the past, there can be no assurance that
the Company will be able to do so in the future. The failure to react to these
increases could materially and adversely affect the Companys business and
result of operations in future periods.

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THE COMPANYS OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY FROM QUARTER TO
QUARTER DUE TO VARIOUS FACTORS BEYOND ITS CONTROL, INCLUDING SEASONALITY.

The Companys operating results fluctuate seasonally because of its
geographic concentration. Of the 71 restaurants currently owned and operated
by the Company, 35 are located in generally residential or light commercial
areas in Florida.

The Companys restaurant sales generally increase from November through
April, the peaks of the Florida tourism season, and generally decrease from May
through October. In addition, because of its present geographic concentration,
the Companys results of operations have been and may continue to be materially
adversely affected by a decline in tourism in Florida, downturns in Floridas
economy or by hurricanes or other adverse weather conditions in Florida. To
offset this seasonal trend and to attempt to reduce the decline in sales during
the off-season, the Company runs special promotions for its customers,
incentive contests for its employees and otherwise focuses marketing
initiatives to increasing sales during these periods. Also, adverse publicity
in Florida relating to Roadhouse Grill restaurants could have a more pronounced
effect on the Companys results of operations than might be the case if its
restaurants were broadly dispersed geographically. Although the Company has
expanded its operations in other geographic markets, to, among other things,
offset some of the effects on its operating results due to its concentration in
the Florida market, there can be no assurance that the Companys restaurants
outside of the Florida area will be successful and have a positive effect on
the seasonal nature of its operating results. Because of the seasonality of
the Companys business, its results for any quarter are not necessarily
indicative of the results that may be achieved for a full year.

In addition to seasonality, the Companys quarterly and annual operating
results and comparable unit sales may fluctuate significantly as a result of a
variety of factors, including:



| |  |  | the amount of sales contributed by new and existing restaurants;                                                                   
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | labor costs for the Companys personnel;                                                                                           
|
| |  |  | changes in food and product costs;                                                                                                 
|
| |  |  | the Companys ability to achieve and sustain profitability on
a quarterly or annual basis;                                         
|
| |  |  | consumer confidence and changes in consumer preferences;                                                                           
|
| |  |  | health concerns, including adverse publicity concerning food-related illness;                                                      
|
| |  |  | the level of competition from existing or new competitors in
the full-service casual dining segment of the restaurant industry;
and
|
| |  |  | economic conditions generally and in each of the markets in
which the Companys restaurants are located.                           

In addition, the Company has experienced variability in the amount and
percentage of revenues attributable to preopening expenses. The Company
typically incurs the most significant portion of preopening expenses associated
with a given restaurant within the two months immediately preceding and the
month of the opening of the restaurant. The Companys experience to date has
been that labor and operating costs associated with a newly opened

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restaurant for the first several months of operation are materially
greater than those expected after that time, both in aggregate dollars and as a
percentage of revenues. Accordingly, the volume and timing of new restaurant
openings has had, and is expected to continue to have, a meaningful impact on
preopening expenses and labor and operating costs. Therefore, results for any
one quarter are not necessarily indicative of results to be expected for any
other quarter or for a full fiscal year, and, from time to time in the future,
the Companys results of operations may be below the expectations of public
market analysts and investors.

INTENSE COMPETITION IN THE RESTAURANT INDUSTRY COULD PREVENT THE COMPANY FROM
INCREASING OR SUSTAINING ITS REVENUES AND PROFITABILITY.

The restaurant industry, particularly the full-service casual dining
segment, is highly competitive. The Company competes with a broad range of
restaurants, including national and regional casual dining chains as well as
locally-owned restaurants, some of which operate with concepts similar to that
of the Company. The Company competes in the areas of price, service, location,
concept and food quality, including taste, freshness, and nutritional value.

The Company has numerous well-established competitors, some of which
dominate the industry. These competitors possess substantially greater
financial, marketing, personnel and other resources than the Company. Many of
the Companys competitors have achieved significant national, regional and
local brand name and product recognition. The Company also engages in
extensive advertising and promotional programs, both generally and in response
to efforts by additional competitors to enter new markets or introduce new
products. In addition, the Company competes with other restaurant companies
and retailers for sites and labor.

The Company believes that the full-service casual dining segment is likely
to continue to attract a significant number of new entrants. In addition, the
full-service restaurant industry is characterized by the frequent introduction
of new food products, which are accompanied by substantial promotional
campaigns. In recent years, numerous companies in the full-service casual
restaurant industry have introduced products intended to capitalize on growing
consumer preference for food products which are, or are perceived to be,
healthful, nutritious, low in calories and low in fat content. The Company
will be subject to increasing competition from companies whose products or
marketing strategies address these consumer preferences. The Company may need
to modify or refine elements of its restaurant system to evolve its concept in
order to compete with popular new restaurant formats or concepts that develop
from time to time. There can be no assurance that the Company will be
successful in implementing these modifications.

The restaurant business is often affected by changes in:



| |  |  | consumer tastes;                                
| | - |  | ------------------------------------------------
|
| |  |  | national, regional or local economic conditions;
|
| |  |  | demographic trends;                             
|
| |  |  | consumer confidence in the economy;             
|
| |  |  | discretionary spending priorities;              
|
| |  |  | weather conditions;                             

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| |  |  | Tourist travel;                                        
| | - |  | -------------------------------------------------------
|
| |  |  | Traffic patterns; and                                  
|
| |  |  | The type, number and location of competing restaurants.

Changes in these factors could prevent the Company from increasing or
sustaining its revenues and profitability and result in a material adverse
effect on its business, financial condition, results of operations or cash
flows.

THE COMPANY IS DEPENDENT UPON SUPPLY
AND QUALITY OF FOOD PRODUCTS.

The success of the Companys restaurants depends upon frequent deliveries
of food products. The Company is routinely exposed to the risks that shortages
or interruptions in supply can occur and adversely affect the availability,
quality and cost of these critical food products. Regional weather conditions
may also adversely affect product supply and quality. The Company has not
experienced significant difficulty in obtaining adequate supplies of food
products on a timely basis. However, there can be no assurance that in the
future inadequate supplies of food products, especially steak products, might
not have a material adverse effect on the Companys operations and
profitability.

THE COMPANY IS AFFECTED BY LITIGATION AND PUBLICITY CONCERNING FOOD QUALITY,
HEALTH AND OTHER ISSUES WHICH CAN CAUSE GUESTS TO AVOID ITS RESTAURANTS AND
WHICH CAN RESULT IN LIABILITIES.

Health concerns, including adverse publicity concerning food-related
illness, although not specifically related to the Companys restaurants, could
cause guests to avoid certain restaurant groups including the Companys
restaurants, which would have a negative impact on its sales. The Company may
also be the subject of complaints or litigation from guests alleging
food-related illness, injuries suffered on the premises or other food quality,
health or operational concerns. A lawsuit or claim could result in an adverse
decision against the Company that could have a material adverse effect on its
business and results of operations. The Company may also be subject to
litigation which, regardless of the outcome, could result in adverse publicity.
Adverse publicity resulting from such allegations may materially adversely
affect the Company and its restaurants, regardless of whether such allegations
are true or whether the Company is ultimately held liable. Such litigation,
adverse publicity or damages could have a material adverse effect on the
Companys business, competitive position and results of operations.

THE COMPANY COULD FACE LABOR SHORTAGES, INCREASED LABOR COSTS, AND OTHER
ADVERSE EFFECTS OF VARYING LABOR CONDITIONS.

The development and success of the Companys restaurants depend, in large
part, on the efforts, abilities, experience and reputations of the general
managers and chefs at each restaurant. The Companys inability to recruit and
retain qualified individuals may delay the opening of new restaurants or result
in higher employee turnover in existing restaurants, which could materially and
adversely affect the Companys results of operations or business. In addition,
the Companys success depends in part upon its ability to attract, motivate and
retain a sufficient number of qualified employees, including restaurant
managers, kitchen staff and wait staff. Qualified individuals needed to fill
these positions are in short supply and the inability to recruit and retain

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such individuals may delay the planned openings of new restaurants or result in
high employee turnover in existing restaurants. A significant delay in finding
qualified employees or high turnover of existing employees could cause the
Companys business and results of operations to suffer. Also, competition for
qualified employees could require the Company to pay higher wages to attract
sufficient qualified employees.

INCREASES IN THE MINIMUM WAGE MAY HAVE A MATERIAL ADVERSE EFFECT ON THE
COMPANYS BUSINESS AND FINANCIAL RESULTS.

A number of the Companys employees are subject to various minimum wage
requirements. The federal minimum wage has remained at $5.15 per hour since
September 1, 1997. Any minimum wage increase may have a material adverse
effect on the Companys business, financial condition, results of operations or
cash flows.

THE COMPANY MAY NOT BE ABLE TO CONTINUE TO SUCCESSFULLY EXPAND ITS RESTAURANT
OPERATIONS.

Subsequent to April 27, 2003, the Company opened one Company-owned
restaurant. No additional Company-owned restaurants are currently expected to
be opened in fiscal year 2004. The Companys ability to expand successfully
will depend on a number of factors, including:



| |  |  | identification and availability of suitable locations;                                             
| | - |  | ---------------------------------------------------------------------------------------------------
|
| |  |  | competition for restaurant sites;                                                                  
|
| |  |  | negotiation of favorable lease arrangements;                                                       
|
| |  |  | timely development of commercial, residential, street or highway
construction near its restaurants;
|
| |  |  | management of the costs of construction and development of new restaurants;                        
|
| |  |  | securing required governmental approvals and permits;                                              
|
| |  |  | recruitment of qualified operating personnel, particularly managers and
chefs;                     
|
| |  |  | weather conditions; and                                                                            
|
| |  |  | competition in new markets.                                                                        

The opening of additional restaurants will depend in part upon the
Companys ability to generate sufficient funds from operations or the sale of
assets or to obtain sufficient equity or debt financing on favorable terms to
support its expansion. The Company may require additional debt or equity
financing to continue to open new restaurants. The Company cannot be certain
that additional financing will be available when and to the extent required or
that, if available, it will be on acceptable terms. If the Company is unable
to obtain additional funds in a timely manner or on acceptable terms, it may
have to curtail or suspend any expansion of its operations.

The Company may not be able to open new restaurants on a timely basis, if
ever, and, if opened, these restaurants may not operate on a profitable basis.
The Company expects to experience delays in restaurant openings from time to
time. Delays or failures in opening planned new restaurants could have an
adverse effect on the Companys business, financial condition, results of
operations or cash flows.

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THE COMPANY IS DEPENDENT UPON ITS CHIEF EXECUTIVE OFFICER AND ITS OTHER KEY
EMPLOYEES.

The Company believes that the development of its business has been, and
will continue to be, dependent on the services of Ayman Sabi, its Chief
Executive Officer, and other key employees. The loss of Mr. Sabis
services, or the loss of the services of other key employees, could have a
material adverse effect on the Companys business, and there can be no
assurance that an adequate replacement could be found for Mr. Sabi or the other
key employees in the event of their unavailability. The Companys continued
growth will further depend on its ability to attract and retain additional
skilled senior management personnel, including, but not limited to, senior
operations personnel and restaurant managers.

FAILURE TO COMPLY WITH GOVERNMENTAL REGULATIONS COULD HARM THE COMPANYS
BUSINESS AND REPUTATION.

The Company is subject to regulation by federal agencies and to licensing
and regulation by state and local health, sanitation, building, zoning, safety,
fire and other departments relating to the development and operation of
restaurants. These regulations include matters relating to:



| |  |  | the environment;                                         
| | - |  | ---------------------------------------------------------
|
| |  |  | building construction;                                   
|
| |  |  | zoning requirements; and                                 
|
| |  |  | the preparation and sale of food and alcoholic beverages.

The Companys facilities are licensed and subject to regulation under
state and local fire, health and safety codes. The development and
construction of future restaurants will be subject to compliance with
applicable zoning, land use and environmental regulations. Various federal and
state labor laws govern the Companys operations and its relationship with its
employees, including minimum wage, overtime, safety and working conditions,
fringe benefit and citizenship requirements. In particular, the Company is
subject to the regulations of the Immigration and Naturalization Service (INS).
Given the location of many of the Companys restaurants, even if the Company
operates those restaurants in strict compliance with INS requirements, the
Companys employees may not all meet federal citizenship or residency
requirements, which could lead to disruptions in the Companys work force.
Material increases in unemployment tax rates, sales taxes or the cost of
compliance with any applicable law or regulation could materially and adversely
affect the Companys business.

Sales of alcoholic beverages account for approximately 10% of the
Companys revenues. The Company is required to comply with the alcohol
licensing requirements of the various government agencies, including states and
municipalities where the Companys restaurants are located. Alcoholic beverage
control regulations require each Roadhouse Grill restaurant to apply to a state
authority and, in certain locations, county and/or municipal authorities for a
license or permit to sell alcoholic beverages on the premises and to provide
service for extended hours. Typically, licenses must be renewed annually and
may be revoked or suspended for cause at any time. If a liquor license for any
restaurant were lost, revenues for that restaurant would be adversely affected.
Alcoholic beverage control regulations relate to numerous aspects of the
Companys restaurants, including minimum age of patrons consuming, and
employees serving,

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alcoholic beverages, hours of operation, advertising, wholesale purchasing,
inventory control, and handling, storage and dispensing of alcoholic beverages.
The Company is also subject to dram-shop statutes, which generally provide a
person injured by an intoxicated person the right to recover damages from an
establishment that wrongfully served alcoholic beverages to the intoxicated
person. Any liability under such statutes could have a material adverse effect
on the Companys results of operations and financial condition. The Company
carries liquor liability coverage as part of its existing comprehensive general
liability insurance. However, there can be no assurance that the Companys
insurance coverages will be adequate.

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

In connection with the Companys franchise operations, it is required to
comply with Federal Trade Commission and state laws and regulations that govern
the offer, sale and termination of franchises and the refusal to renew
franchises.

Failure to comply with the regulations described above could negatively
impact the Companys business and reputation.

THE COMPANY IS SELF-INSURED IN CERTAIN OF ITS INSURANCE COVERAGES AND HAS
EXPERIENCED INCREASED INSURANCE COSTS.

The Company maintains insurance to cover the potential liabilities
associated with a number of the risks that the Company may encounter in its
business operations. These include property and flood coverage, auto, workers
compensation, general liability and umbrella, directors and officers liability,
employers practice liability and crime insurance. Many of the policies, such
as property, flood and directors and officers liability include deductibles
ranging from $100,000 to $250,000 per claim. For many policy years, under
workers compensation, employers practice liability and general liability
coverage, the Company is effectively self-insured up to varying self-insurance
retention limits set on an individual claim basis ranging up to $300,000 per
claim and on an aggregate basis. The Company is also self-insured in regards
to the medical insurance benefits that it provides to its managers and certain
other employees. These employees who elect to receive medical insurance
benefits are required to contribute a portion of the cost of providing the
insurance benefits. Total insurance costs incurred by the Company for the
fiscal years of 2003, 2002 and 2001 were $6.3 million, $3.5 million and $4.4
million, respectively.

Due to the trends currently being experienced in the insurance industry,
the Company believes that its insurance costs will continue to represent a
significant expense to the Company and may increase in the future. Management
is continuing to evaluate options relating to controlling these costs including
changes in its insurance carriers and brokers, modifications to certain of the
provisions of its policies including deductibles and self-insured retention
limits and

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changes in the portion of costs incurred in providing coverage for its
employees that are allocated to the employees who participate in the plan.

THE COMPANYS COMMON STOCK IS QUOTED ON THE PINK SHEETS, AND INVESTORS MAY FIND
IT MORE DIFFICULT TO SELL THE COMPANYS COMMON STOCK.

Effective May 2, 2002, the Companys common stock was delisted from the
NASDAQ National Market. As a result of its delisting, the Companys common
stock is currently quoted on the Pink Sheets.

The fact that the Companys common stock is not listed is likely to make
trading its shares more difficult for broker-dealers, shareholders and
investors, potentially leading to further declines in share price. It may also
make it more difficult for the Company to raise additional capital. An
investor may find it more difficult to sell the Companys common stock or to
obtain accurate quotations of the share price of its common stock. Management
has not determined when or whether it will apply again for listing on a Nasdaq
market.

The Company is also subject to an SEC rule concerning the trading of
so-called penny stocks. Under this rule, broker-dealers who sell securities
governed by the rule to persons who are not established customers or accredited
investors must make a special suitability determination and must receive the
purchasers written consent to the transaction prior to the sale. This rule
may deter broker-dealers from recommending or selling the Companys stock,
which may negatively affect the liquidity of the Companys stock.

COMPANY RESTAURANT OPERATIONS

MENU

The Roadhouse Grill menu, which was revised and expanded in June 2003,
features aged USDA Choice steaks and prime rib, beef ribs, chicken and seafood,
all of which are grilled to order. The Companys steaks are aged both before
and after being cut and trimmed. The menu features over sixty items, including
13 cuts of steak ranging from 6 oz. to 18 oz. The Company is known for its
Roadie (bourbon marinated sirloin), prime rib, and award-winning baby-back
ribs. In addition to grilled selections, the new menu offers a variety of
specialty drinks, a pasta dish, seafood, a wide variety of appetizers,
sandwiches, and salads, including signature items such as Roadhouse cheese
wraps and a variety of desserts, most notably the messy sundae. Each entree
is served with a choice of a house salad or Caesar salad, a choice of baked
sweet potato, baked potato, home fries, french fries or rice pilaf, homemade
yeast rolls and peanuts. Roadhouse Grill restaurants are open seven days a
week for lunch and dinner and offer full bar service. Entrée prices range from
$5.79 to $18.99. From 11:00 a.m. to 3:00 p.m. Monday through Friday, in
addition to its full menu, each Roadhouse Grill offers a selection of 20 lunch
menu items ranging from charbroiled steak salad to hand-breaded chicken strips
and french fries, all prepared to order quickly and priced at $8.99 or less.

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UNIT ECONOMICS

The 69 Company-owned Roadhouse Grill restaurants open for the entire 52
weeks in fiscal year 2003 generated average net sales of approximately $2.0
million, average restaurant-level cash flow (restaurant revenues less cost of
restaurant sales, excluding pre-opening expenses) of $166,000 and average
operating income (restaurant-level cash flow less depreciation and
amortization) of $63,000. The Companys average cash investment for these 69
restaurants was approximately $1.3 million, including building structures
(where applicable), building or leasehold improvements and equipment and
fixtures, but excluding land and pre-opening costs. Restaurant-level economics
are affected to the extent that the Company constructs free-standing units on
Company-owned or leased land, rather than leasing existing buildings. In such
cases, initial development costs are substantially greater and occupancy costs
(other than depreciation) are substantially less when the Company leases
existing buildings. The Company cannot predict if average unit-level economics
would be altered significantly if in the future the mix of restaurants placed
in leased buildings compared to free-standing buildings on Company-owned or
leased land were to change materially from the Companys current mix.

RESTAURANT OPERATIONS AND MANAGEMENT

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

Roadhouse Grill restaurants generally operate with a general manager, a
dining room manager, a kitchen manager and one or two assistant managers
depending upon volume. The general manager of each restaurant has primary
responsibility for managing the day-to-day operations of the restaurant in
accordance with Company standards. The general manager and kitchen manager of
each restaurant generally are responsible for interviewing, hiring and training
restaurant staff. Each restaurant has a staff of approximately 60 to 70
employees. The Company currently employs seven directors of operations, each
of whom is responsible for supervising the operations of eight to 13
restaurants.

The Company devotes a significant amount of time and resources to
restaurant management and staff training. Each new manager participates in an
eight-week training program, which is conducted both at designated training
restaurants and the corporate office,

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before assuming an assistant manager position (or, in some instances, a kitchen
manager position) at a Roadhouse Grill restaurant. This program is designed to
provide training in all areas of restaurant operations, including food
preparation and service, alcoholic beverage service, Company philosophy,
operating standards, policies and procedures, and business management and
administration techniques. These new managers are also trained and evaluated
in regards to behavioral skills and other topics to ensure they possess the
ability to succeed in managing the Companys operations. The managers of the
training restaurant conduct weekly evaluations of each manager trainee.

In connection with the opening of each new restaurant, the Company sends
an experienced training team to train and assist the new restaurant employees.
The training team generally arrives at each restaurant two weeks prior to
opening and remains for four weeks after opening. Typically, the general
manager, the dining room manager and the kitchen manager of each new restaurant
are individuals who have been managers at an existing Roadhouse Grill
restaurant.

The development and success of the Companys restaurants depend, in large
part, on the efforts, abilities, experience and reputations of the general
managers and chefs at such restaurants. The Companys inability to recruit and
retain high-quality personnel may delay the opening of new restaurants or
result in higher employee turnover in existing restaurants, which could
materially and adversely affect the Companys results of operations or
business. Competition for qualified employees could require the Company to pay
higher wages to attract sufficient qualified employees.

Purchasing. To better insure uniform quality and obtain competitive
prices, the Company contracts centrally for most restaurant food products and
other supplies. Individual restaurants decide the amount of each item they
require and place orders directly with the Companys distributors several times
a week. Managers also arrange for produce items to be provided by local
vendors that meet the Companys quality standards. Corporate management
closely monitors prices and other supply contract terms for locally and
centrally contracted items. Because of the volume of its aggregate orders and
the volume of supplies delivered to each individual restaurant, the Company
believes that it is able to obtain favorable prices for its supplies.

The Companys profitability is dependent in large measure on its ability
to anticipate and react to changes in food and supply costs. Various factors
beyond the Companys control, including climatic changes, disease or illness in
beef cattle that could impact supply in the marketplace and government
regulations, may affect food costs. Specifically, the Companys dependence on
frequent, timely deliveries of beef, poultry, seafood and produce subjects it
to the risks of possible shortages or interruptions in supply caused by adverse
weather or other conditions which could adversely affect the availability and
cost of any such items. The failure to react to these increases could
materially and adversely affect the Companys business and result of
operations. In addition, during fiscal year 2003, the Company purchased
approximately 79% of its food and other restaurant supplies from two
distributors. The Companys dependence on a small number of suppliers subjects
it to the risk of possible shortages or interruptions in supply if any of these
distributors is not able to provide food and supplies to the Companys

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restaurants in a timely manner. The Company believes it is able to manage
this risk by working solely with high-quality, financially stable vendors and
therefore realize the benefits of primarily centralized distribution.

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

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

ADVERTISING AND MARKETING

The Company attempts to build brand-awareness by providing a distinctive
dining experience that results in a significant number of new customers being
attracted through word of mouth, as well as by traditional marketing efforts
and promotional activities. The Company believes that clustering multiple
restaurants in target markets will help build brand-awareness and increase
efficiencies in its marketing efforts. The Company also utilizes radio,
billboard and print advertising to promote its restaurants and build
brand-awareness. The Companys motto is: Roadhouse Grill...Eat, Drink and be
Yourself. The Company also markets at the restaurant level through
sponsorship of community charity activities, sporting events, festivals and
Chamber of Commerce events. For fiscal year 2002 and 2003, advertising and
marketing expense relating to Roadhouse Grill restaurants amounted to
approximately 1.7% and 2.4% of total revenues, respectively.

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RESTAURANT LOCATIONS

The following table sets forth the location of Company-owned restaurants
open as of April 27, 2003:

|               |  |             |    | 
|-------------- |  | ----------- | -- | 
|               |  | Number of  
|Location       |  | Restaurants
|               |  |            
|Florida        |  |             | 35 | 
|Georgia        |  |             | 9  | 
|New York       |  |             | 6  | 
|Louisiana      |  |             | 3  | 
|South Carolina |  |             | 2  | 
|Alabama        |  |             | 2  | 
|Mississippi    |  |             | 3  | 
|Ohio           |  |             | 8  | 
|Arkansas       |  |             | 1  | 
|North Carolina |  |             | 1  | 
|               |  |             |    | 
|Total          |  |             | 70 | 
|               |  |             |    | 

Note: Subsequent to April 27, 2003, one additional Company-owned restaurant
was opened in North Carolina.

RESTAURANT INDUSTRY AND COMPETITION

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

The restaurant industry has few non-economic barriers to entry and is
affected by changes in consumer tastes as well as national, regional and local
economic conditions, demographic trends, traffic patterns, and the type, number
and location of competing restaurants. Dependence on fresh meats and produce
also subjects restaurant companies to the risk that

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shortages or interruptions of supply could adversely affect the availability,
quality or cost of ingredients. In addition, factors such as inflation,
increased food, labor and employee benefit costs and the availability of
qualified management and hourly employees also may adversely affect the
restaurant industry generally and the Companys restaurants in particular. The
Companys significant investment in and long-term commitment to each of its
restaurant sites limits its ability to respond quickly or effectively to
changes in local competitive conditions or other changes that could affect the
Companys operations. The Companys continued success is dependent to a large
extent on its reputation for providing high quality and value and this
reputation may be affected not only by performance of Company-owned restaurants
but also by the performance of franchisee-owned restaurants over which the
Company has limited control.

SEASONALITY

The Companys operating results fluctuate seasonally because of its
geographic concentration. Of the 71 restaurants currently owned and operated,
35 are located in generally residential or light commercial areas in Florida.
The Companys restaurant sales generally increase from November through April,
the peaks of the Florida tourism season, and generally decrease from May
through October. In addition, because of its present geographic concentration,
the Companys results of operations have been and may continue to be materially
adversely affected by a decline in tourism in Florida, downturns in Floridas
economy or by hurricanes or other adverse weather conditions in Florida. To
offset this seasonal trend and to attempt to reduce the decline in sales during
the off-season, the Company runs special promotions for its customers,
incentive contests for its employees and otherwise focuses marketing
initiatives to increasing sales during these periods.

GOVERNMENT REGULATION

Each Roadhouse Grill restaurant is subject to and affected by various
federal, state and local laws and governmental regulations, including those
relating to the preparation, sale and service of food and alcoholic beverages,
designation of non-smoking and smoking areas, accessibility of restaurants to
disabled customers, development and construction of restaurants and
environmental matters. Difficulties or failures in obtaining the required
construction and operating licenses, permits or approvals could delay or
prevent the opening of a new restaurant. Roadhouse Grill believes that it is
operating in material compliance with applicable laws and regulations.

The Company is also subject to laws governing its relationship with
employees, including minimum wage requirements, overtime, working conditions
and immigration requirements. Legislative proposals are introduced by
governmental authorities from time to time that would, if enacted, have a
material adverse effect on the Companys business by increasing the Companys
operating costs. Material increases in unemployment tax rates, sales taxes or
the cost of compliance with any applicable law or regulation could materially
and adversely affect the Companys business. There is no assurance that the
Company would be able to pass such

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increased costs on to its guests or that, if it were able to do so, it could do
so in a short period of time.

Sales of alcoholic beverages account for approximately 10% of the
Companys revenues. Alcoholic beverage control regulations require each
Roadhouse Grill restaurant to apply to a state authority and, in certain
locations, county and/or municipal authorities for a license or permit to sell
alcoholic beverages on the premises and to provide service for extended hours.
Typically, licenses must be renewed annually and may be revoked or suspended
for cause at any time. If a liquor license for any restaurant were lost,
revenues for that restaurant would be adversely affected. Alcoholic beverage
control regulations relate to numerous aspects of the Companys restaurants,
including minimum age of patrons consuming, and employees serving, alcoholic
beverages, hours of operation, advertising, wholesale purchasing, inventory
control, and handling, storage and dispensing of alcoholic beverages. The
Company is also subject to dram-shop statutes, which generally provide a
person injured by an intoxicated person the right to recover damages from an
establishment that wrongfully served alcoholic beverages to the intoxicated
person. The Company carries liquor liability coverage as part of its existing
comprehensive general liability insurance. There can be no assurance that the
Companys insurance coverages will be adequate.

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

In connection with its sale of franchises, the Company is subject to the
United States Federal Trade Commission rules and regulations and state laws
that regulate the offer and sale of franchises. The Company also is subject to
laws that regulate certain aspects of the franchise relationship.

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

Various states have recently enacted legislation requiring the protection
of customer credit card numbers by the suspension of printing the credit card
numbers on customer receipts. The Company is working with its point of sale
systems vendors in order to ensure compliance with the new laws by the various
effective dates, the earliest of which is currently scheduled for July 2005.
It is anticipated that the application of new system software will require
system upgrades at certain of the Companys restaurant locations. Although the
exact cost cannot be determined at this time, a material incremental capital
investment may be required.

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INSURANCE

The Company maintains insurance to cover the potential liabilities
associated with a number of the risks that the Company may encounter in its
business operations. These include property and flood coverage, auto, workers
compensation, general liability and umbrella, directors and officers liability,
employers practice liability and crime insurance. Many of the policies, such
as property, flood and directors and officers liability include deductibles
ranging from $100,000 to $250,000 per claim. For many policy years, under
workers compensation, employers practice liability and general liability
coverage, the Company is effectively self-insured up to varying self-insurance
retention limits set on an individual claim basis ranging up to $300,000 per
claim and on an aggregate basis. The Company is also self-insured in regards
to the medical insurance benefits that it provides to its managers and certain
other employees. These employees who elect to receive medical insurance
benefits are required to contribute a portion of the cost of providing the
insurance benefits. Total insurance costs incurred by the Company for the
fiscal years of 2003, 2002 and 2001 were $6.3 million, $3.5 million and $4.4
million, respectively.

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

EMPLOYEES

At April 27, 2003, the Company employed 5,213 persons, of whom 4,917 were
restaurant employees, 246 were restaurant management and supervisory personnel,
and 50 were corporate personnel. Restaurant employees include both full-time
and part-time workers and substantially all are paid on an hourly basis. No
Company employees are covered by collective bargaining agreements, and the
Company has never experienced an organized work stoppage, strike or labor
dispute. The Company believes its relations with its employees are generally
satisfactory.

TRADEMARKS, SERVICE MARKS AND TRADE DRESS

The Company believes that its rights in trademarks, service marks and
trade dress are important to its marketing efforts. Roadhouse Grill has
registered the Roadhouse Grill service mark and other designs and slogans
with the U.S. Patent and Trademark Office and with the respective trademark
offices in other countries. Roadhouse Grill has certain other foreign
trademarks in various stages of the registration process; however, the Company
has temporarily ceased the registration process in several countries and will
resume such process on a case-by-case basis in certain of those countries in
the near future.

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The Company believes that its trademarks and service marks have
significant value and are essential to the Companys ability to create demand
for and awareness of its restaurants. There can be no assurance, however, that
the Companys marks would be upheld if challenged or that the Company would not
be prevented from using its marks. The Company also relies on trade secrets
and proprietary know-how. The Company employs various methods to protect its
concepts and recipes. However, these methods may not completely protect the
Company.

EXPANSION STRATEGY

The Companys long-term strategy is to expand the Roadhouse Grill concept
in relation to Company-owned restaurants in a much slower and more controlled
manner than was incurred in the past. One additional restaurant was opened in
June 2003. No other new restaurant openings are currently planned for fiscal
year 2004. Subject to the operating results of its existing restaurants and the
identification of suitable locations, the Company plans to open approximately
one to three restaurants per year over the next three years. The Companys
focus in fiscal year 2004 will be to maximize its return on its investment in
its existing restaurants in the United States and to expand the number of
franchised and joint venture locations internationally. Management believes
that opportunities exist that would enable the Company to expand its joint
venture and franchised operations. Management also believes that this type of
growth opportunity will require significantly lower capital resources from the
Company.

The Companys ability to open new restaurants will depend on a variety of
factors, many of which may be beyond the Companys control, including the
Companys ability to: locate suitable restaurant sites; negotiate acceptable
lease or purchase terms; obtain required governmental approvals and construct
new restaurants in a timely manner; attract, train and retain qualified and
experienced personnel and management; generate sufficient cash from operations
or obtain sufficient debt or equity financing on favorable terms; and continue
to operate its restaurants profitably. Due to these factors and others
discussed in this report, there is no assurance that the Company will be able
to continue to effectively develop or operate additional restaurants.

The Company believes the site selection process is critical to the
long-term success of any restaurant, and, accordingly, devotes significant time
and effort to the investigation and evaluation of potential locations. Among
the factors in the site selection process are market demographics (including
population, age and median household income); traffic patterns and activity;
site visibility, accessibility and parking; and proximity to residential
developments, office complexes, hotels, retail establishments and entertainment
areas. Another important factor is the convenience of the potential location
to both lunch and dinner guests and the occupancy cost of the proposed site.
The Companys development strategy is to cluster restaurants in markets that
can support them with cost-effective media advertising. In addition, the
Company believes that clustering multiple units allows more efficient
supervision of the restaurants.

Corporate management of the Company determines which geographic areas may

be suitable for Roadhouse Grill restaurants. Potential sites in those
geographic areas are identified

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by Company personnel, consultants and independent real estate brokers. In
connection with the Companys evaluation, Company personnel visit and analyze
each potential site.

When the Company has developed restaurants in existing buildings,
construction has taken approximately 90 to 120 days after required construction
permits have been obtained. Construction of restaurants on vacant land is a
longer process and has generally ranged from 120 to 180 days. The Companys
experience to date has been that obtaining construction permits has generally
taken from 30 to 180 days. The Company engages outside general contractors for
construction of its restaurants and expects to continue this practice for the
foreseeable future.

The Companys prototypical restaurant format is approximately 6,800 square
feet with seating for approximately 260 guests. Facilities range in size from
5,000 to 12,000 square feet with seating for approximately 190 to 398 guests.
The Company uses a standardized design in constructing restaurants, with
modifications made for each particular site. The Company is assisted by
outside architects in the design of individual restaurants. The Company makes
its standardized design available to its franchisees and has final right of
approval on the design of each franchised restaurant.

The Company believes its restaurants have a comfortable atmosphere and are
visually appealing with exposed ceilings and brick and lapboard cedar walls
decorated with colorful murals and neon signs. The typical interior also
includes multi-level seating, a full-service bar, an exhibition grill and
display kitchen. The exterior of each restaurant features rough-sawed siding,
a wrap-around wood plank porch, a tin roof trimmed in neon and an oversized
Roadhouse Grill sign. In addition to the public areas, each restaurant has a
food preparation and storage area including a fully- equipped kitchen.

FRANCHISE AND JOINT VENTURE RESTAURANTS

The following table sets forth the location of franchise and joint venture
restaurants open as of April 27, 2003:

Franchise

|                 |  |             |   | 
|---------------- |  | ----------- | - | 
|                 |  | Number of  
|Location         |  | Restaurants
|                 |  |            
|Nevada           |  |             | 1 | 
|Ohio             |  |             | 1 | 
|Malaysia         |  |             | 3 | 
|Brasilia, Brazil |  |             | 1 | 
|                 |  |             |   | 
|Total            |  |             | 6 | 
|                 |  |             |   | 

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Joint Venture

|         |  |             |   | 
|-------- |  | ----------- | - | 
|         |  | Number of  
|Location |  | Restaurants
|         |  |            
|Italy    |  |             | 3 | 
|         |  |             |   | 
|Total    |  |             | 3 | 
|         |  |             |   | 

FRANCHISE OPERATIONS

In addition to operating Company-owned restaurants, the Company has six
franchise locations. The Company currently has five franchisees: Roadhouse
Operating Company, LLC (Roadhouse Operating), Roadhouse Grill Asia Pacific
(H.K.) Limited (Roadhouse Grill Hong Kong), Roadhouse Grill Asia Pacific
(Cayman) Limited (Roadhouse Grill Asia), Brent Empreendimentos e Alimentacao
Ltda. (Roadhouse Grill Brazil), and NAHI, Inc. Berjaya, the majority
shareholder of the Company, directly or indirectly owns Roadhouse Grill Hong
Kong and Roadhouse Grill Asia.

The Company is currently seeking to develop additional franchising
opportunities on an international basis with primary focus on development in
Europe, South America, and the Caribbean. The Company also will be actively
seeking multi-unit franchising in the United States in the foreseeable future.
There can be no assurance that the Company will be successful in its efforts.

Roadhouse Operating. Roadhouse Operating entered into an initial
franchise agreement and Master Development Agreement with the Company (the
Roadhouse Operating Master Development Agreement) in August 1995. Pursuant
to the Roadhouse Operating Master Development Agreement, the Company was
required to enter into a franchise agreement with Roadhouse Operating for each
new franchise restaurant prior to the opening of that restaurant. Pursuant to
the Roadhouse Operating Master Development Agreement, and in each case pursuant
to a separate franchise agreement, Roadhouse Operating opened three Roadhouse
Grill restaurants. Two of these have been closed, and one is currently being
operated.

The Roadhouse Operating Master Development Agreement provided for the
exclusive development of up to five restaurants, over a period which ended
October 31, 1999, in Clark County, Nevada (which includes the Las Vegas, Nevada
metropolitan area). Under the Roadhouse Operating Master Development
Agreement, Roadhouse Operatings exclusive right to develop Roadhouse Grill
restaurants was contingent upon it meeting the development schedule set forth
in the Roadhouse Operating Master Development Agreement.

Roadhouse Operating is obligated to pay the Company a percentage royalty
fee based on gross sales. Under the Roadhouse Operating Master Development
Agreement, Roadhouse Operating is not obligated to pay any area development or
initial franchise fees. As of April 27,

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2003, the receivable from Roadhouse Operating was approximately $0.1 million.
Due to lack of payment, this amount has been fully reserved.

The Company is the guarantor of equipment leases for three restaurants,
two of which are currently closed, owned by Roadhouse West G.P., an affiliate
of Roadhouse Operating. In addition, management understands that other parties
have also guaranteed these obligations. Roadhouse West G.P. is currently in
default of the payment terms of the operating leases. The balance of the
remaining lease payments due was approximately $1.0 million as of April 27,
2003. The leases are collateralized by the leased equipment and certain
leasehold improvements. Roadhouse West G.P. has recently filed for Chapter 11
Bankruptcy. The Company cannot predict the outcome of these proceedings but
believes that any potential liability will be mitigated by the factors
described above and, accordingly, has provided no reserve for any possible
obligations that may arise relating to these proceedings. The United States
Trustees office has recently filed a motion to convert the Chapter 11
Bankruptcy to Chapter 7 liquidation, citing that no feasible reorganization
plan is being or will be provided.

Roadhouse Operating was not able to meet the development schedule under
the Roadhouse Operating Master Development Agreement, which expired on October
31, 1999. As of the date of this report, the Company has taken no action to
enforce compliance with the development of new restaurants required under the
Roadhouse Operating Master Development Agreement due to the bankruptcy
proceedings.

Roadhouse Grill Hong Kong. In January 1996, the Company entered into a
Master Development Agreement with Roadhouse Grill Hong Kong (the Hong Kong
Master Development Agreement), which is for an indefinite period and provides
for the development and franchising of Roadhouse Grill restaurants in Hong
Kong. Under the Hong Kong Master Development Agreement, Roadhouse Grill Hong
Kong is not required to develop any specific number of restaurants in Hong
Kong, but any restaurants that it develops are credited against the development
obligations of Roadhouse Grill Asia under Roadhouse Grill Asias Master
Development Agreement with the Company. Roadhouse Grill Hong Kong is not
required to pay any franchise or reservation fee for restaurants that it
develops, but is responsible for paying or reimbursing approved expenses
incurred by the Company in connection with the opening of each restaurant. In
addition, Roadhouse Grill Hong Kong is required to pay the Company a royalty on
gross sales in connection with the operation of each of its restaurants. Under
certain circumstances, Roadhouse Grill Hong Kong or the Company may grant
franchises to third parties in Hong Kong. In that event, the Company is
entitled to receive 50% of any franchise and reservation fees and 40% of any
royalty fee, payable by the third party franchisee to Roadhouse Grill Hong
Kong, subject to limitations on the amounts payable to the Company of $10,000
per restaurant in the case of franchise and reservations fees and royalty fees
based on gross sales.

As of April 27, 2003, Roadhouse Grill Hong Kong had not developed or
opened any Roadhouse Grill restaurants, and the Company does not anticipate
that Roadhouse Grill Hong Kong will develop any Roadhouse Grill restaurants in
the foreseeable future.

Roadhouse Grill Asia.In January 1996, the Company entered into a Master
Development Agreement with Roadhouse Grill Asia (the Asia Master Development

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Agreement), which is for an indefinite period and covers countries in Asia and
the Pacific Rim (other than Hong Kong), including, but not limited to,
Australia, China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore,
South Korea, the Philippines and Thailand. Under the Asia Master Development
Agreement, Roadhouse Grill Asia is required to open and maintain at least 30
Roadhouse Grill restaurants during the first ten years of the Asia Master
Development Agreement, with a minimum of two restaurants to be developed each
year. Under certain circumstances, Roadhouse Grill Asia or the Company may
grant franchises to third parties in the territory. The fee arrangements under
the Asia Master Development Agreement are substantially the same as those under
the Hong Kong Master Development Agreement. See Item 13 Certain Relationships
and Related Transactions.

Roadhouse Grill Asia currently operates three franchised Roadhouse Grill
restaurants in Malaysia. The Company accrued less than $0.1 million in royalty
income from those restaurants during fiscal year 2003. Royalty income is
currently being offset against interest that the Company owes to Berjaya. This
offset of royalty income will continue until the royalty receivable exceeds the
amount due Berjaya, which approximates $129,000 as of April 27, 2003. Once the
royalty receivable exceeds the payable to Berjaya, the Company expects to begin
collecting the earned royalty fees.

Roadhouse Grill Asia has not met the development schedule under the Asia
Master Development Agreement. As of the date of this filing, the Company has
taken no action to enforce compliance with the development of new stores
required under the Asia Master Development Agreement and is currently in
discussion with Roadhouse Grill Asia regarding the agreement.

Roadhouse Grill Brazil.In May 1999, the Company entered into a Master
Development Agreement with Roadhouse Grill Brazil, which provides for the
development and franchising of Roadhouse Grill restaurants in Brazil. Under
the agreement, Roadhouse Grill Brazil is required to open and maintain at least
eight Roadhouse Grill restaurants during the first ten years of the term of the
agreement. Roadhouse Grill Brazil pays the Company a one-time franchise fee
for each new restaurant opened and an ongoing service fee based on gross sales.
Roadhouse Grill Brazil currently operates one Roadhouse Grill restaurant in
Brasilia, Brazil. As of April 27, 2003, the receivable from Roadhouse Grill
Brazil was less than $0.1 million.

Ohio franchisee.In March 2002, the Company entered into a Master
Development Agreement with NAHI, Inc., granting the exclusive right to build
five restaurants in five years in the Cincinnati/Tri State area of Ohio and
Kentucky. In order to maintain these exclusive rights, the franchisee must
comply with the terms of the agreement including, but not limited to, opening
one restaurant per year. Currently, there is one franchised location open
pursuant to this Master Development Agreement.

JOINT VENTURE OPERATIONS

On July 6, 2000, the Company entered into a joint venture agreement with
the Cremonini Group, a publicly-traded Italian conglomerate, specializing in
the food service industry in

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Europe. Under the original joint venture agreement, Cremonini Group is
required to open and operate at least 60 Roadhouse Grill restaurants in Italy,
France, Spain, Great Britain and other principal European countries. The
Company is not required to make any capital outlay in connection with the joint
venture. In accordance with the terms of the joint venture agreement, the
Company owns a 1.5% equity interest in the joint venture and has an option to
purchase up to an additional 8.5% equity interest in the joint venture. In
addition, the Company is entitled to royalty fees based on gross sales. The
Company opened its first joint venture Roadhouse Grill restaurant in Milan,
Italy in November 2001, and it currently operates four restaurant locations in
Italy, including one which was opened subsequent to April 27,
2003.

By letter dated June 20, 2002, Cremonini notified the Company that it was
immediately suspending the performance of its obligations under the joint
venture agreement and ancillary agreements. The Company believes that the
original joint venture agreement remains in effect and is currently in
discussions with the Cremonini Group regarding the original agreement. No
assurances can be made as to the possible outcome of these discussions.
However, if the Company cannot reach an agreement with Cremonini, the Company
will attempt to make arrangements with one or more other candidates to develop
Roadhouse Grill restaurants in Europe. There can be no assurance that the
Company will be able to make such arrangements. Further, if arrangements can
be made, the terms may differ substantially from the terms of the joint venture
with Cremonini.




ITEM 2.  PROPERTIES

As of April 27, 2003, all but 12 of the Companys open restaurants were
located in leased space. Initial lease expirations range from five to 20
years, with the majority of the leases providing the Company with renewal
options extending the lease term. All of the Companys leases provide for a
minimum annual rent, and several leases call for annual or other escalations at
various points in the lease term or for additional rent based on sales volume
at the particular location over specified minimum levels. Generally, the
leases are triple net leases, which require the Company to pay the costs of
insurance, taxes and a portion of the lessors operating costs. All 12 of the
Companys restaurants that are located on owned land are pledged as collateral
on the debt used to acquire the land and building. The Company believes its
facilities are in satisfactory condition, are suitable for their intended use
and are, in the aggregate, sufficient for the present business needs of the
Company.

The Company owns a 30,500 square foot office building in Pompano Beach,
Florida. The Company relocated its corporate headquarters to this facility in
October 1999. The Company occupies approximately 19,000 square feet of the new
facility and has leased the remaining 11,500 square feet for a five-year period
ending in December 2005 with an option to renew by the tenant for an additional
five-year period.

The Company also owns the land and building related to a closed store that
is currently held for sale. The Company is presently actively marketing this
facility and pursuing a sale of this facility during fiscal year 2004.

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ITEM 3.  LEGAL PROCEEDINGS

BANKRUPTCY

Please refer to ITEM 1, BUSINESS, RECENTLY COMPLETED PROCEEDINGS UNDER
CHAPTER 11 OF THE BANKRUPTCY CODE, for a complete discussion of the Companys
recently completed Chapter 11 bankruptcy proceedings.

CLASS ACTION SUIT AND SEC INFORMAL INVESTIGATION

As a result of a review of its accounting records, the Company, in August
2001, restated its previously reported, audited financial statements for the
fiscal years ended April 30, 2000 and April 25, 1999, and the related,
unaudited quarterly financial statements for those periods, as well as the
unaudited financial statements for the quarters ended July 30, 2000, October
29, 2000, and January 28, 2001. In connection with the restatement, the
Company filed amended Form 10-Ks for fiscal years 2000 and 1999, and amended
Form 10-Qs for the fiscal 2001, 2000 and 1999 quarters containing the restated
financial statements.

The restatement occurred because of a determination by the Company that
certain operating expenses were more appropriately attributable to fiscal 2000
and 1999 than later periods. The restatement resulted in a decrease in net
income for fiscal 2000 and 1999, and the related quarterly periods, and an
increase in net income for the quarters ended July 30, 2000, October 29, 2000
and January 28, 2001.

On April 10, 2002, a purported class action complaint alleging violations
of federal securities laws was filed in the United States District Court for
the Southern District of Florida against the Company, the then chairman of the
Companys board of directors, and the Companys president and chief executive
officer. This action (the Action) is styled: Sears v. Roadhouse Grill, Inc,
et al., Case No. 02-CV-60493.

The Action purports to be brought on behalf of all purchasers of the stock
of the Company between August 31, 1998 and August 1, 2001, with certain
exclusions, and appears to be based principally, if not solely, on the fact
that certain financial statements have been restated as described above. The
Company believes there is no merit to the Action. The Company further believes
that, under section 510(b) of the Bankruptcy Code, even if claims of the type
asserted in the Action are allowed, they will be subordinated, in the Chapter
11 Case, to the claims of all creditors of the Company. Accordingly, such
claims are treated under the Confirmed Plan of Reorganization as subordinate to
the claims of all creditors.

As the Company filed for relief under Chapter 11 of the United States
Bankruptcy Code on April 16, 2002, any claims in this Action should have been
filed by the plaintiffs with the Court. If the plaintiffs had filed a claim
with the Court, their claim against the Company would have been subordinated to
the claims of all creditors of the Company. However, no claim against the
Company was filed during the bankruptcy proceedings. Based on discussions with
the Companys legal counsel, the Company believes that the class action suit is
not likely to result in an unfavorable outcome to the Company. The Company
further believes that even if the

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action brought by the plaintiffs is successful, the plaintiffs will share only
in the distribution of stock in the reorganized company with the holders of the
existing Common Stock.

On July 26, 2002, the plaintiffs filed an amended class action complaint.
The individual defendants filed a motion to dismiss the amended complaint on
September 4, 2002, and the plaintiffs filed an opposition thereto on October 3,
2002. On April 4, 2003, the court heard arguments on the motion to dismiss and
dismissed the amended complaint. The plaintiffs filed a second amended class
action complaint on May 5, 2003. The individual defendants filed a motion to
dismiss the second amended class action complaint on June 4, 2003, to which
plaintiffs have not yet responded.

The Company believes that the individual defendants are covered, with
respect to the claims asserted in the Action, by the Companys Directors and
Officers Liability Insurance Policy issued by National Union Fire Insurance Co.
of Pittsburgh, Pa. The policy provides directors and officers liability
coverage and corporate securities coverage. It has aggregate limits of
$5,000,000 and a self-insured retention for securities claims of $250,000.
With respect to the case against the defendants, to the extent permitted by law
the Company intends to indemnify the individual defendants.

On August 3, 2001, the Securities and Exchange Commission (SEC) informed
the Company that it is conducting an informal investigation regarding the
restatement of the Companys audited financial statements for the fiscal years
ended 2000 and 1999 and the first three fiscal quarters of fiscal 2001. The
Company has cooperated fully with the SEC and will continue to do so. The
outcome of the SEC inquiry cannot be determined as of the date of this report.

OTHER

The Company is a party to certain legal proceedings arising in the
ordinary course of business. While it is not possible to predict or determine
the outcome of any of these proceedings, the Company does not believe that any
resulting liability will have a material adverse effect on the Companys
financial position or results of operations or its business.




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

Effective May 15, 2003, the following actions were taken upon the written
consent of the holders of a majority of the outstanding shares of the common
stock of the Company: (a) the election of five directors to serve until the
next annual meeting of shareholders (see Item 10 for the identity of the
Companys directors), or until their successors are elected and qualified, (b)
the ratification of the appointment of Grant Thornton LLP as the Companys
independent auditors for fiscal year 2003, (c) the approval of Amended and
Restated Articles of Incorporation for the Company and (d) the approval of the
2003 Stock Option Plan.

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PART II




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

MARKET INFORMATION

As of April 27, 2003, the Companys authorized and issued common equity
consisted of 29,220,663 shares of common stock, par value $0.03 per share. The
Companys common stock is currently quoted on the Pink Sheets under the symbol
GRLL.PK. The Companys common stock previously traded on the Nasdaq National
Market until the stock was delisted in May 2002.

The following table sets forth, for the periods indicated, the highest and
lowest closing sale prices for the common stock, as reported by the Nasdaq
National Market through May 2002 and on the Pink Sheets thereafter:

|                                 |  |         |      |        |  |  |      | 
|-------------------------------- |  | ------- | ---- | ------ |  |  | ---- | 
|                                 |  | HIGH($) |      | LOW($)
|                                 |  |         |      |       
|FISCAL 2002                      |  |         |      |        |  |  |      | 
|First Quarter                    |  |         | 1.72 |        |  |  | 1.10 | 
|Second Quarter                   |  |         | 1.40 |        |  |  | 0.25 | 
|Third Quarter                    |  |         | 0.55 |        |  |  | 0.28 | 
|Fourth Quarter                   |  |         | 0.35 |        |  |  | 0.24 | 
|FISCAL 2003                      |  |         |      |        |  |  |      | 
|First Quarter                    |  |         | 0.60 |        |  |  | 0.05 | 
|Second Quarter                   |  |         | 0.80 |        |  |  | 0.10 | 
|Third Quarter                    |  |         | 0.80 |        |  |  | 0.10 | 
|Fourth Quarter                   |  |         | 0.30 |        |  |  | 0.05 | 
|FISCAL 2004                      |  |         |      |        |  |  |      | 
|First Quarter (to July 23, 2003) |  |         | 0.45 |        |  |  | 0.15 | 

DIVIDEND POLICY

The Company has not declared or paid any cash dividends or distributions
on its capital stock. The Company does not intend to pay any cash dividends on
its common stock in the foreseeable future, as the current policy of the
Companys Board of Directors is to retain all earnings, if any, to support
operations and finance expansion. Future declaration and payment of dividends,
if any, will be determined in light of then current conditions, including the
Companys

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earnings, operations, capital requirements, financial condition, and other
factors deemed relevant by the Board of Directors, at their discretion.

SHAREHOLDERS

As of
July 23, 2003, there were approximately 80 shareholders of record of the Companys
common stock. A portion of the Companys outstanding common stock is held of
record in broker street name for the benefit of individual investors and the
Company believes that as of the date of this report there are
approximately 900
beneficial holders of its common stock.

EQUITY COMPENSATION PLAN INFORMATION

See Item 12.

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ITEM 6.  SELECTED FINANCIAL DATA

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

STATEMENT OF
OPERATIONS DATA:

|                                                                                                               |                                |                     |         |         |        |        |         |         |        |        |         |         |        |   |         |         |        |   |         |         |        |  
|-------------------------------------------------------------------------------------------------------------- | ------------------------------ | ------------------- | ------- | ------- | ------ | ------ | ------- | ------- | ------ | ------ | ------- | ------- | ------ | - | ------- | ------- | ------ | - | ------- | ------- | ------ | -
|                                                                                                               |                                |                     |         | Fiscal  |        | Fiscal |         | Fiscal  |        | Fiscal |         | Fiscal 
|(dollars in thousands, except per                                                                              |                                | 2003                |         | 2002    |        | 2001   |         | 2000    |        | 1999  
|share data):                                                                                                   |                                |                     |         |         |        |        |         |         |        |       
|Total revenues                                                                                                 |                                | $                   | 140,924 |         |        | $      | 158,982 |         |        | $      | 168,055 |         |        | $ | 148,897 |         |        | $ | 121,067 |        
|                                                                                                               |                                |                     |         |         |        |        |         |         |        |        |         |         |        |   |         |         |        |   |         |         |        |  
|Cost of restaurant sales:                                                                                      |                                |                     |         |         |        |        |         |         |        |        |         |         |        |   |         |         |        |   |         |        
|                                                                                                               | Food and beverage              |                     |         | 47,439  |        |        |         | 55,066  |        |        |         | 59,112  |        |   |         | 50,268  |        |   |         | 40,606  |       
|                                                                                                               | Labor and benefits             |                     |         | 47,860  |        |        |         | 51,817  |        |        |         | 54,059  |        |   |         | 43,512  |        |   |         | 33,969  |       
|                                                                                                               | Occupancy and other            |                     |         | 34,567  |        |        |         | 37,580  |        |        |         | 39,269  |        |   |         | 30,067  |        |   |         | 23,089  |       
|                                                                                                               | Pre-opening expenses           |                     |         | 124     |        |        |         | 477     |        |        |         | 2,481   |        |   |         | 2,387   |        |   |         | 1,318   |       
|                                                                                                               |                                |                     |         |         |        |        |         |         |        |        |         |         |        |   |         |         |        |   |         |         |        |  
|                                                                                                               | Total cost of restaurant sales |                     |         | 129,990 |        |        |         | 144,940 |        |        |         | 154,921 |        |   |         | 126,234 |        |   |         | 98,982  |       
|                                                                                                               |                                |                     |         |         |        |        |         |         |        |        |         |         |        |   |         |         |        |   |         |         |        |  
|Depreciation and amortization                                                                                  |                                |                     | 7,460   |         |        |        | 8,991   |         |        |        | 10,297  |         |        |   | 8,560   |         |        |   | 7,351   |        
|General and administrative
expenses                                                                            |                                |                     | 6,956   |         |        |        | 9,106   |         |        |        | 10,954  |         |        |   | 8,241   |         |        |   | 6,766   |        
|Asset impairment                                                                                               |                                |                     | 5,854   |         |        |        | 7,507   |         |        |        | 3,066   |         |        |   |        |         |        |   |        |        
|Restructuring charge                                                                                           |                                |                     | 46      |         |        |        | 5,086   |         |        |        |        |         |        |   |        |         |        |   |        |        
|Reorganization expenses                                                                                        |                                |                     | 2,726   |         |        |        | 876     |         |        |        |        |         |        |   |        |         |        |   |        |        
|                                                                                                               |                                |                     |         |         |        |        |         |         |        |        |         |         |        |   |         |         |        |   |         |         |        |  
|                                                                                                               | Total operating expenses       |                     |         | 153,032 |        |        |         | 176,506 |        |        |         | 179,238 |        |   |         | 143,035 |        |   |         | 113,099 |       
|                                                                                                               |                                |                     |         |         |        |        |         |         |        |        |         |         |        |   |         |         |        |   |         |         |        |  
|Operating (loss) income                                                                                        |                                |                     | (12,108 | )       |        |        | (17,524 | )       |        |        | (11,183 | )       |        |   | 5,862   |         |        |   | 7,968   |        
|                                                                                                               |                                |                     |         |         |        |        |         |         |        |        |         |         |        |   |         |         |        |   |         |         |        |  
|Other expense:                                                                                                 |                                |                     |         |         |        |        |         |         |        |        |         |         |        |   |         |         |        |   |         |        
|                                                                                                               | Interest expense, net          |                     |         | (2,289  | )      |        |         | (3,810  | )      |        |         | (3,655  | )      |   |         | (2,301  | )      |   |         | (2,210  | )     
|                                                                                                               | Other, net                     |                     |         | 75      |        |        |         | (60     | )      |        |         | 800     |        |   |         |        |        |   |         | (3      | )     
|                                                                                                               |                                |                     |         |         |        |        |         |         |        |        |         |         |        |   |         |         |        |   |         |         |        |  
|                                                                                                               |                                | Total other expense |         |         | (2,214 | )      |         |         | (3,870 | )      |         |         | (2,855 | ) |         |         | (2,301 | ) |         |         | (2,213 | )
|                                                                                                               |                                |                     |         |         |        |        |         |         |        |        |         |         |        |   |         |         |        |   |         |         |        |  
|(Loss) income before income
taxes, extraordinary gain, and
cumulative effect of change in
accounting principle |                                |                     | (14,322 | )       |        |        | (21,394 | )       |        |        | (14,038 | )       |        |   | 3,561   |         |        |   | 5,755   |        
|Income tax (benefit) expense                                                                                   |                                |                     | (1,241  | )       |        |        | 49      |         |        |        | 1,818   |         |        |   | 78      |         |        |   | 47      |        
|                                                                                                               |                                |                     |         |         |        |        |         |         |        |        |         |         |        |   |         |         |        |   |         |         |        |  
|(Loss) income before
extraordinary gain and
cumulative effect of change in
accounting principle                |                                |                     | (13,081 | )       |        |        | (21,443 | )       |        |        | (15,856 | )       |        |   | 3,483   |         |        |   | 5,708   |        

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|                                                                                   |  |      |            |        |  |        |           |        |  |        |           |        |  |   |           |   |  |   |           |  |  | 
|---------------------------------------------------------------------------------- |  | ---- | ---------- | ------ |  | ------ | --------- | ------ |  | ------ | --------- | ------ |  | - | --------- | - |  | - | --------- |  |  | 
|                                                                                   |  |      |            | Fiscal |  | Fiscal |           | Fiscal |  | Fiscal |           | Fiscal
|(dollars in thousands, except per                                                  |  | 2003 |            | 2002   |  | 2001   |           | 2000   |  | 1999  
|share data):                                                                       |  |      |            |        |  |        |           |        |  |       
|Extraordinary gain                                                                 |  |      | 1,838      |        |  |        |          |        |  |        |          |        |  |   |          |   |  |   |          | 
|                                                                                   |  |      |            |        |  |        |           |        |  |        |           |        |  |   |           |   |  |   |           | 
|(Loss) income before cumulative
effect of change in accounting
principle           |  |      | (11,243    | )      |  |        | (21,443   | )      |  |        | (15,856   | )      |  |   | 3,483     |   |  |   | 5,708     | 
|Cumulative effect of change in
accounting principle (net of tax
benefit of $248)   |  |      |           |        |  |        |          |        |  |        |          |        |  |   | (877      | ) |  |   |          | 
|                                                                                   |  |      |            |        |  |        |           |        |  |        |           |        |  |   |           |   |  |   |           | 
|Net (loss) income                                                                  |  | ($   | 11,243     | )      |  | ($     | 21,443    | )      |  | ($     | 15,856    | )      |  | $ | 2,606     |   |  | $ | 5,708     | 
|                                                                                   |  |      |            |        |  |        |           |        |  |        |           |        |  |   |           |   |  |   |           | 
|Basic net (loss) income per
common share                                           |  |      |            |        |  |        |           |        |  |        |           |        |  |   |           |   |  |   |           | 
|Basic (loss) income before
cumulative effect of change in
accounting principle     |  | ($   | 0.56       | )      |  | ($     | 2.21      | )      |  | ($     | 1.63      | )      |  | $ | 0.36      |   |  | $ | 0.60      | 
|Cumulative effect of change in
accounting principle                                |  |      |           |        |  |        |          |        |  |        |          |        |  |   | (0.09     | ) |  |   |          | 
|                                                                                   |  |      |            |        |  |        |           |        |  |        |           |        |  |   |           |   |  |   |           | 
|Basic net (loss) income per
common share                                           |  | ($   | 0.56       | )      |  | ($     | 2.21      | )      |  | ($     | 1.63      | )      |  | $ | 0.27      |   |  | $ | 0.60      | 
|                                                                                   |  |      |            |        |  |        |           |        |  |        |           |        |  |   |           |   |  |   |           | 
|Diluted net (loss) income per
common share:                                        |  |      |            |        |  |        |           |        |  |        |           |        |  |   |           |   |  |   |           | 
|Diluted (loss) income before
cumulative effect of change in
accounting principle   |  | ($   | 0.56       | )      |  | ($     | 2.21      | )      |  | ($     | 1.63      | )      |  | $ | 0.36      |   |  | $ | 0.59      | 
|Cumulative effect of change in
accounting principle                                |  |      |           |        |  |        |          |        |  |        |          |        |  |   | (0.09     | ) |  |   |          | 
|                                                                                   |  |      |            |        |  |        |           |        |  |        |           |        |  |   |           |   |  |   |           | 
|Diluted net (loss) income per
common share                                         |  | ($   | 0.56       | )      |  | ($     | 2.21      | )      |  | ($     | 1.63      | )      |  | $ | 0.27      |   |  | $ | 0.59      | 
|                                                                                   |  |      |            |        |  |        |           |        |  |        |           |        |  |   |           |   |  |   |           | 
|Weighted average common
Shares outstanding                                         |  |      | 20,000,744 |        |  |        | 9,708,741 |        |  |        | 9,708,741 |        |  |   | 9,708,741 |   |  |   | 9,536,631 | 
|                                                                                   |  |      |            |        |  |        |           |        |  |        |           |        |  |   |           |   |  |   |           | 
|Weighted average common shares
and share equivalents
outstanding assuming dilution |  |      | 20,000,744 |        |  |        | 9,708,741 |        |  |        | 9,708,741 |        |  |   | 9,792,019 |   |  |   | 9,668,469 | 
|                                                                                   |  |      |            |        |  |        |           |        |  |        |           |        |  |   |           |   |  |   |           | 

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BALANCE SHEET DATA:

|                                                              |  |        |        |        |  |        |        |        |  |        |         |  |  |   |         |  |  |   |        | 
|------------------------------------------------------------- |  | ------ | ------ | ------ |  | ------ | ------ | ------ |  | ------ | ------- |  |  | - | ------- |  |  | - | ------ | 
|                                                              |  | Fiscal |        | Fiscal |  | Fiscal |        | Fiscal |  | Fiscal
|(dollars in thousands,                                        |  | 2003   |        | 2002   |  | 2001   |        | 2000   |  | 1999  
|except share data)                                            |  |        |        |        |  |        |        |        |  |       
|Cash and cash equivalents                                     |  | $      | 2,956  |        |  | $      | 3,193  |        |  | $      | 1,582   |  |  | $ | 378     |  |  | $ | 975    | 
|Total current assets                                          |  |        | 7,393  |        |  |        | 7,618  |        |  |        | 8,889   |  |  |   | 4,868   |  |  |   | 5,552  | 
|Property and equipment                                        |  |        | 60,024 |        |  |        | 71,926 |        |  |        | 87,204  |  |  |   | 92,204  |  |  |   | 77,821 | 
|Total assets                                                  |  |        | 71,304 |        |  |        | 83,354 |        |  |        | 100,328 |  |  |   | 104,414 |  |  |   | 90,972 | 
|Total current liabilities                                     |  |        | 19,474 |        |  |        | 10,888 |        |  |        | 56,692  |  |  |   | 21,979  |  |  |   | 11,953 | 
|Liabilities subject to
compromise  pre-petition              |  |        |       |        |  |        | 54,757 |        |  |        |        |  |  |   |        |  |  |   |       | 
|Liabilities subject to
compromise  GAP                       |  |        |       |        |  |        | 2,181  |        |  |        |        |  |  |   |        |  |  |   |       | 
|Long-term debt, including
current portion *                   |  |        | 39,559 |        |  |        |       |        |  |        | 42,179  |  |  |   | 25,661  |  |  |   | 19,505 | 
|Obligations under capital
leases, including current
portion * |  |        | 6,714  |        |  |        |       |        |  |        | 5,742   |  |  |   | 6,479   |  |  |   | 11,933 | 
|Total liabilities                                             |  |        | 60,519 |        |  |        | 67,826 |        |  |        | 63,357  |  |  |   | 51,587  |  |  |   | 40,751 | 
|Total shareholders equity                                    |  |        | 10,785 |        |  |        | 15,528 |        |  |        | 36,971  |  |  |   | 52,827  |  |  |   | 50,221 | 

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




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

GENERAL

The Company operates, franchises and licenses high-quality, full-service,
casual dining restaurants under the name Roadhouse Grill. The Company was
founded in 1992 and opened its first restaurant in 1993. As of April 27, 2003,
there were 70 Company owned Roadhouse Grill restaurants located in Alabama,
Arkansas, Florida, Georgia, Louisiana, Mississippi, New York, North Carolina,
Ohio, and South Carolina. Of these, 35 are located in Florida. One additional
restaurant in North Carolina was opened subsequent to April 27, 2003. The
Company also has three franchised restaurants in Malaysia, one franchised
restaurant in Brasilia, Brazil, one franchised restaurant in Las Vegas, Nevada,
one franchised restaurant in Cincinnati, Ohio, and four joint venture
restaurants in Italy, including one which was opened subsequent to
April 27, 2003.

REVENUES

The Companys revenues are derived primarily from the sale of food and
beverages. In fiscal year 2003, restaurant sales generated from lunch and
dinner amounted to approximately 26% and 74% of restaurant sales, respectively,
as compared to 27% and 73%, respectively, in fiscal year 2002. Restaurant
sales of food and beverages accounted for approximately 90% and 10%,
respectively, of total restaurant sales in each of fiscal years 2003 and 2002.
Franchise and management fees during fiscal year 2003

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accounted for less than 1% of the Companys total revenues. Restaurant operating expenses include food
and beverage, labor, direct operating and occupancy costs. Direct operating
costs consist primarily of costs of expendable supplies, marketing and
advertising expense, maintenance, utilities and restaurant general and
administrative expenses. Occupancy costs include rent, real estate and
personal property taxes and insurance. Certain elements of the Companys
restaurant operating expenses, including direct operating and occupancy costs
and to a lesser extent labor costs, are relatively fixed.

Of the Companys 71 currently operating Company-owned restaurants, one was
opened in April 2003 and one was opened in June 2003. The Companys new
restaurants can be expected to generate above-average sales during the initial
weeks that the restaurant is open, commonly referred to as the honeymoon
period. As the restaurant is open longer, sales generally decline after
initial trial by guests. There is no assurance that a new Roadhouse Grill
restaurant will attain profitable operations. Furthermore, costs during the
first several months of operation can be expected to be higher than the
Companys average costs, primarily cost of food and beverage sales and labor
costs. There is no assurance that these costs will decline to more normalized
levels as the restaurant matures.

The average cash investment of the 69 Company-owned Roadhouse Grill
restaurants open the entire 52 weeks in fiscal year 2003 was approximately $1.3
million, including building structures (where applicable), building or
leasehold improvements and equipment and fixtures, but excluding land and
pre-opening costs. The average land acquisition cost for the 12 restaurant
sites operating and owned by the Company was approximately $838,000. The
average annual occupancy cost for the restaurant sites leased by the Company is
approximately $214,000.

During the second and fourth quarters of fiscal 2002, the Company
recognized impairment losses and restructuring charges of $5.8 million and $6.8
million, respectively, for the write-down of assets at 18 Company-owned
restaurants at which operations had ceased or at which operations are currently
being closed. During the second quarter of fiscal 2003, the Company recognized
an additional asset impairment of $5.1 million relating primarily to certain
restaurants that are not performing as expected and fixtures and equipment
owned or relating to capital leases at certain of the closed restaurants. The
Company also recognized during the second quarter of fiscal 2003 a
restructuring charge of $0.1 million primarily relating to finalizing the
estimated lease commitment for a closed restaurant. Also, during the thirteen
weeks ended April 27, 2003, the Company recognized an asset impairment of $0.8
million relating to the final closure of the restaurant sites discussed above
and an analysis of the value of the equipment removed and retained from these
locations. The Company closed 13 of the restaurants by the end of fiscal year
2002 and four restaurants were closed during the thirteen weeks ended July 28,
2002. The remaining restaurant continues to be operated while the Company is
considering a possible sale.

CRITICAL ACCOUNTING POLICIES

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

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PROPERTY AND EQUIPMENT

The Company accounts for long-lived assets in accordance with SFAS No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets. This
statement requires that long-lived assets be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. The Company regularly reviews the performance of
its individual restaurants to identify possible under performing operations
that should be assessed for possible impairments of long-lived assets. As part
of this analysis, management considers factors that have in the past and may
continue to impact operating results. Recoverability of assets to be held and
used is measured by a comparison of the carrying amount of an asset to the
future net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the assets exceeds fair value of the
assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell.

INTANGIBLE ASSETS

The Company accounts for intangible assets in accordance with SFAS No.
142, Goodwill and Other Intangible Assets. As of April 27, 2003, the Company
had unamortized goodwill in the amount of $1.5 million and unamortized
identifiable intangible assets in the amount of $0.4 million. In accordance
with SFAS No. 142, goodwill is subject to an annual impairment test based on
its fair value and no amortization of goodwill is recorded. The intangible
assets which have been determined to have a finite life are being amortized
over their useful lives.

USE OF ESTIMATES

The preparation of the Consolidated Financial Statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results,
particularly with respect to matters impacted by the proceedings under Chapter
11, could differ materially from those estimates. Amounts reported in the
Companys Consolidated Financial Statements that are based, in part, on the use
of estimates include reserves relating to the collectibility of accounts
receivable, insurance reserves relating to claim costs required to be funded by
the Company, the recoverability of deposits and other prepaid items, estimated
accrued property taxes and other accrued liabilities for which actual invoices
have not yet been received and the liability for unredeemed gift certificates
and gift cards. Various assumptions and other factors underlie the
determination of these significant estimates. The process of determining
significant estimates is fact specific and takes into account factors such as
historical experience, current and expected economic conditions, product mix,
and in some cases, actuarial techniques. Roadhouse Grill constantly
re-evaluates these significant factors and makes adjustments where facts and
circumstances dictate.

Management believes that the assumptions and other factors used to
determine these estimates are reasonable and that, with the exception of
insurance reserves relating to claim costs required to be funded by the
Company, changes in these assumptions would not have a material impact on the
Companys financial position or results of operations. In regards to insurance
reserves, recorded liabilities are based upon an estimate of the total amount
that may be paid to settle claims required to be funded by the Company and

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incurred through the balance sheet date including consideration of amounts
paid-to-date in relation to the individual claims, an analysis of the loss
development on all reported claims, potential legal or other related costs and
any stop loss limits applicable under the Companys insurance policies. Such
reserves are subject to change based upon any development that occurs in
relation to the outstanding claims subsequent to the preparation of the
Companys Consolidated Balance Sheet. As of April 27, 2003 and April 28, 2002,
total recorded insurance reserves were $2.0 million and $1.1 million,
respectively.

In addition, asset impairment charges, restructuring charges, and the
reserve for restructuring are predominantly based on estimates of the market
value of assets of which the Company plans to dispose and the amount of future
cash flows estimated to be realized relating to impaired assets that are
anticipated to be utilized in the Company operations in the future or
expenditures estimated to be used to settle the outstanding obligations. Such
estimates will also be affected by the time interval required to dispose of
those assets to be sold. The assumptions used, particularly in regards to
estimates of future cash flows to be realized relating to impaired or
potentially impaired assets, are critical in assessing a potential impairment
and, if any, estimating the amount of the impairment. These assumptions
require consideration and projection of future trends in key operating ratios
and the timing and impact of possible changes in operations relating to
specific assets. Changes in these assumptions could have a material impact on
the timing and amount of possible asset impairments and therefore the Companys
results of operations.

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RESULTS OF OPERATIONS

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

STATEMENTS OF OPERATIONS
DATA:

|                                         |                          |                                |       |        |      |        |       |        |      |  |       |       |      | 
|---------------------------------------- | ------------------------ | ------------------------------ | ----- | ------ | ---- | ------ | ----- | ------ | ---- |  | ----- | ----- | ---- | 
|                                         |                          |                                |       | Fiscal |      | Fiscal |       | Fiscal
|                                         |                          |                                |       | 2003   |      | 2002   |       | 2001  
|                                         |                          |                                |       |        |      |        |       |       
|Total revenues                           |                          |                                | 100.0 | %      |      |        | 100.0 | %      |      |  | 100.0 | %    
|Cost of restaurant sales:                |                          |                                |       |        |      |        |       |        |      |  |       |      
|                                         | Food and beverage        |                                |       | 33.7   |      |        |       | 34.6   |      |  |       | 35.2  |     
|                                         | Labor and benefits       |                                |       | 34.0   |      |        |       | 32.6   |      |  |       | 32.2  |     
|                                         | Occupancy and other      |                                |       | 24.5   |      |        |       | 23.7   |      |  |       | 23.4  |     
|                                         | Pre-opening expenses     |                                |       | 0.0    |      |        |       | 0.3    |      |  |       | 1.5   |     
|                                         |                          |                                |       |        |      |        |       |        |      |  |       |      
|                                         |                          | Total cost of restaurant sales |       |        | 92.2 |        |       |        | 91.2 |  |       |       | 92.3 | 
|Depreciation and amortization            |                          |                                | 5.3   |        |      |        | 5.7   |        |      |  | 6.1   |      
|General and administrative expenses      |                          |                                | 5.0   |        |      |        | 5.7   |        |      |  | 6.5   |      
|Asset impairment                         |                          |                                | 4.2   |        |      |        | 4.7   |        |      |  | 1.8   |      
|Restructuring charge                     |                          |                                | 0.0   |        |      |        | 3.2   |        |      |  |      |      
|Reorganization expenses                  |                          |                                | 1.9   |        |      |        | 0.6   |        |      |  |      |      
|                                         |                          |                                |       |        |      |        |       |        |      |  |       |      
|                                         | Total operating expenses |                                |       | 108.6  |      |        |       | 111.1  |      |  |       | 106.7 |     
|                                         |                          |                                |       |        |      |        |       |        |      |  |       |      
|                                         | Operating loss           |                                |       | (8.6   | )    |        |       | (11.1  | )    |  |       | (6.7  | )   
|Total other expense                      |                          |                                | (1.6  | )      |      |        | (2.4  | )      |      |  | (1.7  | )    
|                                         |                          |                                |       |        |      |        |       |        |      |  |       |      
|Loss before taxes and extraordinary
gain |                          |                                | (10.2 | )      |      |        | (13.5 | )      |      |  | (8.4  | )    
|Income tax (benefit) expense             |                          |                                | (0.9  | )      |      |        |      |        |      |  | 1.1   |      
|                                         |                          |                                |       |        |      |        |       |        |      |  |       |      
|Loss before extraordinary gain           |                          |                                | (9.3  | )      |      |        | (13.5 | )      |      |  | (9.5  | )    
|Extraordinary gain                       |                          |                                | 1.3   |        |      |        |      |        |      |  |      |      
|                                         |                          |                                |       |        |      |        |       |        |      |  |       |      
|Net loss                                 |                          |                                | (8.0  | )%     |      |        | (13.5 | )%     |      |  | (9.5  | )%   
|                                         |                          |                                |       |        |      |        |       |        |      |  |       |      

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|                           |                     |      |  |        |   |        |  |        |   |  |  |    |  | 
|-------------------------- | ------------------- | ---- |  | ------ | - | ------ |  | ------ | - |  |  | -- |  | 
|                           |                     |      |  | Fiscal |   | Fiscal |  | Fiscal
|                           |                     | 2003 |  | 2002   |   | 2001  
|                           |                     |      |  |        |   |       
|RESTAURANT DATA:           |                     |      |  |        |   |        |  |        |   |  |  |   
|Company-owned restaurants: |                     |      |  |        |   |        |  |        |   |  |  |   
|                           | Beginning of period |      |  | 73     |   |        |  | 83     |   |  |  | 72 | 
|                           | Opened              |      |  | 1      |   |        |  | 3      |   |  |  | 11 | 
|                           | Closed              |      |  | (4     | ) |        |  | (13    | ) |  |  |   | 
|                           |                     |      |  |        |   |        |  |        |   |  |  |   
|                           | End of period       |      |  | 70     |   |        |  | 73     |   |  |  | 83 | 
|                           |                     |      |  |        |   |        |  |        |   |  |  |   
|Franchised restaurants:    |                     |      |  |        |   |        |  |        |   |  |  |   
|                           | Beginning of period |      |  | 7      |   |        |  | 7      |   |  |  | 5  | 
|                           | Opened              |      |  | 1      |   |        |  |       |   |  |  | 2  | 
|                           | Closed              |      |  | (2     | ) |        |  |       |   |  |  |   | 
|                           |                     |      |  |        |   |        |  |        |   |  |  |   
|                           | End of period       |      |  | 6      |   |        |  | 7      |   |  |  | 7  | 
|                           |                     |      |  |        |   |        |  |        |   |  |  |   
|Joint venture restaurants: |                     |      |  |        |   |        |  |        |   |  |  |   
|                           | Beginning of period |      |  | 1      |   |        |  |       |   |  |  |   | 
|                           | Opened              |      |  | 2      |   |        |  | 1      |   |  |  |   | 
|                           | Closed              |      |  |       |   |        |  |       |   |  |  |   | 
|                           |                     |      |  |        |   |        |  |        |   |  |  |   
|                           | End of period       |      |  | 3      |   |        |  | 1      |   |  |  |   | 
|                           |                     |      |  |        |   |        |  |        |   |  |  |   
|Total restaurants:         |                     |      |  |        |   |        |  |        |   |  |  |   
|                           | Beginning of period |      |  | 81     |   |        |  | 90     |   |  |  | 77 | 
|                           | Opened              |      |  | 4      |   |        |  | 4      |   |  |  | 13 | 
|                           | Closed              |      |  | (6     | ) |        |  | (13    | ) |  |  |   | 
|                           |                     |      |  |        |   |        |  |        |   |  |  |   
|                           | End of period       |      |  | 79     |   |        |  | 81     |   |  |  | 90 | 
|                           |                     |      |  |        |   |        |  |        |   |  |  |   

FIFTY-TWO WEEKS ENDED APRIL 27, 2003 (FISCAL YEAR 2003) COMPARED TO THE
FIFTY-TWO WEEKS ENDED APRIL 28, 2002 (FISCAL YEAR 2002)

Total revenues. Total revenues decreased $18.1 million, or 11.4%, from
$159.0 million for fiscal year 2002 to $140.9 million for fiscal year 2003.
This decrease is primarily attributable to the closing of 13 unprofitable
restaurants in fiscal year 2002 and four additional unprofitable restaurants in
the first quarter of fiscal year 2003. Revenues generated from these 17
restaurants totaled $0.3 million and $12.1 million during fiscal year 2003 and
2002, respectively. Sales at comparable restaurants for fiscal year 2003
decreased 6.0% compared with sales for fiscal year 2002. The Company believes
that this decrease is partially attributable to the decline in the economy as
well as the Companys bankruptcy proceedings. A restaurant is considered
comparable after its first 18 months of operation. The Company opened one new
restaurant during the fourth quarter of fiscal year 2002 and one additional new
restaurant during the fourth quarter of fiscal year 2003. Combined revenues
from these stores, which are not included in comparable restaurant sales, were
$3.0 million and $0.5 million during fiscal years 2003 and 2002, respectively.

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The Companys revenues and results of operations have been impacted by a
number of factors including economic conditions, concerns over its financial
condition, expenditures incurred relating to the bankruptcy and changes in
certain of its management positions. While these factors and the attention
that has been focused on bankruptcy related issues has had an impact on the overall
results of operations, certain markets, such as those in Ohio and Georgia, have
been impacted to a greater degree. On a consolidated basis, same store sales
have declined 8.4%, 6.8%, 5.4% and 3.3% over the first, second, third and
fourth quarters of fiscal year 2003, respectively, from the comparable periods
in fiscal year 2002. The Company has recently made management changes,
primarily in its corporate and regional operations positions, and implemented
other changes in its operations including the introduction of a new menu with
enhanced menu items in June 2003. Management believes that these changes will
positively impact sales and results of operations in fiscal 2004. See
Outlook below.

Food and beverage.Food and beverage costs decreased $7.7 million, or
14.0%, to $47.4 million for fiscal year 2003 from $55.1 million for fiscal year
2002. This decrease is primarily attributable to the restaurant closings
described above. As a percentage of sales, food and beverage costs decreased
by 0.9% to 33.7% for fiscal year 2003 from 34.6% for fiscal year 2002. The
decrease as a percentage of revenue can be attributed to bulk purchasing
agreements including significantly discounted pork purchases made when
available quantities exceeded normal demand and a reduction in chicken costs.
Meat costs, which historically represent approximately 44% of total food costs,
remained relatively constant at approximately 15.4% of total food sales in both
fiscal years 2003 and 2002.

Labor and benefits. Labor and benefits costs decreased $3.9 million, or
7.5%, to $47.9 million for fiscal year 2003 from $51.8 million for fiscal year
2002. The decrease is primarily due to the restaurant closings described
above. As a percentage of sales, labor and benefits costs increased 1.4% to
34.0% for fiscal year 2003 from 32.6% for fiscal year 2002. This increase is
due to the significant increase in workers compensation insurance and group
medical insurance costs, which represented 2.9% of revenues in fiscal year 2003
as compared to 1.3% in fiscal year 2002.

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

Pre-opening expenses.Pre-opening expenses decreased $0.4 million, or
80.0%, to $0.1 million in fiscal year 2003 from $0.5 million in fiscal year
2002. The decrease is due to the opening of only one restaurant in fiscal year
2003 compared to the opening of three restaurants in fiscal year 2002.

Depreciation and amortization.Depreciation and amortization decreased
$1.5 million, or 16.7%, to $7.5 million for fiscal year 2003 from $9.0 million
for fiscal year 2002. As a percentage of revenues, depreciation and
amortization decreased 0.4% to 5.3% for fiscal year 2003 from 5.7% for fiscal
year 2002. The decrease, both in dollars and as a percentage of revenues, is
due to the fact that depreciation expense was discontinued on idle facilities
and equipment as a result of closing restaurants (including leases rejected in
the Companys bankruptcy proceedings), due to equipment at some older
restaurants becoming fully depreciated and due to asset impairment charges
which were taken in 2002 and 2003 that reduced the carrying value of the
Companys property and equipment.

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General and administrative. General and administrative costs decreased
$2.1 million, or 23.1%, to $7.0 million for fiscal year 2003 as compared to
$9.1 million for fiscal year 2002. As a percentage of sales, general and
administrative costs decreased 0.7% from 5.7% for fiscal year 2002 to 5.0% for
fiscal year 2003. The decrease, both in dollars and as a percentage of
revenues, is the result of the Companys reduction in corporate overhead and
the consolidation of field management personnel.

Reorganization expenses. Reorganization expenses represent expenses
incurred relating to the Companys bankruptcy proceedings and reorganization
under Chapter 11 and primarily are comprised of legal, professional and
consulting services. Total reorganization expenses incurred in fiscal year
2003 were $2.7 million, or 1.9% of revenues, as compared to $0.9 million, or
0.6% of revenues, in fiscal year 2002. Management believes that no significant
reorganization expenses will be incurred in fiscal year 2004.

Asset impairment and restructuring charge. The Company recorded asset
impairment and restructuring charges in fiscal year 2002 totaling $7.5 million
and $5.1 million, respectively. These charges were related to the 17
restaurants that were closed as described above. During fiscal year 2003, the
Company recorded an asset impairment of $5.9 million relating to restaurants
that were not performing as expected and fixtures and equipment owned or
relating to capital leases at certain of the closed restaurants.

Total other expense.Total other expense decreased $1.7 million, or
43.6%, to $2.2 million for fiscal year 2003 from $3.9 million for fiscal year
2002. The decrease was primarily due to the forgiveness of the Companys
interest expense during the period of bankruptcy.

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

Extraordinary gain. The Company recognized an extraordinary gain during
fiscal year 2003 of $1.8 million relating to the forgiveness of debt resulting
from its Chapter 11 reorganization. The debt forgiveness is primarily
comprised of obligations that were canceled as a result of the bankruptcy
proceedings.

FIFTY-TWO WEEKS ENDED APRIL 28, 2002 (FISCAL YEAR 2002) COMPARED TO THE FIFTY-TWO WEEKS ENDED APRIL 29, 2001 (FISCAL YEAR 2001)

Total revenues. Total revenues decreased $9.1 million, or 5.4%, from
$168.1 million for fiscal year 2001 to $159.0 million for fiscal year 2002.
This decrease is primarily attributable to the 13 unprofitable restaurants in
fiscal year 2002. Sales at comparable stores for fiscal year 2002 decreased
4.5% compared with sales for fiscal year 2001. The Company believes that this
decrease is partially attributable to reduced marketing and advertising
expenditures in fiscal year 2002 as compared to fiscal year 2001 and partially
attributable to the decline in the economy, particularly after the events of
September 11, 2001. The Company spent 1.6% of revenue on marketing expense in
fiscal year 2002 versus 2.5% in fiscal year 2001. A restaurant is considered
comparable after its first 18 months of operation.

Food and beverage.Food and beverage costs decreased $4.0 million, or
6.7%, to $55.1 million for fiscal year 2002 from $59.1 million for fiscal year
2001. This decrease is primarily attributable to the closing of 13
unprofitable restaurants in fiscal year 2002. As a percentage of sales, food
and beverage costs decreased by 0.6% to 34.6% for fiscal year 2002 from 35.2%
for fiscal year 2001. The decrease as a

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percentage of revenue can be
attributed to the Company changing to a new food distribution company with
lower prices.

Labor and benefits. Labor and benefits costs decreased $2.3 million, or
4.1%, to $51.8 million for fiscal year 2002 from $54.1 million for fiscal year
2001. The decrease is primarily due to the closing of 13 unprofitable
restaurants in fiscal year 2002. As a percentage of sales, labor and benefits
costs increased 0.4% to 32.6% for fiscal year 2002 from 32.2% for fiscal year
2001. This increase is due to the fixed nature of management salaries.

Occupancy and other. Occupancy and other costs decreased $1.7 million, or
4.3%, to $37.6 million for fiscal year 2002 from $39.3 million for fiscal year
2001. As a percentage of sales, occupancy and other was 23.7% for fiscal year
2002 versus 23.4% for fiscal year 2001. The decrease in dollars is primarily
due to reduced advertising expenditures. The increase as a percentage of sales
is due to the fixed components such as rent expense.

Pre-opening expenses.Pre-opening expenses decreased $2.0 million, or
80.0%, to $0.5 million in fiscal year 2002 from $2.5 million in fiscal year
2001. The decrease is due to the opening of only three restaurants in fiscal
year 2002 compared to the opening of 11 restaurants in fiscal year 2001.

Depreciation and amortization.Depreciation and amortization decreased
$1.3 million, or 11.8%, to $9.0 million for fiscal year 2002 from $10.3 million
for fiscal year 2001. The decrease is due to the fact that depreciation
expense was discontinued on idle facilities and equipment as a result of
closing restaurants and due to equipment at some older restaurants becoming
fully depreciated.

General and administrative. General and administrative costs decreased
$1.9 million, or 17.3%, to $9.1 million for fiscal year 2002 as compared to
$11.0 million for fiscal year 2001. As a percentage of sales, general and
administrative costs decreased 0.8% from 6.5% for fiscal year 2001 to 5.7% for
fiscal year 2002. The decrease, both in dollars and as a percentage of sales,
is the result of the Companys reduction in corporate overhead and the
consolidation of field management.

Reorganization expenses. Reorganization expenses represent expenses
incurred relating to the Companys bankruptcy proceedings and reorganization
under Chapter 11 and primarily are comprised of legal, professional and
consulting services. Total reorganization expenses incurred in fiscal year
2002 were $0.9 million, or 0.6% of revenues. No reorganization expenses were
recorded in fiscal year 2001.

Asset impairment and restructuring charge.The Company recorded an asset
impairment and restructuring charge of $7.5 million and $5.1 million,
respectively, in fiscal year 2002 compared to a $3.1 million asset impairment
in fiscal year 2001. The asset impairment charge in fiscal year 2002 is
related to 13 stores the Company closed in fiscal year 2002 and the write down
of assets of four stores closed subsequent to year end. The asset impairment
charge taken in fiscal year 2001 was due to the impairment of assets at four of
the 13 stores closed in fiscal year 2002.

Total other expense.Total other expense increased $1.0 million, or
30.0%, to $3.9 million for fiscal year 2002 from $2.9 million for fiscal year
2001. The increase is primarily due to higher default interest rates as a
result of the Company becoming past due in its obligations.

Income tax (benefit) expense.The Company recorded income tax expense of
approximately $0.1 million for fiscal year 2002, compared to $1.8 million for
fiscal year 2001. The expense recorded in fiscal 2002 was due to state income
and franchise taxes. During the fourth quarter of fiscal year 2001, the
Company increased the valuation allowance for the deferred tax asset. Due to
losses incurred during fiscal year 2001, management believed that it was not
likely that the deferred tax assets would be realized in the future.

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LIQUIDITY AND CAPITAL RESOURCES

The Companys material financial commitments relate principally to its
working capital requirements and its obligations to make operating and capital
lease and term loan payments, monthly interest payments on its various loans
and lease payments in accordance with the terms of its real property leases.
As of April 27, 2003, total minimum annual payments required under the
Companys note and lease obligations, including interest thereon, were $17.1
million. In addition, capital requirements relating to the opening of new
restaurants have in the past been (and may in the future be) significant.

The Company opened one new restaurant in fiscal year 2003 at a total cost
of approximately $1.1 million. Also, the Company opened one additional
restaurant in June 2003 at a total cost of $1.8 million, of which $1.4 million
was expended prior to April 27, 2003. The Company does not currently expect to
open any additional company-owned restaurants in fiscal year 2004. At this
time, it is expected that the cash required to develop new restaurants beyond
fiscal 2004 will be funded from operations. Should cash from operations be
insufficient for future expansion and additional capital through debt and
equity sources be unavailable, there can be no assurance that the Company will
be able to open additional restaurants.

During fiscal year 2002, the Companys primary sources of working capital
were the sale-leaseback credit facility with Franchise Finance Corporation of
America (FFCA), which is described below and working capital provided by
operations. The FFCA debt was restructured as a result of the Confirmed Plan
of Reorganization. During fiscal year 2003, the Companys primary sources of
working capital were the debt restructuring and working capital provided by
operations. The Company also filed for federal income tax refunds totaling
approximately $1.2 million during fiscal year 2003, of which $0.6 million was
collected in fiscal year 2003 and the remaining $0.6 million was collected in
fiscal year 2004. The Company has also filed for approximately $0.2 million in
additional federal and state income tax refunds in fiscal year 2004, which it
presently expects to collect during the first half of the fiscal year. The
Company expects that its primary sources of working capital in fiscal year 2004
will be cash flow from operations, the collection of income tax refunds and the
sale of food and beverage credits and possible refinance of the mortgage on its
corporate headquarters building as more fully described in Notes 9 and 20 to
the Consolidated Financial Statements.

The Company has experienced significant cash flow problems in the past.
The Company believes that its ability to generate cash from operations is
dependent upon, among other things, increased demand for its products, a
continued commitment to providing an excellent dining experience for its
customers, the development and implementation of successful marketing
strategies and continuing its efforts to reduce its operating costs. The
Company has implemented revenue enhancement programs including the
implementation of a new menu with enhanced menu items in June 2003 along with
cost reduction initiatives designed to produce positive cash flow and achieve
sustainable profitable operations. There can be no assurance that these
initiatives will be effective in generating profits or producing sufficient
cash flows to fund operating requirements, including debt repayments and lease
obligations.

See Notes 7, 8 and 9 to the Consolidated Financial Statements for a
description of the Companys current outstanding debt and capital and operating
lease obligations. As of April 27, 2003, total minimum annual payments
required under the Companys note and lease obligations, including interest
thereon, were $17.1 million.

Capital requirements relating to the implementation of the Companys
business plan have been and will continue to be significant. If cash generated
from the Companys operations and other possible sources

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described above are
insufficient to fund the Companys financial commitments and working capital
requirements (including amounts required to support future growth), the Company
will have to obtain additional financing. There can be no assurance that
additional debt and/or equity financing will be available on terms acceptable
to the Company, or at all. In the event the Company is unable to secure needed
additional financing, the Company may have to significantly curtail its
operations.

SUMMARY OF CASH FLOWS

Cash provided by operating activities during fiscal year 2003 was $3.7
million, as compared with $7.6 million provided by operating activities during
fiscal year 2002. The primary source of cash for fiscal year 2003 was the net
income generated from operations excluding reorganization expenses and non cash
expenses including depreciation, amortization and asset impairment. The
primary sources of cash for fiscal year 2002 were a decrease in income tax
receivable of $2.2 million, a decrease in accounts receivable of $1.0 million
and net cash generated from operations.

Cash used in investing activities during fiscal year 2003 was $1.4
million, as compared to $2.6 million used during fiscal year 2002. Cash used
in investing activities in both fiscal years consisted primarily of purchases
of property, plant and equipment, offset to some extent in fiscal year 2003 by
proceeds from sales of property and equipment.

Cash provided by financing activities during fiscal year 2003 was less
than $0.1 million, as compared to $2.2 million used in financing activities
during fiscal year 2002. Cash provided by financing activities during fiscal
year 2003 included $5.0 million in proceeds from issuance of common stock,
offset by repayments of long term debt and capital lease obligations. Cash
used in financing activities in fiscal year 2002 consisted of repayments of
long term debt and capital lease obligations.

CAPITAL EXPENDITURES

The Company opened one new restaurant in fiscal year 2003 at a total cost
of approximately $1.1 million. Also, the Company opened one additional
restaurant in June 2003 at a total cost of $1.8 million, of which $1.4 million
was expended prior to April 27, 2003. The Company does not currently expect to
open any additional Company-owned restaurants in fiscal 2004. At this time, it
is expected that the cash required to develop new Company-owned restaurants
beyond 2004 will be funded by cash from operations.

SEASONALITY AND QUARTERLY RESULTS

The Companys operating results fluctuate seasonally because of its
geographic concentration. Of the 71 restaurants currently owned and operated
by the Company, 35 are located in generally residential or light commercial
areas in Florida. The Companys restaurant sales generally increase from
November through April, the peaks of the Florida tourism season, and generally
decrease from May through October. In addition, because of its present
geographic concentration, the Companys results of operations may be materially
adversely affected by a decline in tourism in Florida, downturns in Floridas
economy or by hurricanes or other adverse weather conditions in Florida. To
offset this seasonal trend and to attempt to reduce the decline in sales during
the off-season, the Company runs special promotions for its customers,
incentive contests for its employees and otherwise focuses marketing
initiatives to increasing sales during these periods.

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In addition to seasonality, the Companys quarterly and annual operating
results and comparable unit sales may fluctuate significantly as a result of a
variety of factors, including:



| |  |  | the amount of sales contributed by new and existing restaurants;                                                                   
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | labor costs for the Companys personnel;                                                                                           
|
| |  |  | changes in food and product costs;                                                                                                 
|
| |  |  | the Companys ability to achieve and sustain profitability on a quarterly or annual basis;                                         
|
| |  |  | consumer confidence and changes in consumer preferences;                                                                           
|
| |  |  | health concerns, including adverse publicity concerning food-related illness;                                                      
|
| |  |  | the level of competition from existing or new competitors in
the full-service casual dining segment of the restaurant industry;
and
|
| |  |  | economic conditions generally and in each of the markets in
which the Company is located.                                          

IMPACT OF INFLATION

The primary inflationary factors affecting the Companys operations
include food, beverage and labor costs. Labor costs are affected by changes in
the labor market generally and, because many of the Companys employees are
paid at federal and state established minimum wage levels, changes in such wage
laws affect the Companys labor costs. In addition, most of the Companys
leases require the Company to pay taxes, maintenance, repairs and utilities,
and these costs are subject to inflationary pressures. The Company believes
recent low inflation rates in its principal markets have contributed to
relatively stable food and labor costs. There is no assurance that low
inflation rates will continue or that the Company will have the ability to
control costs in the future.

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets.Under
these new standards, all acquisitions subsequent to June 30, 2001, must be
accounted for by the purchase method of accounting, and goodwill is no longer
amortized over its useful life. Rather, goodwill will be subject to an annual
impairment test based on its fair value. Separable intangible assets that are
determined to have a finite life will continue to be amortized over their
useful lives. The Company implemented SFAS No. 141 effective June 30, 2001.
This statement had no impact on the Company. The Company implemented SFAS No.
142 effective April 28, 2002. The impact of the adoption of this pronouncement
was not material. As of April 27, 2003, the Company had unamortized goodwill
in the amount of $1.5 million and unamortized identifiable intangible assets in
the amount of $0.4 million, all of which are subject to the provisions of SFAS
Nos. 141 and 142. No amortization expense related to goodwill was recorded for
the year ended April 27, 2003. Amortization expense related to goodwill was
$0.1 million for the year ended April 28, 2002.

In August 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. SFAS No. 144 supersedes SFAS No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of. SFAS No. 144 retained substantially all of the
requirements of SFAS No. 121 while resolving certain implementation issues.
SFAS No. 144 is effective for fiscal years beginning after December 15, 2001.
The impact of adopting SFAS No. 144 was not material.

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In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statement
No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. Under Statement No. 4, all gains and losses from extinguishments
of debt were required to be aggregated and, if material, classified as an
extraordinary item, net of related income tax effect. This Statement
eliminates Statement No. 4 and as a result, gains and losses from
extinguishment of debt should be classified as extraordinary items only if they
meet the criteria in Accounting Principles Board Opinion 30, Reporting the
Results of Operations  Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions. Additionally, this Statement amends SFAS No. 13, Accounting
for Leases, such that lease modifications that have economic effects similar
to sale-leaseback transactions be accounted for in a similar manner as a
sale-leaseback. This Statement is generally effective for financial statements
issued on or after May 15, 2002. The impact of adopting SFAS No. 145 was not
material.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. This Statement addresses
financial accounting and reporting for costs associated with exit or disposal
activities and supercedes Emerging Issues Task Force Issue No. 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit
an Activity (including certain costs incurred in a restructuring). A
liability for a cost associated with an exit or disposal activity
shall be recognized and measured initially at its fair value in the period
in which the liability is incurred, except for certain qualifying employee
termination benefits. This Statement will be effective for exit or disposal
activities initiated by the Company after December 31, 2002, which, to date,
have not been applicable.

In December 2002, the FASB issued Statement No. 148, Accounting for
Stock-Based Compensation  Transition and Disclosure, an amendment of FASB
Statement No. 123 (SFAS 148). SFAS 148 amends FASB Statement No. 123,
Accounting for Stock-Based Compensation, to provide alternative methods of
transition for an entity that voluntarily changes to the fair value based
method of accounting for stock-based employee compensation and to require
prominent disclosures about the effects on reported net income of an entitys
accounting policy decisions with respect to stock-based employee compensation.
SFAS 148 also amends APB Opinion No. 28, Interim Financial Reporting, to
require disclosures about those effects in interim financial information. The
Company currently accounts for its stock-based compensation awards to employees
and directors under the accounting prescribed by Accounting Principles Board
Opinion No. 25 and provides the disclosures required by SFAS No. 123. The
Company currently intends to continue to account for its stock-based
compensation awards to employees and directors under the accounting prescribed
by Accounting Principles Board Opinion No. 25 and will adopt the additional
disclosure provisions of SFAS 148.

In December 2002, the FASB issued Interpretation 45 (FIN 45), Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others. For a guarantee subject to FASB
Interpretation 45, a guarantor is required to:



| |  |  | measure and recognize the fair value of the guarantee at inception
(for many guarantees, fair value will be determined using a present
value method); and                                                                                                                                                                                                                                           
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | provide new disclosures regarding the nature of any guarantees, the
maximum potential amount of future guarantee payments, the current
carrying amount of the guarantee liability, and the nature of any
recourse provisions or assets held as collateral that could be
liquidated and allow the guarantor to recover all or a portion of its
payments in the event guarantee payments are required.

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FIN 45 is effective for financial statements for fiscal years ending after
December 15, 2002. The Company is currently in compliance with the provisions
of the new pronouncement.

OUTLOOK

The following discussion of the Companys future operating results and
expansion strategy and other statements in this report that are not historical
statements constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The Companys
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those stated or implied in the
forward-looking statement. Please refer to Page 2 of this Annual Report on
Form 10-K, as well as to the other disclosures contained in this Annual Report on
Form 10-K, for further discussion on forward-looking statements and the risks
and other factors that could prevent the Company from achieving its goals and
cause the assumptions underlying the forward-looking statements and the actual
results to differ materially from those expressed in or implied by those
forward-looking statements.

As of the date of this Annual Report on Form 10-K, the economy has shown
recent signs of strengthening, however concerns still exist as to the strength
of consumer spending due to the economic downturn and world events including
terrorism and the conflict in the Middle East. The Companys revenue
projections assume that current spending trends do not worsen during fiscal
2004. Actual results in fiscal 2004 could vary significantly as a result of
changes in consumer spending and the economy in general.

Fiscal 2004 revenue. As discussed above, the Company opened one new
restaurant in April of fiscal 2003 and an additional new restaurant in June
2003. No additional new restaurant openings are currently planned for fiscal
2004. The remaining 69 Company-owned restaurants will qualify as comparable
restaurants during fiscal 2004. Management currently believes that food and
beverage sales for its comparable stores for fiscal 2004 will range between
flat to a 1% increase compared to fiscal 2003. This anticipated improvement as
compared to the reduction in sales at comparable restaurants of 6% experienced
between fiscal 2002 and fiscal 2003 is projected based upon the improvements
that have recently been implemented that are designed to improve the dining
experience of customers and the consistency in operations, as well as the
anticipated impact of the new menu with enhanced menu items that was
implemented in June 2003.

Management intends to focus efforts on identifying opportunities during
fiscal 2004 to expand its operations in relation to franchised restaurants.
The Company believes that this represents a growth opportunity and would
require significantly lower capital resources from the Company than expansion
of Company-owned restaurants. This initiative is not expected to generate
significant revenue or operating profit during fiscal 2004. Accordingly,
revenue anticipated to be generated from royalty fees and other income is
expected to be less than 1% of total revenues in fiscal 2004.

Food and beverage costs. The Company has been able to reduce its food and
beverage costs as a percentage of revenues over the last two years due to a
change in its primary food distributor and by utilizing more efficient and cost
effective purchasing initiatives. Management believed that through continued
efforts in these areas it would be able to maintain its food and beverage costs
in fiscal 2004 at a level relatively flat with fiscal 2003. However, due to
the recent instance of Mad Cow Disease that was reported in Canada, the supply
of meat products from Canada has been temporarily closed. This has resulted in
a reduction in meat supply and a corresponding increase in food costs for the
Companys restaurants. Management can not predict the duration of the closure
of the Canadian supply markets or

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further impacts that may occur as a result of
this event. However, it is currently anticipated that this event will cause
food and beverage costs to increase in fiscal 2004 as compared to fiscal 2003.

Labor and benefits. The Company has experienced an increase in labor and
benefits costs over the last two years as a percent of revenues. This increase
has resulted from significant increases in the cost of providing medical
benefits to employees, continued increases in the cost of workers compensation
insurance as well as from wage pressure resulting from a tight labor market.
Management currently expects labor and benefit costs, as a percent of revenues
to range from flat to a decrease of 1.0% due to more efficient management of
hourly labor and changes implemented in its medical benefit plan in June 2003.

Occupancy and other. Management has recently implemented cost cutting
initiatives in regards to a number of the component areas included in occupancy
and other expenses. Marketing expenses are currently planned of approximately
2.0% of total revenues in fiscal year 2004. Due to these cost cutting
initiatives and reduced costs expected to be incurred as a result of the
conversion of certain equipment leases from operating leases to capital leases
in fiscal 2003, management presently expects occupancy and other expenses to
decrease between 1.5% and 2.5% as a percent of total revenues in fiscal 2004
compared to fiscal 2003.

Pre-opening expenses. As discussed above, the Company opened one new
restaurant in June 2003. No additional new restaurant openings are currently
planned for fiscal 2004. As a result, pre-opening expenses are not anticipated
to be significant in fiscal 2004.

Depreciation and amortization. The Company is continuing to make capital
investments in its restaurants in regards to replacement equipment and
necessary building improvements. Management currently expects that total depreciation and amortization expense will
continue to decline slightly due to the volume of assets that have become fully
depreciated during fiscal 2003 and fiscal 2004.

General and administrative expenses.General and administrative expenses
have declined over the last two years due to cost control initiatives and the
consolidation of operations. The Company currently plans to make additional
investments in fiscal 2004 in its franchising efforts and in its investment in
its regional supervisors in order to improve the oversight of restaurant
operations and enhance the effectiveness of operational improvements. As a
result, management currently expects that its general and administrative
expenses will remain relatively flat in fiscal 2004 and may increase slightly
compared to fiscal 2003.

Reorganization expenses.The Company does not currently anticipate that
it will incur any significant reorganization expenses in fiscal 2004.

Total other expense. Based on the current debt and capital lease
obligations outstanding, the Company presently anticipates that total other
expense, which is primarily comprised of interest expense, will range between
$3.2 million and $3.4 million in fiscal 2004.

Income tax (benefit) expense. The Company has recently filed in fiscal
2004 for approximately $0.2 million in federal and state income tax refunds
that will be recognized in results of operations in fiscal 2004. Due to the
existence of federal and state income tax loss carryforwards, the Company does
not currently anticipate that any significant additional income tax expense or
benefits will be recorded or realized in fiscal 2004.

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ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Companys exposure to market risk is limited primarily to the
fluctuating interest rates associated with variable rate indebtedness which is
subject to interest rate changes in the United States and Eurodollar markets.
The Company does not currently use, and has not historically used, derivative
financial instruments to hedge against such market interest rate risk. At
April 27, 2003, the Company had approximately $2.5 million in variable rate
indebtedness outstanding, representing approximately 5% of the Companys total
outstanding indebtedness. Changes in market interest rates, either increasing
or decreasing rates by up to ten percent, would have no material impact on the
Companys results of operations.

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

This market risk discussion contains forward-looking statements. Actual
results may differ materially from the discussion based upon general market
conditions and changes in domestic and global financial markets.




ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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




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

Not applicable.

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PART III




ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

EXECUTIVE OFFICERS

The names of the executive officers of the Company and certain information
with respect to each of them is set forth below.

|                 |  |     |    |          |  |                                                                
|---------------- |  | --- | -- | -------- |  | ---------------------------------------------------------------
|Name             |  | Age |    | Position
|                 |  |     |    |         
|Ayman Sabi       |  |     | 40 |          |  | President and Chief Executive Officer                          
|Michael C. Brant |  |     | 40 |          |  | Executive Vice President of Finance and Chief Financial Officer
|Alain K.K. Lee   |  |     | 46 |          |  | Executive Vice President and Corporate Secretary               
|Mark Rogers      |  |     | 40 |          |  | Vice President of Operations                                   

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

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

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

Mark Rogers re-joined the Company as Vice President of Operations on
January 27, 2003. He was the Senior Director of Operations from October 2000
to June 2002. Prior to joining Roadhouse he was the Regional Director with
Unos from September 1997 to October 2000 where he was responsible for seven
company stores and seven franchise locations with six of these locations in
Puerto Rico. Mr. Rogers was at Applebees from May 1991 to September 1997 as a
District Manager responsible for six restaurants and was instrumental in
beginning a new concept with the owners called Chevy Chase Grill. He was
with the Catawba Island Club from February 1988 to May 1991 as the Executive
Food and Beverage Manager where he was responsible for all aspects of the food
and beverage department for this private fine dining and casual theme resort
restaurant. Mr. Rogers was with T.G.I. Fridays from June 1981 to February
1988.

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DIRECTORS

The names of directors of the Company and certain information with respect
to each of them are set forth below.

|               |  |     |    |                |  |                |  |  |      | 
|-------------- |  | --- | -- | -------------- |  | -------------- |  |  | ---- | 
|Name           |  | Age |    | Director Since |  | Term Expires  
|               |  |     |    |                |  |               
|Ayman Sabi     |  |     | 40 |                |  | February 1997  |  |  | 2003 | 
|Alain K.K. Lee |  |     | 46 |                |  | January 1998   |  |  | 2003 | 
|Ronald J. Buck |  |     | 40 |                |  | September 2002 |  |  | 2003 | 
|Nathan D. Benn |  |     | 41 |                |  | September 2002 |  |  | 2003 | 

Ronald J. Buck is co-founder and Managing Principal of Corsair Partners,
LLC, the General Partner of Corsair One, L.P., and the investment manager of
Corsair Special Situations Fund, L.P., both of which are investment firms
specializing in investing in distressed and illiquid securities. From 1995 to
1998, Mr. Buck was a bond analyst in Standard and Poors retail and restaurant
group. Mr. Buck served in various positions in Chase Manhattan Bank from 1989
to 1995, and in the last three years as a Vice President in the Recovery and
Restructuring Department. Mr. Buck is a member of the Audit Committee and the
Compensation Committee of the Companys Board of Directors.

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

Giuseppe Luongo, who was elected to the Board of Directors in September
2002, resigned from the Board in April 2003. Mr. Luongos resignation was due
to other personal and business obligations and was not the result of any
disagreement with the Company over any matter relating to the Companys
operations, policies and procedures, including any matter of accounting
principles or procedures or financial statement disclosure.

Section 16(a) Beneficial Ownership Reporting Compliance

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

Based solely on a review of the copies of such reports furnished to the
Company, or written representation that no such reports were required, the
Company believes that for the fiscal year ended April 27, 2003, all of the
Companys officers, directors and greater than 10% beneficial owners, complied
with all Section 16(a) filing requirements applicable to them. However, all
required filings were late.

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ITEM 11.  EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the compensation paid to the Companys
Executive Officers whose compensation exceeded $100,000 in fiscal 2003. The
individuals included in the table are collectively
referred to as the Named Executive Officers.

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ANNUAL COMPENSATION

|                   |                             |                     |      |        |      |       |         |                  |         |                  |   |              |         |           |        |        |        |   |        |        |        | 
|------------------ | --------------------------- | ------------------- | ---- | ------ | ---- | ----- | ------- | ---------------- | ------- | ---------------- | - | ------------ | ------- | --------- | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|NAME AND           |                             | FISCAL              |      |        |      |       |         |                  |         |                  |   | OTHER ANNUAL |         | ALL OTHER
|PRINCIPAL POSITION |                             | YEAR                |      | SALARY |      | BONUS |         | COMPENSATION (1) |         | COMPENSATION (2)
|                   |                             |                     |      |        |      |       |         |                  |         |                 
|Ayman Sabi,        |                             |                     | 2003 |        |      | $     | 409,633 |                  |         | $                |  |              |         | $         | 67,642 |        |        | $ | 40,916 |       
|                   |                             | President and Chief |      |        | 2002 |       |         |                  | 405,788 |                  |   |              |        |           |        |        | 62,178 |   |        |        | 40,579 | 
|                   |                             | Executive Officer   |      |        | 2001 |       |         |                  | 426,461 |                  |   |              | 170,000 |           |        |        | 67,858 |   |        |        | 41,727 | 
|Michael C. Brant,  |                             |                     | 2003 |        |      |       | 105,712 |                  |         |                  |  |              |         |           |       |        |        |   | 7,958  |       
|                   | Executive Vice              |                     |      | 2002   |      |       |         |                 |         |                  |   |             |         |           |        |       |        |   |        |       |       
|                   | President of Finance and    |                     |      | 2001   |      |       |         |                 |         |                  |   |             |         |           |        |       |        |   |        |       |       
|                   | Chief Financial Officer (3) |                     |      |        |      |       |         |                  |         |                  |   |              |         |           |        |        |        |   |        |        |       
|Alain K.K. Lee,    |                             |                     | 2003 |        |      |       | 129,492 |                  |         |                  |  |              |         |           | 34,768 |        |        |   | 12,949 |       
|                   | Executive Vice President    |                     |      | 2002   |      |       |         | 129,492          |         |                  |   |             |         |           |        | 40,369 |        |   |        | 12,949 |       
|                   | and Corporate Secretary     |                     |      | 2001   |      |       |         | 127,094          |         |                  |   | 37,000       |         |           |        | 32,040 |        |   |        | 12,452 |       



|(1) |  | This amount represents rent and car lease payments made by the
Company for Mr. Sabi and Mr. Lee.
|--- |  | ------------------------------------------------------------------------------------------------
|   
|(2) |  | Represents Supplemental Executive Retirement Plan (SERP)
contributions made by the Company.   
|   
|(3) |  | Mr. Brant began his employment with the Company on October 8, 2002.                             

Option Grants Table

No stock options were granted to the Named Executive Officers in fiscal
year 2003. Further, pursuant to the Companys Confirmed Plan of
Reorganization, all outstanding options were cancelled as of September 20,
2002.

Aggregated Option Exercises and Fiscal Year-End Option Value Table

The Named Executive Officers did not hold any stock options as of April
27, 2003.

Compensation of Directors

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

Stock Option Plan

THE PLAN

The Companys Board of Directors believes that future growth and success
will depend, in large part, upon the Companys ability to attract, motivate and
retain competitively superior employees, and that stock option grants have been
and will continue to be an important element in achieving this goal by
furthering an alignment of the participants interests with those of the
Companys shareholders, thereby promoting long-term growth and profitability.
Accordingly, the Board of Directors has adopted the 2003 Stock Option Plan (the
Plan), which has been ratified by the shareholders, pursuant to which the
officers, directors, key employees and independent contractors or consultants
of the Company that perform services to the Company are entitled to receive
options to purchase up to 1,500,000 shares of common stock. The purpose of the
Plan is to provide an additional incentive to attract, motivate and retain
persons with outstanding

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abilities and skills who provide important services to the Company and upon
whose efforts and judgment our success depends, by affording such persons the
opportunity to acquire or increase their proprietary interest in the Company
and to benefit from rising values of the common stock.

SUMMARY OF THE 2003 STOCK OPTION PLAN

In furtherance of its purposes, the Plan authorizes, among other things,
the granting of incentive or nonqualified stock options to purchase shares of
common stock to persons selected by the Companys Board of Directors from a
class of the Companys officers, directors, key employees and independent
contractors or consultants that perform services for the Company.

The Plan is administered by the Companys Board of Directors. The Board of
Directors has appointed the Compensation Committee to administer the Plan.

The Plans administrators in their sole discretion will determine the
persons to be awarded options, the number of shares subject to the options and
the exercise price and other terms of the options. In addition, the Plans
administrators have full power and authority to interpret the Plan, to
establish, amend, and rescind any rules and regulations relating to the Plan,
to prescribe the form of any agreement or instrument executed in connection
with the Plan, and to make all other determinations necessary or advisable for
the administration of the Plan. The acts of the Plans administrators are
final, conclusive and binding upon all interested parties, including the
Company, its shareholders, its officers and employees, recipients of grants
under the Plan, and all persons or entities claiming by or through such
persons.

The Company does not currently have any definitive plans to issue any
stock options under the Plan to any of its key employees, directors, officers
or independent contractors or consultants that perform services.

An aggregate of 1,500,000 shares of common stock are reserved for issuance
upon exercise of options granted under the Plan. The shares acquired upon
exercise of options granted under the Plan are authorized and issued shares of
common stock. The Companys shareholders have no preemptive rights to purchase
or subscribe for any common stock by reason of the reservation and issuance of
common stock under the Plan. If any option granted under the Plan expires or
terminates for any reason other than having been exercised in full, the
unpurchased shares subject to that option will again be available for issuance
under the Plan.

Pursuant to the Companys Confirmed Plan of Reorganization, the Companys
1994 Stock Option Plan and 1998 Stock Option Plan were terminated and all
options were cancelled thereunder.

CERTAIN TERMS AND CONDITIONS

All grants of options under the 2003 Stock Option Plan will be evidenced
by a written agreement between the Company and the optionee. Such agreement
will contain such terms and conditions as the Plans administrators prescribe,
consistent with the Plan, including, without limitation, the number of shares,
the exercise price, term and any restrictions on exercising the options
granted.

Under the Plan, the option price per share of common stock may be any
price determined by the Plans administrators at the time of grant; except that
the option price of an incentive stock option granted under the Plan may not be
less than the fair market value per share of common stock on the date of grant
(or less than 110% of the fair market value for shareholders who own more than
10% of the Companys stock).

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Under the Plan, fair market value shall be
determined by the Plan administrators and if the shares of our common stock are
listed on a national stock exchange or traded on the over the counter market,
the fair market value shall equal the average of the closing price of the Companys
common stock on the seven market days prior to the option grant date as
reported by such exchange or market; provided, however, that the exercise price
of options granted under the 2003 Stock Option Plan shall not be less than
$0.36 per share.

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

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

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

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

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

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

Equity Compensation Plan Information

The following table provides information, as of April 27, 2003, with
respect to all of the Companys compensation plans under which equity
securities are authorized for issuance:

|                                                             |       |                     |                      |                     |                      |                   |                         |     |                       |  |                         |     | 
|------------------------------------------------------------ | ----- | ------------------- | -------------------- | ------------------- | -------------------- | ----------------- | ----------------------- | --- | --------------------- |  | ----------------------- | --- | 
|                                                             |       |                     |                      |                     |                      |                   |                         |     |                       |  | Number of securities   
|                                                             |       |                     |                      |                     |                      |                   |                         |     |                       |  | remaining available for
|                                                             |       |                     | Number of securities |                     |                      |                   |                         |     | future issuance under
|                                                             |       |                     | to be issued upon    |                     | Weighted-average     |                   | equity compensation    
|                                                             |       |                     | exercise of          |                     | exercise price of    |                   | plans (excluding       
|                                                             |       |                     | outstanding options, |                     | outstanding options, |                   | securities reflected in
|Plan category                                                |       | warrants and rights |                      | warrants and rights |                      | the first column)
|                                                             |       |                     |                      |                     |                      |                  
|Equity compensation
plans approved by
security
holders(1)(2) |       |                     | -0-                  |                     |                      |                   | N/A                     |     |                       |  | -0-                     |    
|Equity compensation
plans not approved
by security holders   |       |                     | -0-                  |                     |                      |                   | N/A                     |     |                       |  | -0-                     |    
|                                                             |       |                     |                      |                     |                      |                   |                         |     |                       |  |                         |    
|                                                             | Total |                     |                      | -0-                 |                      |                   |                         | N/A |                       |  |                         | -0- | 
|                                                             |       |                     |                      |                     |                      |                   |                         |     |                       |  |                         |    

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

(2)  Effective May 15, 2003, the Companys shareholders approved the 2003 Stock
Option Plan. The 2003 Plan reserves an aggregate of 1,500,000 shares for the
issuance of options thereunder. No options are currently outstanding under the
2003 Stock Option Plan.

58



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##### Table of Contents



Security Ownership of Directors and Named Executive Officers

The following table indicates the share ownership, as of April 27, 2003,
of directors and executive officers, and of all directors and executive
officers as a group:

|                                                                   |  |                        |           |                  |  |  |     |  
|------------------------------------------------------------------ |  | ---------------------- | --------- | ---------------- |  |  | --- | -
|                                                                   |  | TOTAL SHARES           |           |                  |  | 
|NAME OF BENEFICIAL OWNER (1)                                       |  | BENEFICIALLY OWNED (2) |           | PERCENT OF CLASS
|                                                                   |  |                        |           |                 
|Ayman Sabi (3)                                                     |  |                        | 2,781,228 |                  |  |  | 9.5 | %
|Alain K. K. Lee                                                    |  |                        |          |                  |  |  |    |  
|Ronald J. Buck                                                     |  |                        |          |                  |  |  |    |  
|Nathan D. Benn                                                     |  |                        |          |                  |  |  |    |  
|Michael C. Brant (4)                                               |  |                        |          |                  |  |  |    |  
|                                                                   |  |                        |           |                  |  |  |     |  
|All executive
officers and
directors as a
group (five
persons) (3) |  |                        | 2,781,228 |                  |  |  | 9.5 | %
|                                                                   |  |                        |           |                  |  |  |     |  



|(1) |  | Unless stated otherwise, the address of the beneficial owners is 2703-A
Gateway Drive, Pompano Beach, Florida 33069.                                                                                                                                                                                                                                                                                                                                     
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Information concerning beneficial ownership was furnished by the
persons named in the table or derived from documents filed with the U.S.
Securities and Exchange Commission. Unless stated otherwise, each
person named in the table has sole voting and investment power with
respect to the shares beneficially owned.                                                                                                                                
|   
|(3) |  | Includes (i) 3,450 shares of common stock beneficially owned directly
by Mr. Sabi and (ii) 2,777,778 shares owned by Tonto Capital Partners,
GP. Mr. Sabi, as a general partner of Tonto, is deemed a beneficial
owner of the Company shares owned by Tonto for U. S. securities law
purposes. However, Mr. Sabi disclaims any pecuniary interest in the
shares of the Company owned by Tonto except to the extent of his
proportional interest in Tonto.
|   
|(4) |  | Mr. Brant joined the Company on October 8, 2002 as Vice President of
Finance and Chief Financial Officer.                                                                                                                                                                                                                                                                                                                                                

Security Ownership of Principal Shareholders

The following table indicates the share ownership, as of April 27, 2003,
of any individual known to the Company to be a beneficial owner of more than
five percent of the Companys common stock.

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

59



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##### Table of Contents



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

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

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

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




ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Berjaya, which beneficially owns approximately 66.5% of the Companys
common stock, directly or indirectly owns Roadhouse Grill Asia Pacific (H.K.)
Limited (Roadhouse Grill Hong Kong) and Roadhouse Grill Asia Pacific
(Cayman) Limited (Roadhouse Grill Asia). In January 1996, the Company
entered into a Master Development Agreement with Roadhouse Grill Hong Kong
which provides for the development and franchising of Roadhouse Grill
restaurants in Hong Kong. Under the agreement, Roadhouse Grill Hong Kong is
not required to develop any specific number of restaurants in Hong Kong, but
any restaurants that it develops are credited against the development
obligations of Roadhouse Grill Asia under Roadhouse Grill Asias Master
Development Agreement with the Company. Roadhouse Grill Hong Kong or its
affiliates are not required to pay any franchise or reservation fee for
restaurants that it develops, but they are responsible for paying or
reimbursing approved expenses incurred by the Company in connection with the
opening of each restaurant. In addition, Roadhouse Grill Hong Kong is
required to pay a royalty in connection with the operation of each of its
restaurants based on gross sales. Under certain circumstances, Roadhouse
Grill Hong Kong or the Company may grant franchises to third parties in Hong
Kong. In that event, the Company is entitled to receive 50% of any franchise
and reservation fees (up to $10,000 per restaurant) and 40% of any royalty
fee (based on gross sales payable by the third party franchisee). The Company
did not recognize royalty income from Roadhouse Grill Hong Kong for fiscal
year 2002.

In January 1996, the Company also entered into a Master Development
Agreement with Roadhouse Grill Asia, which covers countries in Asia and the
Pacific Rim (other than Hong Kong), including but not limited to, Australia,
China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore, South
Korea, the Philippines and Thailand. Under the agreement, Roadhouse Grill
Asia is required to open and maintain at least thirty Roadhouse Grill
restaurants during the first ten years of the term of the agreement, with a
minimum of two restaurants to be developed each year. Under certain
circumstances, Roadhouse Grill Asia or the Company may grant franchises to
third parties in the territory. The fee arrangements under the agreement are
substantially the same as those under the agreement between the Company and
Roadhouse Grill Hong Kong.

60



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As of April 27, 2003, there were three Roadhouse Grill restaurants
operating in Malaysia under the Master Development Agreement with Roadhouse
Grill Asia. The Company recorded less than $0.1 million in royalty income
from those restaurants during each of fiscal years 2003, 2002 and 2001.
Royalty income is currently being offset against interest that the Company
owes to Berjaya. This offset of royalty income will continue until the
royalty receivable exceeds the amount due Berjaya, which approximates
$129,000 as of April 27, 2003. Once the royalty receivable exceeds the
payable to Berjaya, the Company expects to begin collecting the earned
royalty fees. Roadhouse Grill Asia has not met the development schedule
under the Asia Master Development Agreement. As of the date of this filing,
the Company has taken no action to enforce compliance with the development of
new stores required under the Asia Master Development Agreement and is
currently in discussion with Roadhouse Grill Asia regarding the agreement.

On February 14, 2001, Berjaya loaned the Company $1.5 million. The loan
was evidenced by a promissory note with interest at 10% per annum, was
payable by the Company on demand at any time after August 14, 2001, and was
collateralized by intellectual property and certain unencumbered real and
personal property. Pursuant to the Companys Confirmed Plan of
Reorganization, in September 2002, Berjaya received in full satisfaction of
the $1.5 million loan, 4,166,667 shares of common stock at the issue price of
$0.36 per share, representing 14.26% of the outstanding common stock in the
reorganized Company.

On September 30, 2002, pursuant to the Companys Confirmed Plan of
Reorganization, Berjaya, and its affiliate, Prime Gaming Philippines, Inc,
invested and paid $3.5 million and received 9,722,222 shares of common stock
at the issue price of $0.36 per share representing 33.3% of the outstanding
common stock in the reorganized Company.

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

Ronald J. Buck, a director of the Company, is co-founder and Managing
Principal of Corsair Partners, LLC and the investment manager of Corsair
Special Situations Fund, L.P., both of which are investment firms
specializing in investing in distressed and illiquid securities. Corsair
Special Situations Fund, L.P. is the holder of a note from the Company in the
amount of $5.0 million payable in monthly installments of $103,959, with
interest at the rate of 5% per annum, through October 2007.

Nathan D. Benn, is currently the Director and Chief Financial Officer of
the Florida Division of Buckhead Beef, which has a contract with the Company
to supply beef to the Companys food purveyor for resale to the Companys
restaurants.




ITEM 14.   CONTROLS AND PROCEDURES

(a)    Evaluation of Disclosure Controls and Procedures

Within the 90 days prior to the date of this Annual Report, the Company
carried out an evaluation,

61



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##### Table of Contents



under the supervision and with the participation
of its management, including the Companys Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of the
Companys disclosure controls and procedures pursuant to Securities Exchange
Act Rule 13-a-14(c) and 15d-14(c). Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the Companys
disclosure controls and procedures were effective as of the date of their
evaluation in timely alerting them to material information relating to the
Company (including its
consolidated subsidiaries) required to be included in this Annual
Report.

(b)    Changes in Internal Controls

There were no significant changes in the Companys internal controls or
in other factors that could significantly affect such internal controls
subsequent to the date of the evaluation described in paragraph (a) above.
As a result, no corrective actions were required or undertaken.

62



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PART IV




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

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



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



| |  | Exhibit Description
| |  | -------------------

| |  |  |      |  |  |                                                                                                                                                                                                                                                                                                                  
| |  |  | ---- |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | 2.1  |  |  | Debtors Second Amended and Restated Disclosure
Statement in Support of Chapter 11 Plan of Reorganization, as
Modified, dated June 12, 2002 (incorporated by reference to
Exhibit 2.1 to the Companys Annual Report on Form 10-K for the
fiscal year ended April 28, 2002).                                     
| |  |  |      |  |  |                                                                                                                                                                                                                                                                                                                  
| |  |  | 2.2  |  |  | Debtors Second Amended and Restated Chapter 11 Plan of
Reorganization as Modified, dated June 12, 2002 (incorporated by
reference to Exhibit 2.1 to the Companys Annual Report on Form 10-K
for the fiscal year ended April 28, 2002).                                                                         
| |  |  |      |  |  |                                                                                                                                                                                                                                                                                                                  
| |  |  | 2.3  |  |  | Order Confirming Debtors Second Amended and Restated Chapter
11 Plan of Reorganization, as Modified (incorporated by reference
to Exhibit 2.1 to the Companys Annual Report on Form 10-K for the
fiscal year ended April 28, 2002).                                                                            
| |  |  |      |  |  |                                                                                                                                                                                                                                                                                                                  
| |  |  | 3.1  |  |  | Amended and Restated Articles of Incorporation of the
Company. *                                                                                                                                                                                                                                                 
| |  |  |      |  |  |                                                                                                                                                                                                                                                                                                                  
| |  |  | 3.2  |  |  | Bylaws of the Company (incorporated by reference to Exhibit
3.2 to the Registration Statement on Form S-1 dated September 26,
1996).                                                                                                                                                                             
| |  |  |      |  |  |                                                                                                                                                                                                                                                                                                                  
| |  |  | 10.1 |  |  | Form of the Companys Development Agreement of Roadhouse
Grill, Inc. (incorporated by reference to Exhibit 10.2 to the
Registration Statement on Form S-1 dated September 26, 1996).                                                                                                                             
| |  |  |      |  |  |                                                                                                                                                                                                                                                                                                                  
| |  |  | 10.2 |  |  | Assignment and Assumption Agreement, dated March 15, 1995,
between Roadhouse Waterway, Inc. and Roadhouse Grill Commercial,
Inc., for property located in Fort Lauderdale, Florida (lease of
restaurant premises) (incorporated by reference to the Registration
Statement on Form S-1 dated September 26, 1996).

63



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| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                          
| |  |  | ----- |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | 10.3  |  |  | Lease Agreement, dated April 26, 1994, between Piccadilly
Cafeterias, Inc. and the Company, for property located in Winter
Park, Florida (lease of restaurant premises) (incorporated by
reference to Exhibit 10.8 to the Registration Statement on Form S-1
dated September 26, 1996).                                  
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                          
| |  |  | 10.4  |  |  | Lease, dated April 17, 1995, between Captec Net Lease Realty,
Inc. and New York Roasters, for property located in Cheektowaga, New
York (lease of restaurant premises, assumed by the Company)
(incorporated by reference to Exhibit 10.10 to the Registration
Statement on Form S-1 dated September 26, 1996).          
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                          
| |  |  | 10.5  |  |  | 1994 Registration Rights Agreement, dated February 10, 1994
(incorporated by reference to Exhibit 10.19 to the Registration
Statement on Form S-1 dated September 26, 1996).                                                                                                                                             
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                          
| |  |  | 10.6  |  |  | Amendment to 1994 Registration Rights Agreement, dated June
8, 1994 (incorporated by
reference to Exhibit 10.20 to the Registration Statement on
Form S-1 dated September
26, 1996).                                                                                                                                     
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                          
| |  |  | 10.7  |  |  | Amendment to 1994 Registration Rights Agreement, dated July
26, 1996 (incorporated
by reference to Exhibit 10.21 to the Registration Statement on
Form S-1 dated September
26, 1996).                                                                                                                                    
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                          
| |  |  | 10.8  |  |  | Purchase and Sale Agreement, dated August 30, 1996, between
Roadwear, Inc. and the
Company, relating to the Kendall restaurant (incorporated by
reference to Exhibit 10.28
to the Registration Statement on Form S-1 dated September 26,
1996).                                                                          
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                          
| |  |  | 10.9  |  |  | Master Development Agreement, dated January 5, 1996, between the
Company and
Roadhouse Grill Asia (incorporated by reference to Exhibit 10.31 to
the Registration
Statement on Form S-1 dated September 26, 1996).                                                                                                       
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                          
| |  |  | 10.10 |  |  | Investment Agreement, dated October 25, 1995 between Berjaya
and the Company
(incorporated by reference to Exhibit 10.39 to the Registration
Statement on Form S-1
dated September 26, 1996).                                                                                                                            
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                          
| |  |  | 10.11 |  |  | Master Lease Agreement between the Company and Pacific
Financial Company, dated June 2, 1997 (incorporated by reference to
Exhibit 10.42 to the Companys Quarterly Report on Form 10-Q for the
fiscal quarter ended June 29, 1997).                                                                                     
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                          
| |  |  | 10.12 |  |  | Agreement for Purchase and Sale of Membership Interest in
Boca Roadhouse, L.C., a limited liability company, dated December
15, 1997 (incorporated by reference to Exhibit 10.47 to the
Companys Annual Report on Form 10-K for the fiscal year ended
December 28, 1997).                                               
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                          
| |  |  | 10.13 |  |  | Roadhouse Grill, Inc. Deferred Compensation Plan. Effective
June 3, 1997 (incorporated by reference to Exhibit 10.48 to the
Companys Annual Report on Form 10-K for the fiscal year ended
December 28, 1997).                                                                                                           
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                          
| |  |  | 10.14 |  |  | Amendment dated December 1, 1997 to that Master Development
Agreement executed January 5, 1996 by and between Roadhouse Grill,
Inc. and Roadhouse Grill Asia Pacific (H.K.) Limited (incorporated
by reference to Exhibit 10.49 to the Companys Annual Report on Form
10-K for the fiscal year ended December 28, 1997).

64



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##### Table of Contents



| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                            
| |  |  | ----- |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | 10.15 |  |  | Amendment dated December 1, 1997 to that Master Development
Agreement executed January 5, 1996 by and between Roadhouse Grill,
Inc. and Roadhouse Grill Asia Pacific
(Cayman) Limited (incorporated by reference to Exhibit 10.50 to
the Companys Annual Report on Form 10-K for the fiscal year ended
December 28, 1997).
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                            
| |  |  | 10.16 |  |  | Lease Agreement by and between the Company and FFCA
Acquisition Corporation, dated August 19, 1998 (incorporated by
reference to Exhibit 10.54 to the Companys Quarterly Report on Form
10-Q for the fiscal quarter ended January 24, 1999).                                                                              
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                            
| |  |  | 10.17 |  |  | Lease Agreement and Construction Addendum by and between the
Company and CNL APF Partners, L.P., dated September 15, 1998
(incorporated by reference to Exhibit 10.55 to the Companys
Quarterly Report on Form 10-Q for the fiscal quarter ended January
24, 1999).                                                       
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                            
| |  |  | 10.18 |  |  | Master Security Agreement and Schedule No. 1 by and between
the Company and Pacific Financial Company, dated January 14, 1999
(incorporated by reference to Exhibit 10.56 to the Companys
Quarterly Report on Form 10-Q for the fiscal quarter ended January
24, 1999).                                                   
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                            
| |  |  | 10.19 |  |  | Promissory Note with First Union National Bank (incorporated
by reference to Exhibit 10.58 to the Companys Quarterly Report on
Form 10-Q for the fiscal quarter ended October 24, 1999).                                                                                                                                  
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                            
| |  |  | 10.20 |  |  | Convertible Secured Promissory note, dated February 14,
2001, made by the Company in favor of Berjaya (incorporated by
reference to Exhibit 10.1 to the Companys Quarterly Report for the
fiscal quarter ended January 28, 2001).                                                                                         
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                            
| |  |  | 10.21 |  |  | Roadhouse Grill, Inc. 2003 Stock Option Plan. *                                                                                                                                                                                                                                                                            
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                            
| |  |  | 10.22 |  |  | Promissory Notes and Forbearence Agreement with
Colorado Boxed Beef (incorporated by reference to Exhibit 10.2 to
the Companys Quarterly Report on Form 10-Q for the fiscal quarter
ended January 28, 2001).                                                                                                              
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                            
| |  |  | 10.23 |  |  | Promissory Note, dated September 20, 2002, made by the
Company in favor of CNL Funding 2000-A, LP. (incorporated by
reference to Exhibit 10.1 of the Companys Quarterly Report on Form
10-Q for the fiscal quarter ended January 26, 2003).                                                                               
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                            
| |  |  | 10.24 |  |  | Promissory Note, dated September 20, 2002, made by the
Company in favor of CNL Income Fund III, LTD. (incorporated by
reference to Exhibit 10.2 of the Companys Quarterly Report on Form
10-Q for the fiscal quarter ended January 26, 2003).                                                                             
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                            
| |  |  | 10.25 |  |  | Promissory Note, dated September 20, 2002, made by the
Company in favor of CNL APF Partners, LP. (incorporated by reference
to Exhibit 10.3 of the Companys Quarterly Report on Form 10-Q for
the fiscal quarter ended January 26, 2003).                                                                                 
| |  |  |       |  |  |                                                                                                                                                                                                                                                                                                                            
| |  |  | 10.26 |  |  | Promissory Note, dated September 20, 2002, made by the
Company in favor of CORSAIR Special Situations Fund LP.
(incorporated by reference to Exhibit 10.4 of the Companys
Quarterly Report on Form 10-Q for the fiscal quarter ended January
26, 2003).                                                                   

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| |  |  |      |  |  |                                                                                                                                                                                                                                    
| |  |  | ---- |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | 16.1 |  |  | Letter of KPMG LLP to the Securities and Exchange Commission,
dated September 24, 2001 (incorporated by reference to Exhibit 16
to the Companys Form 8-K filed with the Securities and Exchange
Commission on September 24, 2001).
| |  |  |      |  |  |                                                                                                                                                                                                                                    
| |  |  | 21.1 |  |  | Subsidiaries of the Registrant (incorporated by reference to
Exhibit 21 to the Companys Annual Report on Form 10-K for the
fiscal year ended April 30, 2000).                                                                     
| |  |  |      |  |  |                                                                                                                                                                                                                                    
| |  |  | 99.1 |  |  | Certification by Chief Executive Officer and Chief Financial
Officer under Section 302 of Sarbanes-Oxley.*                                                                                                                         
| |  |  |      |  |  |                                                                                                                                                                                                                                    
| |  |  | 99.2 |  |  | Certification by Chief Executive Officer and Chief Financial
Officer under Section 906 of Sarbanes-Oxley (furnished but not filed).*                                                                                               



---

|* |  | Filed herewith.
|- |  | ---------------

(b)    REPORTS ON FORM 8-K:



| |  | None
| |  | ----

66



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on this 23rd day
of July, 2003.

| |                       |                                           
| | --------------------- | ------------------------------------------
| | ROADHOUSE GRILL, INC.
|
| |                       | By: /s/ Michael C. Brant

Michael C. Brant
| |                       | Executive Vice President of Finance       
| |                       | and Chief Financial Officer               

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

|                                       |  |                                                                                               |  |              
|-------------------------------------- |  | --------------------------------------------------------------------------------------------- |  | -------------
|Name                                   |  | Capacity                                                                                      |  | Date         
|                                       |  |                                                                                               |  |              
|                                       |  |                                                                                               |  |              
|/s/ Ayman A. Sabi

Ayman A. Sabi       |  | President, Chief Executive Officer
(Principal Executive Officer), and
Director                |  | July 23, 2003
|                                       |  |                                                                                               |  |              
|/s/ Michael C. Brant

Michael C. Brant |  | Executive Vice President of
Finance and Chief Financial
Officer (Principal Financial
Officer) |  | July 23, 2003
|                                       |  |                                                                                               |  |              
|/s/ Alain K. K. Lee

Alain K. K. Lee   |  | Executive Vice President,
Corporate Secretary, and Director                                   |  | July 23, 2003
|                                       |  |                                                                                               |  |              
|/s/ Nathan D. Benn

Nathan Benn        |  | Director                                                                                      |  | July 23, 2003
|                                       |  |                                                                                               |  |              
|/s/ Ronald J. Buck

Ronald Buck        |  | Director                                                                                      |  | July 23, 2003

67



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INDEX TO FINANCIAL STATEMENTS

|                                                                                                                                            |  |      |     | 
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                                                                                            |  | Page
|                                                                                                                                            |  |     
|Independent Auditors Report  Grant Thornton,
LLP                                                                                          |  |      | F-1 | 
|Independent Auditors Report  KMPG, LLP                                                                                                    |  |      | F-2 | 
|Consolidated Balance Sheets as of April 27, 2003 and April 28, 2002                                                                         |  |      | F-3 | 
|Consolidated Statements of Operations for the Fifty-Two
Weeks Ended April 27, 2003,
April 28, 2002, and April 29, 2001                      |  |      | F-4 | 
|Consolidated Statements of Changes in Shareholders
Equity for the Fifty-Two Weeks
Ended April 27, 2003, April 28, 2002, and April 29, 2001 |  |      | F-6 | 
|Consolidated Statements of Cash Flows for the Fifty-Two
Weeks Ended April 27, 2003,
April 28, 2002, and April 29, 2001                      |  |      | F-7 | 
|Notes to Consolidated Financial Statements                                                                                                  |  |      | F-8 | 

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REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Roadhouse Grill, Inc.

We have audited the accompanying consolidated balance sheets of Roadhouse
Grill, Inc. and Subsidiaries as of April 27, 2003 and April 28, 2002, and the
related consolidated statements of operations, changes in stockholders equity,
and cash flows for the fifty-two weeks ended April 27, 2003 and April 28, 2002.
These financial statements are the responsibility of the Companys management.
Our responsibility is to express an opinion on these financial statements
based on our audit.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Roadhouse Grill,
Inc. and Subsidiaries as of April 27, 2003 and April 28, 2002 and the
consolidated results of their operations and their consolidated cash flows for
the fifty-two weeks ended April 27, 2003 and April 28, 2002, in conformity with
accounting principles generally accepted in the United States of America.

/s/ Grant Thornton, LLP
Miami, Florida
June 18, 2003

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Independent Auditors Report

The Board of Directors
Roadhouse Grill, Inc.:

We have audited the accompanying consolidated statements of operations, cash
flows and changes in shareholders equity of Roadhouse Grill, Inc. and subsidiaries for
the fifty-two weeks ended April 29, 2001. 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 audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated results of operations of
Roadhouse Grill, Inc. and subsidiaries, changes in shareholders equity and
their cash flows for the fifty-two weeks ended April 29, 2001 in conformity
with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in note 2 to the
consolidated financial statements, the Company has experienced significant cash
flow problems and a net loss of $15.9 million for the year ended April 29,
2001. The Company is also in default of certain of its loan facilities
covenants and payment provisions which may result in an acceleration of the
amounts owed under the Companys loan facilities. These factors raise
substantial doubt about the Companys ability to continue as a going concern.
The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

/s/ KPMG LLP
August 1, 2001
Ft. Lauderdale, Florida

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ROADHOUSE GRILL, INC.
CONSOLIDATED BALANCE SHEETS
April 27, 2003 and April 28, 2002
($ in thousands, except per share data)

|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         |                                             |        |                |         |                |        |   |        | 
|------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------- | ------------------------------------------- | ------ | -------------- | ------- | -------------- | ------ | - | ------ | 
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         |                                             |        | April 27, 2003 |         | April 28, 2002
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         |                                             |        |                |         |               
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         | Assets                                      |        |                |         |                |        |   |        | 
|Current assets:                                                                                                                 |                                                                                                                                 |                                                                                                                                                                          |         |                                             |        |                |         |               
|                                                                                                                                | Cash and cash equivalents                                                                                                       |                                                                                                                                                                          | $       | 2,956                                       |        |                | $       | 3,193          |       
|                                                                                                                                | Accounts receivable, net of allowance for doubtful accounts
of $195 and $294 at April 27, 2003 and April 28, 2002, respectively |                                                                                                                                                                          |         | 337                                         |        |                |         | 475            |       
|                                                                                                                                | Income tax receivable                                                                                                           |                                                                                                                                                                          |         | 741                                         |        |                |         | 17             |       
|                                                                                                                                | Inventory                                                                                                                       |                                                                                                                                                                          |         | 1,163                                       |        |                |         | 1,305          |       
|                                                                                                                                | Prepaid expenses                                                                                                                |                                                                                                                                                                          |         | 2,196                                       |        |                |         | 2,628          |       
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         |                                             |        |                |         |               
|                                                                                                                                |                                                                                                                                 | Total current assets                                                                                                                                                     |         |                                             | 7,393  |                |         |                | 7,618  |  
|Property & equipment, net of accumulated depreciation of $49,741
and $42,766 at April 27, 2003 and April 28, 2002, respectively |                                                                                                                                 |                                                                                                                                                                          | 60,024  |                                             |        |                | 71,926  |               
|Assets held for sale                                                                                                            |                                                                                                                                 |                                                                                                                                                                          | 800     |                                             |        |                |        |               
|Intangible assets, net of accumulated amortization of $772
and $727 at April 27, 2003 and April 28, 2002, respectively          |                                                                                                                                 |                                                                                                                                                                          | 1,890   |                                             |        |                | 1,935   |               
|Other assets                                                                                                                    |                                                                                                                                 |                                                                                                                                                                          | 1,197   |                                             |        |                | 1,875   |               
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         |                                             |        |                |         |               
|                                                                                                                                |                                                                                                                                 | Total assets                                                                                                                                                             |         | $                                           | 71,304 |                |         | $              | 83,354 |  
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         |                                             |        |                |         |               
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         | Liabilities and Shareholders Equity        |        |                |         |                |        |   |        | 
|Current liabilities:                                                                                                            |                                                                                                                                 |                                                                                                                                                                          |         |                                             |        |                |         |               
|                                                                                                                                | Accounts payable                                                                                                                |                                                                                                                                                                          | $       | 3,630                                       |        |                | $       | 1,603          |       
|                                                                                                                                | Accrued expenses                                                                                                                |                                                                                                                                                                          |         | 8,314                                       |        |                |         | 7,220          |       
|                                                                                                                                | Restructuring accrual                                                                                                           |                                                                                                                                                                          |         | 579                                         |        |                |         | 2,065          |       
|                                                                                                                                | Current portion of long-term debt                                                                                               |                                                                                                                                                                          |         | 5,616                                       |        |                |         |               |       
|                                                                                                                                | Current portion of capital lease obligations                                                                                    |                                                                                                                                                                          |         | 1,335                                       |        |                |         |               |       
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         |                                             |        |                |         |               
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         | Total current liabilities                   |        |                | 19,474  |                |        |   | 10,888 | 
|Long-term debt                                                                                                                  |                                                                                                                                 |                                                                                                                                                                          | 33,943  |                                             |        |                |        |               
|Capital lease obligations                                                                                                       |                                                                                                                                 |                                                                                                                                                                          | 5,379   |                                             |        |                |        |               
|Other non-current liabilities                                                                                                   |                                                                                                                                 |                                                                                                                                                                          | 1,723   |                                             |        |                |        |               
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         |                                             |        |                |         |               
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         | Total liabilities not subject to
compromise |        |                | 60,519  |                |        |   | 10,888 | 
|Pre-petition liabilities subject to compromise                                                                                  |                                                                                                                                 |                                                                                                                                                                          |        |                                             |        |                | 54,757  |               
|Gap period liabilities subject to compromise                                                                                    |                                                                                                                                 |                                                                                                                                                                          |        |                                             |        |                | 2,181   |               
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         |                                             |        |                |         |               
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         | Total liabilities                           |        |                | 60,519  |                |        |   | 67,826 | 
|Shareholders equity:                                                                                                           |                                                                                                                                 |                                                                                                                                                                          |         |                                             |        |                |         |               
|                                                                                                                                |                                                                                                                                 | Common stock $0.03 par value. Authorized 35,000,000
shares; issued and outstanding 29,220,663 and 9,708,741
shares as of April 27, 2003 and April 28, 2002, respectively |         |                                             | 877    |                |         |                | 291    |  
|Additional paid-in capital                                                                                                      |                                                                                                                                 |                                                                                                                                                                          | 55,953  |                                             |        |                | 50,039  |               
|Retained deficit                                                                                                                |                                                                                                                                 |                                                                                                                                                                          | (46,045 | )                                           |        |                | (34,802 | )             
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         |                                             |        |                |         |               
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         | Total shareholders equity                  |        |                | 10,785  |                |        |   | 15,528 | 
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         |                                             |        |                |         |               
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         | Total liabilities and shareholders equity  |        | $              | 71,304  |                |        | $ | 83,354 | 
|                                                                                                                                |                                                                                                                                 |                                                                                                                                                                          |         |                                             |        |                |         |               

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

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ROADHOUSE GRILL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Fifty-Two Weeks Ended April 27, 2003, April 28, 2002, and April 29, 2001
($ in thousands, except per share data)

|                                                |                                     |                      |                                |        |                |         |                |        |                |         |          |        |        |         |  
|----------------------------------------------- | ----------------------------------- | -------------------- | ------------------------------ | ------ | -------------- | ------- | -------------- | ------ | -------------- | ------- | -------- | ------ | ------ | ------- | -
|                                                |                                     |                      |                                |        | April 27, 2003 |         | April 28, 2002 |        | April 29, 2001
|                                                |                                     |                      |                                |        |                |         |                |        |               
|Total revenues                                  |                                     | $                    | 140,924                        |        |                | $       | 158,982        |        |                | $       | 168,055  |       
|Restaurant operating expenses:                  |                                     |                      |                                |        |                |         |                |        |                |         |          |       
|Cost of restaurant sales:                       |                                     |                      |                                |        |                |         |                |        |                |         |          |       
|                                                |                                     | Food and beverage    |                                |        | 47,439         |         |                |        | 55,066         |         |          |        | 59,112 |        
|                                                |                                     | Labor and benefits   |                                |        | 47,860         |         |                |        | 51,817         |         |          |        | 54,059 |        
|                                                |                                     | Occupancy and other  |                                |        | 34,567         |         |                |        | 37,580         |         |          |        | 39,269 |        
|                                                |                                     | Pre-opening expenses |                                |        | 124            |         |                |        | 477            |         |          |        | 2,481  |        
|                                                |                                     |                      |                                |        |                |         |                |        |                |         |          |       
|                                                |                                     |                      | Total cost of restaurant sales |        |                | 129,990 |                |        |                | 144,940 |          |        |        | 154,921 |  
|Depreciation and amortization                   |                                     |                      | 7,460                          |        |                |         | 8,991          |        |                |         | 10,297   |       
|General and administrative expenses             |                                     |                      | 6,956                          |        |                |         | 9,106          |        |                |         | 10,954   |       
|Asset impairment                                |                                     |                      | 5,854                          |        |                |         | 7,507          |        |                |         | 3,066    |       
|Restructuring charge                            |                                     |                      | 46                             |        |                |         | 5,086          |        |                |         |         |       
|Reorganization expenses                         |                                     |                      | 2,726                          |        |                |         | 876            |        |                |         |         |       
|                                                |                                     |                      |                                |        |                |         |                |        |                |         |          |       
|                                                |                                     |                      | Total operating expenses       |        |                | 153,032 |                |        |                | 176,506 |          |        |        | 179,238 |  
|                                                |                                     |                      |                                |        |                |         |                |        |                |         |          |       
|Operating loss                                  |                                     |                      | (12,108                        | )      |                |         | (17,524        | )      |                |         | (11,183  | )     
|Other (expense) income :                        |                                     |                      |                                |        |                |         |                |        |                |         |          |       
|                                                | Gain (loss) on sale of fixed assets |                      |                                | 75     |                |         |                | (60    | )              |         |          |       |       
|                                                | Interest expense, net               |                      |                                | (2,289 | )              |         |                | (3,810 | )              |         |          | (3,655 | )     
|                                                | Other, net                          |                      |                                |       |                |         |                |       |                |         |          | 800    |       
|                                                |                                     |                      |                                |        |                |         |                |        |                |         |          |       
|                                                |                                     |                      | Total other expense            |        |                | (2,214  | )              |        |                | (3,870  | )        |        |        | (2,855  | )
|                                                |                                     |                      |                                |        |                |         |                |        |                |         |          |       
|Loss before income taxes and
extraordinary gain |                                     |                      | (14,322                        | )      |                |         | (21,394        | )      |                |         | (14,038  | )     
|Income tax (benefit) expense                    |                                     |                      | (1,241                         | )      |                |         | 49             |        |                |         | 1,818    |       
|                                                |                                     |                      |                                |        |                |         |                |        |                |         |          |       
|Loss before extraordinary gain                  |                                     |                      | (13,081                        | )      |                |         | (21,443        | )      |                |         | (15,856  | )     
|Extraordinary gain                              |                                     |                      | 1,838                          |        |                |         |               |        |                |         |         |       
|                                                |                                     |                      |                                |        |                |         |                |        |                |         |          |       
|Net loss                                        |                                     |                      | ($11,243                       | )      |                |         | ($21,443       | )      |                |         | ($15,856 | )     
|                                                |                                     |                      |                                |        |                |         |                |        |                |         |          |       

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|                                                                                   |                                |  |            |       |                |  |                |       |                |  |           |       |   |  | 
|---------------------------------------------------------------------------------- | ------------------------------ |  | ---------- | ----- | -------------- |  | -------------- | ----- | -------------- |  | --------- | ----- | - |  | 
|                                                                                   |                                |  |            |       | April 27, 2003 |  | April 28, 2002 |       | April 29, 2001
|                                                                                   |                                |  |            |       |                |  |                |       |               
|Basic earnings per share:                                                          |                                |  |            |       |                |  |                |       |                |  |           |      
|                                                                                   | Loss before extraordinary gain |  | $          | (0.65 | )              |  | $              | (2.21 | )              |  | $         | (1.63 | )
|                                                                                   |                                |  |            |       |                |  |                |       |                |  |           |      
|                                                                                   | Extraordinary gain             |  | $          | 0.09  |                |  | $              |      |                |  | $         |      |  
|                                                                                   |                                |  |            |       |                |  |                |       |                |  |           |      
|                                                                                   | Net loss                       |  | $          | (0.56 | )              |  | $              | (2.21 | )              |  | $         | (1.63 | )
|                                                                                   |                                |  |            |       |                |  |                |       |                |  |           |      
|Diluted earnings per share:                                                        |                                |  |            |       |                |  |                |       |                |  |           |      
|                                                                                   | Loss before extraordinary gain |  | $          | (0.65 | )              |  | $              | (2.21 | )              |  | $         | (1.63 | )
|                                                                                   |                                |  |            |       |                |  |                |       |                |  |           |      
|                                                                                   | Extraordinary gain             |  | $          | 0.09  |                |  | $              |      |                |  | $         |      |  
|                                                                                   |                                |  |            |       |                |  |                |       |                |  |           |      
|                                                                                   | Net loss                       |  | $          | (0.56 | )              |  | $              | (2.21 | )              |  | $         | (1.63 | )
|                                                                                   |                                |  |            |       |                |  |                |       |                |  |           |      
|Weighted average common shares
and share equivalents
outstanding-assuming dilution |                                |  | 20,000,744 |       |                |  | 9,708,741      |       |                |  | 9,708,741 |      
|                                                                                   |                                |  |            |       |                |  |                |       |                |  |           |      

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

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ROADHOUSE GRILL, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
For the Fifty-Two Weeks Ended April 27, 2003, April 28, 2002, and April 29, 2001
($ in thousands)

|                       |                               |  |            |            |              |   |                    |     |                   |   |           |       |       |   |         |         |   |   |        |         |   |  | 
|---------------------- | ----------------------------- |  | ---------- | ---------- | ------------ | - | ------------------ | --- | ----------------- | - | --------- | ----- | ----- | - | ------- | ------- | - | - | ------ | ------- | - |  | 
|                       |                               |  |            |            | Common Stock |   |                    |     |                   |   |           |       |       |   |         |         |  
|                       |                               |  |            |            |              |   | Additional Paid-in |     | Retained Earnings |   |           |       |      
|                       |                               |  |            |            | Shares       |   | Amount             |     | Capital           |   | (Deficit) |       | Total
|                       |                               |  |            |            |              |   |                    |     |                   |   |           |       |      
|Balance April 30, 2000 |                               |  | 9,708,741  |            |              | $ | 291                |     |                   | $ | 50,039    |       |       | $ | 2,497   |         |   | $ | 52,827 |        
|                       | Net loss                      |  |            |           |              |   |                    |    |                   |   |           |      |       |   |         | (15,856 | ) |   |        | (15,856 | )
|                       |                               |  |            |            |              |   |                    |     |                   |   |           |       |       |   |         |         |   |   |        |        
|Balance April 29, 2001 |                               |  | 9,708,741  |            |              |   | 291                |     |                   |   | 50,039    |       |       |   | (13,359 | )       |   |   | 36,971 |        
|                       | Net loss                      |  |            |           |              |   |                    |    |                   |   |           |      |       |   |         | (21,443 | ) |   |        | (21,443 | )
|                       |                               |  |            |            |              |   |                    |     |                   |   |           |       |       |   |         |         |   |   |        |        
|Balance April 28, 2002 |                               |  | 9,708,741  |            |              |   | 291                |     |                   |   | 50,039    |       |       |   | (34,802 | )       |   |   | 15,528 |        
|                       | Issuance of additional shares |  |            | 19,511,922 |              |   |                    | 586 |                   |   |           | 5,914 |       |   |         |        |   |   |        | 6,500   |  
|                       | Net loss                      |  |            |           |              |   |                    |    |                   |   |           |      |       |   |         | (11,243 | ) |   |        | (11,243 | )
|                       |                               |  |            |            |              |   |                    |     |                   |   |           |       |       |   |         |         |   |   |        |        
|Balance April 27, 2003 |                               |  | 29,220,663 |            |              | $ | 877                |     |                   | $ | 55,953    |       |       | $ | (46,045 | )       |   | $ | 10,785 |        
|                       |                               |  |            |            |              |   |                    |     |                   |   |           |       |       |   |         |         |   |   |        |        

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

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ROADHOUSE GRILL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Fifty-Two Weeks Ended April 27, 2003, April 28, 2002, and April 29, 2001
($ in thousands)

|                                                 |                                                     |                                                                                           |                                                     |        |           |        |           |        |           |        |       |         |         |        |  
|------------------------------------------------ | --------------------------------------------------- | ----------------------------------------------------------------------------------------- | --------------------------------------------------- | ------ | --------- | ------ | --------- | ------ | --------- | ------ | ----- | ------- | ------- | ------ | -
|                                                 |                                                     |                                                                                           |                                                     |        | April 27, |        | April 28, |        | April 29,
|                                                 |                                                     |                                                                                           |                                                     |        | 2003      |        | 2002      |        | 2001     
|                                                 |                                                     |                                                                                           |                                                     |        |           |        |           |        |          
|Cash flows from operating activities:            |                                                     |                                                                                           |                                                     |        |           |        |           |        |           |        |       |        
|                                                 |                                                     | Net loss                                                                                  |                                                     | $      | (11,243   | )      |           | $      | (21,443   | )      |       | $       | (15,856 | )     
|                                                 |                                                     | Adjustments to reconcile net loss to
net cash provided by (used in) operating
activities: |                                                     |        |           |        |           |        |           |        |       |         |         |       
|                                                 |                                                     |                                                                                           | Depreciation and amortization                       |        |           | 7,460  |           |        |           | 8,991  |       |         |         | 10,297 |  
|                                                 |                                                     |                                                                                           | Asset impairment                                    |        |           | 5,854  |           |        |           | 7,507  |       |         |         | 3,066  |  
|                                                 |                                                     |                                                                                           | Restructuring charge                                |        |           | 46     |           |        |           | 5,086  |       |         |         |       |  
|                                                 |                                                     |                                                                                           | Reorganization expenses                             |        |           | 2,726  |           |        |           | 876    |       |         |         |       |  
|                                                 |                                                     |                                                                                           | Forgiveness of debt due to reorganization           |        |           | (1,838 | )         |        |           |       |       |         |         |       |  
|                                                 |                                                     |                                                                                           | Net (gain) loss on sale/disposal of assets          |        |           | (75    | )         |        |           | 60     |       |         |         |       |  
|                                                 |                                                     |                                                                                           | Provision for bad debt                              |        |           | 6      |           |        |           | 336    |       |         |         |       |  
|                                                 |                                                     |                                                                                           | Deferred tax expense                                |        |           |       |           |        |           |       |       |         |         | 2,394  |  
|                                                 |                                                     |                                                                                           | Cash used for store closings                        |        |           |       |           |        |           | (404   | )     |         |         |       |  
|                                                 |                                                     | Changes in assets and liabilities:                                                        |                                                     |        |           |        |           |        |           |        |       |         |         |       
|                                                 |                                                     |                                                                                           | Decrease (increase) in accounts receivable          |        |           | 343    |           |        |           | 1,037  |       |         |         | (771   | )
|                                                 |                                                     |                                                                                           | (Increase) decrease in income tax receivable        |        |           | (864   | )         |        |           | 2,236  |       |         |         | (2,253 | )
|                                                 |                                                     |                                                                                           | Decrease in inventory                               |        |           | 142    |           |        |           | 157    |       |         |         | 160    |  
|                                                 |                                                     |                                                                                           | Decrease (increase) in prepaid expenses             |        |           | 394    |           |        |           | (548   | )     |         |         | 47     |  
|                                                 |                                                     |                                                                                           | Decrease in other assets                            |        |           | 506    |           |        |           | 219    |       |         |         | 507    |  
|                                                 |                                                     |                                                                                           | Increase (decrease) in accounts payable             |        |           | 682    |           |        |           | 862    |       |         |         | (5,284 | )
|                                                 |                                                     |                                                                                           | (Decrease) increase in restructuring accrual        |        |           | (874   | )         |        |           | 4,691  |       |         |         |       |  
|                                                 |                                                     |                                                                                           | (Decrease) increase in notes payable to vendor      |        |           |       |           |        |           | (1,117 | )     |         |         | 5,902  |  
|                                                 |                                                     |                                                                                           | Increase (decrease) in accrued expenses             |        |           | 424    |           |        |           | (905   | )     |         |         | 1,037  |  
|                                                 |                                                     |                                                                                           |                                                     |        |           |        |           |        |           |        |       |         |         |       
|                                                 | Net cash provided by (used in) operating
activities |                                                                                           |                                                     | 3,689  |           |        |           | 7,641  |           |        |       | (754    | )      
|                                                 |                                                     |                                                                                           |                                                     |        |           |        |           |        |           |        |       |         |         |       
|Cash used for reorganization items               |                                                     |                                                                                           | (2,519                                              | )      |           |        | (1,187    | )      |           |        |      |        
|Cash flows from investing activities:            |                                                     |                                                                                           |                                                     |        |           |        |           |        |           |        |       |        
|                                                 | Payment received from notes receivable              |                                                                                           |                                                     |       |           |        |           |       |           |        |       | 84      |        
|                                                 | Proceeds from sale-leaseback transactions           |                                                                                           |                                                     |       |           |        |           |       |           |        |       | 7,244   |        
|                                                 | Proceeds from sales of property and equipment       |                                                                                           |                                                     | 782    |           |        |           |       |           |        |       |        |        
|                                                 | Purchases of property and equipment                 |                                                                                           |                                                     | (2,194 | )         |        |           | (2,619 | )         |        |       | (14,796 | )      
|                                                 |                                                     |                                                                                           |                                                     |        |           |        |           |        |           |        |       |         |         |       
|                                                 |                                                     |                                                                                           | Net cash used in investing activities               |        |           | (1,412 | )         |        |           | (2,619 | )     |         |         | (7,468 | )
|                                                 |                                                     |                                                                                           |                                                     |        |           |        |           |        |           |        |       |         |         |       
|Cash flows from financing activities:            |                                                     |                                                                                           |                                                     |        |           |        |           |        |           |        |       |        
|                                                 | Proceeds from issuance of common stock              |                                                                                           |                                                     | 5,000  |           |        |           |       |           |        |       |        |        
|                                                 | Proceeds from loan from related party               |                                                                                           |                                                     |       |           |        |           |       |           |        |       | 1,500   |        
|                                                 | Proceeds from long-term debt                        |                                                                                           |                                                     |       |           |        |           |       |           |        |       | 11,123  |        
|                                                 | Repayment of long-term debt                         |                                                                                           |                                                     | (4,113 | )         |        |           | (1,448 | )         |        |       | (1,771  | )      
|                                                 | Payments on capital lease obligations               |                                                                                           |                                                     | (882   | )         |        |           | (776   | )         |        |       | (1,426  | )      
|                                                 |                                                     |                                                                                           |                                                     |        |           |        |           |        |           |        |       |         |         |       
|                                                 |                                                     |                                                                                           | Net cash provided by (used in) financing
activities |        |           | 5      |           |        |           | (2,224 | )     |         |         | 9,426  |  
|                                                 |                                                     |                                                                                           |                                                     |        |           |        |           |        |           |        |       |         |         |       
|(Decrease) increase in cash and cash equivalents |                                                     |                                                                                           | (237                                                | )      |           |        | 1,611     |        |           |        | 1,204 |        
|Cash and cash equivalents at beginning of
year   |                                                     |                                                                                           | 3,193                                               |        |           |        | 1,582     |        |           |        | 378   |        
|                                                 |                                                     |                                                                                           |                                                     |        |           |        |           |        |           |        |       |         |         |       
|Cash and cash equivalents at end of year         |                                                     | $                                                                                         | 2,956                                               |        |           | $      | 3,193     |        |           | $      | 1,582 |        
|                                                 |                                                     |                                                                                           |                                                     |        |           |        |           |        |           |        |       |         |         |       
|Supplementary disclosures:                       |                                                     |                                                                                           |                                                     |        |           |        |           |        |           |        |       |        
|                                                 | Interest paid                                       |                                                                                           | $                                                   | 1,994  |           |        | $         | 2,486  |           |        | $     | 3,515   |        
|                                                 |                                                     |                                                                                           |                                                     |        |           |        |           |        |           |        |       |         |         |       
|                                                 | Income taxes paid                                   |                                                                                           | $                                                   | 50     |           |        | $         | 40     |           |        | $     | 821     |        
|                                                 |                                                     |                                                                                           |                                                     |        |           |        |           |        |           |        |       |         |         |       

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

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ROADHOUSE GRILL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 27 2003, April 28, 2002, and April 29, 2001

(1)   BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

Roadhouse Grill, Inc. (the Company) was incorporated under the laws of
the state of Florida in 1992. The principal business of the Company is the
operation of specialty restaurants. The Company has also granted franchises
and licenses to operate restaurants under the Roadhouse Grill name. The
Company opened its first restaurant in Pembroke Pines, Florida (the greater Ft.
Lauderdale area) in 1993. As of April 27, 2003, there were 70 company-owned
Roadhouse Grill restaurants located in Alabama, Arkansas, Florida, Georgia,
Louisiana, Mississippi, New York, North Carolina, Ohio and South Carolina. Of
these, 35 are located in Florida.

The Company operates on a fifty-two or fifty-three week fiscal year. Each
fiscal quarter consists of thirteen weeks, except in the case of a fifty-three
week year, in which case the fourth fiscal quarter consists of fourteen weeks.

The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All significant intercompany
transactions and balances have been eliminated.

While in a Chapter 11 bankruptcy proceeding (see Note 2 below), the
Company applied the provisions of SOP 90-7, Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code, which does not significantly change
the application of accounting principles generally accepted in the United
States; however, it does require that the financial statements for periods
including and subsequent to the Chapter 11 bankruptcy distinguish transactions
and events that are directly associated with the reorganization from those
transactions that are the result of ongoing operations of the business.

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

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

On January 18, 2002 (the Petition Date), an involuntary petition (the
Involuntary Petition) for relief under Chapter 11 of the United States
Bankruptcy Code (the Bankruptcy Code) was filed against the Company by
certain of its creditors, all of which were affiliated with one another
(collectively, the Petitioning Creditors), in the United States Bankruptcy
Court for the Southern District of Florida (the Court). Prior to the
Petition Date, the Company had been experiencing significant cash flow problems
primarily resulting from the opening of 31 new restaurants in the prior three
years combined with a net loss of $15.9 million in fiscal year 2001 and a net
loss of $21.4 million in fiscal year 2002. Prior to the filing of the
Involuntary Petition, the Company had been in negotiations with the Petitioning
Creditors and its other major creditors in an effort to effect an out-of-court
restructuring of its liabilities.

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

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

In its plan of reorganization, the Company classified the claims of its
creditors and interests of its equity security holders and provided for the
treatment of such claims and interests. Under the Bankruptcy Code, various
classes of claims and interests were entitled to vote on whether to accept or
reject the plan of reorganization. On June 12, 2002, the Company filed
Debtors Second Amended and Restated Chapter 11 Plan of Reorganization, as
Modified (the Plan) and Debtors Second Amended and Restated Disclosure
Statement in Support of Chapter 11 Plan of Reorganization, as Modified (the
Disclosure Statement). The Court conducted a hearing on June 12, 2002 to
consider approval of the Disclosure Statement. On June 20, 2002, the Court
issued an order approving the Disclosure Statement, authorizing the Disclosure
Statement, Plan and ballot to be disseminated to creditors and equity security
holders and scheduling a hearing on confirmation of the Plan for August 21,
2002.

On June 25, 2002, a hearing was held on the motion of the Petitioning
Creditors to terminate the exclusivity period within which only the Company
could file a plan of reorganization and to delay the hearing on confirmation of
the Plan. On June 26, 2002,

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the Court terminated exclusivity but refused to postpone the hearing on
confirmation of the Plan.

Thereafter, Restaurants Acquisition I, Inc., an entity affiliated with the
Petitioning Creditors, filed a competing plan of reorganization, dated July 15,
2002 (the RAI Plan). The Petitioning Creditors and creditors affiliated with
them (collectively, CNL) vigorously opposed confirmation of the Plan. In
addition, certain other creditors initially cast ballots rejecting the Plan
and/or filed objections to confirmation of the Plan.

As the date of the confirmation hearing approached, the Company engaged in
further negotiations with rejecting and objecting creditors in an effort to
resolve their objections to the Plan. By August 19, 2002, most of the
objections had been resolved and the Company filed a modification of the Plan
reflecting the resolution of those objections (the Modification).

As of August 19, 2002, the principal remaining objections were the
objections of CNL. However, the Company reached agreement with CNL shortly
before the commencement of the confirmation hearing. Under the agreement, CNL
withdrew its objections to the Plan, changed its rejections to acceptances of
the Plan and caused the RAI Plan to be withdrawn. The agreement was embodied
in a term sheet between the Company and CNL dated August 21, 2002 (the Term
Sheet).

The hearing on confirmation of the Plan, as modified by the Modification
and the Term Sheet, took place on August 21, 2002. At the close of the
hearing, the Court announced that the Plan, as modified by the Modification,
the Term Sheet and the Confirmation Order (as hereinafter defined) (the
Confirmed Plan of Reorganization), would be confirmed. On August 23, 2002,
the Court issued its Order Confirming Debtors Second Amended and Restated
Chapter 11 Plan of Reorganization, as Modified (the Confirmation Order).

The Confirmed Plan of Reorganization became effective on September 20,
2002 (the Effective Date). Under the Confirmed Plan of Reorganization, the
Company received an infusion of new capital of $5.0 million in exchange for
13,888,889 shares of the authorized but unissued common stock of the Company,
constituting 47.53% of the outstanding stock of the reorganized Company. The
13,888,889 shares were issued in a private placement pursuant to Section 4(2)
of, and Regulation D promulgated under, the Securities Act of 1933, as amended
(the Private Placement Securities). The Private Placement Securities were
issued to Berjaya Group (Cayman) Limited (Berjaya), Prime Gaming Philippines,
Inc. (Prime), Tonto Capital Partners GP, and Stephen C. Saterbo (Saterbo),
as more particularly set forth in the table immediately below and reflecting
the post-restructuring percentage ownership for each respective investment.

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|                          |  |            |           |             |  |                  |      |           |  |  |           |  |  |            |       |  
|------------------------- |  | ---------- | --------- | ----------- |  | ---------------- | ---- | --------- |  |  | --------- |  |  | ---------- | ----- | -
|                          |  |            |           |             |  |                  |      |           |  |  |           |  |  | Percentage
|                          |  | Investment |           | Price/Share |  | Number of Shares |      | Ownership
|                          |  |            |           |             |  |                  |      |          
|Berjaya                   |  | $          | 3,000,000 |             |  | $                | 0.36 |           |  |  | 8,333,333 |  |  |            | 28.52 | %
|Prime                     |  |            | 500,000   |             |  |                  | 0.36 |           |  |  | 1,388,889 |  |  |            | 4.75  | %
|Tonto Capital
Partners GP |  |            | 1,000,000 |             |  |                  | 0.36 |           |  |  | 2,777,778 |  |  |            | 9.51  | %
|Saterbo                   |  |            | 500,000   |             |  |                  | 0.36 |           |  |  | 1,388,889 |  |  |            | 4.75  | %

Berjaya is the Companys majority shareholder, representing, with its
affiliates, ownership of approximately 66.5% of the Companys outstanding
Common Stock. It is headquartered in Malaysia. Prime is an affiliate of
Berjaya. It is 70% owned by Berjaya Group Berhad, which owns 100% of Berjaya.
Prime is headquartered in the Philippines. Tonto Capital Partners GP is
affiliated with Ayman Sabi, the Companys Chief Executive Officer, President,
and a director. Saterbo is a senior vice president, member of the board of
directors, and substantial shareholder of Colorado Boxed Beef Company, a former
major supplier to the Company.

Additionally, pursuant to the Confirmed Plan of Reorganization Berjaya
received, in full satisfaction of a $1.5 million loan to the Company, 4,166,667
shares of the Companys authorized but unissued common stock at $0.36 per
share, representing 14.26% of the outstanding stock of the reorganized Company.

In accordance with the Confirmed Plan of Reorganization, each existing
holder of Common Stock received additional Common Stock equal to 15% of the
shares which they previously held. After issuance of the additional shares,
the existing shareholders own an aggregate of 11,165,107 shares of the
outstanding common stock, representing 38.21% of the outstanding stock of the
reorganized Company. The total number of shares of common stock outstanding
after effecting the Confirmed Plan of Reorganization is 29,220,663.

Under bankruptcy law, actions by creditors to collect indebtedness owed
prior to the Petition Date and/or prior to the Relief Date were stayed and
certain other pre-petition and Gap (January 18, 2002 through April 16, 2002,
which is the period of time between the Petition Date and the Relief Date)
contractual obligations could not be enforced against the Company. The Company
received approval from the Court to pay certain pre-petition and gap
liabilities including employee salaries and wages, benefits, and other employee
obligations. Liabilities through the date the Company emerged from bankruptcy,
September 20, 2002, which were incurred pre-petition or during the gap period
had previously been classified as liabilities subject to compromise. With the
Company having emerged from bankruptcy, these liabilities were adjusted during
fiscal year 2003 to the amounts to be paid pursuant to the Confirmed Plan of
Reorganization. As a result, the Company has recorded an extraordinary gain
relating to the early extinguishment of debt in the accompanying consolidated
statements of operations in the amount of $1.8 million for fiscal year 2003.
This gain results primarily from obligations

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to pay lease payments that were stayed while the Company was in bankruptcy
and other obligations that were canceled as a result of the bankruptcy
proceeding.

As of April 27, 2003, substantially all bankruptcy claims have been
resolved. See Note 9 for a description of the debt agreements that have been
executed as settlement of certain bankruptcy claims. Currently, the Company is
working to resolve certain remaining open bankruptcy claims. Settlement of
these claims could result in the execution of additional debt agreements
pursuant to the provisions of the Confirmed Plan of Reorganization and the
recognition of additional extraordinary gains or losses to the extent that the
final settlement amount differs from the liabilities currently recorded in the
Companys Consolidated Balance Sheet. However, these remaining open bankruptcy
claims are not considered material to the Companys financial position and any
extraordinary gain or loss that may result is not expected to be material to
the future consolidated results of operations.

As restructured under the Confirmed Plan of Reorganization, the Companys
secured and unsecured debt, as well as assumed leases and executory contracts,
will require substantial monthly payments over extended future periods. The
Companys future success will depend, in part, on its ability to meet these
payment obligations. There is no assurance that the Company will be able to do
so.

Reorganization items represent amounts incurred as a result of the Chapter
11 proceedings in accordance with SOP 90-7. The Company has incurred $3.6
million of expenses relating to its reorganization, including $2.7 million and
$0.9 million, respectively, during fiscal year 2003 and fiscal year 2002.
These expenses primarily include fees for legal, accounting, consulting, and
outside services. Additionally, on the Petition Date, the Company stopped
accruing interest on all unsecured pre-petition debt in accordance with SOP
90-7. With the confirmation of its Plan of Reorganization, the Company is now
required to make regular payments on all debt pursuant to the Confirmed Plan of
Reorganization.

(3)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY AND EQUIPMENT

Property and equipment are carried at cost less accumulated depreciation.
The cost of restaurants held under capital leases is recorded at the lower of
the net present value of the minimum lease payments or the fair value of the
leased property at the inception of the lease. Repairs and maintenance are
charged to expense as incurred. Major renewals and betterments, which
substantially extend the useful life of the property, are capitalized and
depreciated over the useful life of the asset. When assets are retired or
otherwise disposed of, the cost and accumulated depreciation are removed from
their respective accounts and any gain or loss is recognized. Property and
equipment are depreciated on a straight-line basis over their useful lives.
Estimated useful lives include
consideration of lease renewals in situations in which the Company has
both an option and the current intent to renew the lease.

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The Company accounts for long-lived assets in accordance with SFAS No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets. This
statement requires that long-lived assets be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. The Company regularly reviews the performance of
its individual restaurants to identify possible under-performing operations
that should be assessed for possible impairments of long-lived assets. As part
of this analysis, management considers factors that have in the past and may
continue to impact operating results. Recoverability of assets to be held and
used is measured by a comparison of the carrying amount of an asset to the
future net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the assets exceeds fair value of the
assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell.

ASSETS HELD FOR SALE

Assets held for sale include properties owned by the Company which are
currently being marketed for sale and are carried at estimated net realizable
value.

INTANGIBLE ASSETS

The Company accounts for intangible assets in accordance with SFAS No.
142, Goodwill and Other Intangible Assets. As of April 27, 2003, the Company
had unamortized goodwill in the amount of $1.5 million and unamortized
identifiable intangible assets in the amount of $0.4 million. In accordance
with SFAS No. 142, goodwill is subject to an annual impairment test based on
its fair value and no amortization of goodwill is recorded. Therefore, the
Company did not amortize goodwill in fiscal year 2003. The amortization
expense related to goodwill that was recorded in each of fiscal years 2002 and
2001 was $0.1 million. Other intangible assets, which have been determined to
have a finite life, are being amortized over their useful lives.

CASH AND CASH EQUIVALENTS

The Company considers all short-term investments with an original maturity
of three months or less to be cash equivalents.

During fiscal year 2003, the Company recorded certain non-cash
transactions including the recording of capital leases of approximately $3.6
million which increased property, plant and equipment and capital lease
obligations by a like amount. In addition, pursuant to the Confirmed Plan of
Reorganization, during fiscal year 2003, the Company converted various accounts
payable and accrued expense liabilities to long term debt in the aggregate
amount of approximately $12.9 million.

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INVENTORY

Inventory is valued at the lower of cost (based on first-in, first-out
inventory costing) or net realizable value and consists primarily of restaurant
food items, beverages and paper supplies.

INCOME TAXES

Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

During fiscal 2003, the Company recognized a federal income tax benefit of
$1.2 million relating to anticipated income tax refunds relating to federal
carryback claims of the Companys alternative minimum tax net operating loss
generated for the tax year ended April 28, 2002 and amendments of previously
filed federal and state income tax returns. Of this amount, $0.6 million was
collected in fiscal 2003 and $0.6 million has been collected-to-date in fiscal
2004. The Company has also filed amended income tax returns requesting
additional income tax refunds totaling approximately $0.1 million. Although
there can be no assurance, these refunds are currently anticipated to be
received by the end of the second quarter of fiscal 2004, and will be
recognized in the Companys statement of operations when realizability is
assured.

PRE-OPENING COSTS

Pre-opening costs are costs incurred in the opening of new restaurants
(primarily payroll costs). Deferred costs related to restaurant sites
subsequently determined to be unsatisfactory and general site selection costs
that cannot be identified with a specific restaurant are charged to operations
as incurred.

FISCAL YEAR

The Companys fiscal year ends on the last Sunday in April.

USE OF ESTIMATES

The preparation of the Consolidated Financial Statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions about future events that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and

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expenses during the reporting period. Future events and their effects
cannot be determined with absolute certainty. Therefore, the determination of
estimates requires the exercise of judgment. Actual results inevitably will
differ from those estimates, particularly with respect to matters impacted by
the proceedings under Chapter 11, and such differences may be material to the
Consolidated Financial Statements. Amounts reported in the Companys
Consolidated Financial Statements that are based, in part, on the use of
estimates include reserves relating to the collectibility of accounts
receivable, insurance reserves relating to claim costs required to be funded by
the Company, the recoverability of deposits and other prepaid items, estimated
accrued property taxes and other accrued liabilities for which actual invoices
have not yet been received and the liability for unredeemed gift certificates
and gift cards. Various assumptions and other factors underlie the
determination of these significant estimates. The process of determining
significant estimates is fact specific and takes into account factors such as
historical experience, current and expected economic conditions, product mix,
and in some cases, actuarial techniques. Roadhouse Grill constantly
re-evaluates these significant factors and makes adjustments where facts and
circumstances dictate.

Management believes that the assumptions and other factors used to
determine these estimates are reasonable and that, with the exception of
insurance reserves relating to claim costs required to be funded by the
Company, changes in these assumptions would not have a material impact on the
Companys financial position or results of operations. In regards to insurance
reserves, recorded liabilities are based upon an estimate of the total amount
that may be paid to settle claims required to be funded by the Company and
incurred through the balance sheet date including consideration of amounts
paid-to-date in relation to the individual claims, an analysis of the loss
development on all reported claims, potential legal or other related costs and
any stop loss limits applicable under the Companys insurance policies. Such
reserves are subject to change based upon any development that occurs in
relation to the outstanding claims subsequent to the preparation of the
Companys Consolidated Balance Sheet. As of April 27, 2003 and April 28, 2002,
total recorded insurance reserves were $2.0 million and $1.1 million,
respectively.

In addition, asset impairment charges, restructuring charges, and the
reserve for restructuring are predominantly based on estimates of the market
value of assets of which the Company plans to dispose and the amount of future
cash flows estimated to be realized relating to impaired assets that are
anticipated to be utilized in the Company operations in the future. Such
estimates will also be affected by the time interval required to dispose of
those assets to be sold. The assumptions used, particularly in regards to
estimates of future cash flows to be realized relating to impaired or
potentially impaired assets, are critical in assessing a potential impairment
and, if any, estimating the amount of the impairment. These assumptions
require consideration of future trends in key operating ratios and the timing
and impact of possible changes in operations relating to specific assets.
Changes in these assumptions could have a material impact on the timing and
amount of possible asset impairments and therefore the Companys results of
operations.

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DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values of financial instruments have been determined
based on available information and appropriate valuation methodologies. The
carrying amounts of accounts receivable, accounts payable and accrued expenses
approximate fair value due to the short-term nature of the accounts. The fair
value of long-term debt is estimated based on market rates of interest
currently available to the Company. The carrying values of long-term debt and
capital leases at April 27, 2003 and April 28, 2002 approximate fair value.

REVENUE RECOGNITION

Sales by Company-operated restaurants are recognized daily as cash and
credit card receipts are received. Revenues from franchised and affiliated
restaurants are derived from royalties and initial setup fees. Initial fees
are recognized upon opening of a restaurant, which is when the Company has
performed substantially all initial services required by the franchise
arrangement. Royalties and income from the Companys joint venture are
recorded as the sales of the franchisees and joint venture are reported to the
Company. In addition, the Company receives rental income from various sources.
All uncollected income related to franchise and joint venture operations is
subject to an assessment of collectibility and an allowance for doubtful
accounts is recorded if collection is not reasonably assured.

ADVERTISING COSTS

The Company expenses all advertising costs as incurred. Advertising
expense for the fifty-two weeks ended April 27, 2003, April 28, 2002 and April
29, 2001 was $3.4 million, $2.6 million, $3.5 million, respectively.
Advertising expense is included within occupancy and other in the
accompanying Consolidated Statements of Operations.

STOCK BASED COMPENSATION

The Company accounts for stock options as prescribed by Accounting
Principles Board Opinion No. 25 as amended by Statement of Financial Accounting
Standard (SFAS) No. 148, Accounting for Stock-Based Compensation, Transition,
and Disclosure. Under APB Opinion No 25, compensation expense is recorded when
the exercise price of the Companys employee stock option is less than the
market price of the underlying stock at the date of grant.

The Company applies Accounting Principles Board Opinion No. 25 Accounting
for Stock Issued to Employees, in accounting for its stock option plans and,
accordingly, recognized compensation expense for certain options. Had the
Company determined compensation cost based on the fair value at the grant date
for its stock options under SFAS No. 123, Accounting for Stock-Based
Compensation, the Companys net income (loss) would have been reduced
(increased) to the pro forma amounts indicated below (dollars in thousands,
except per share data):

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|                           |             |  |                       |         |                |  |                |         |   |  |   |         |  
|-------------------------- | ----------- |  | --------------------- | ------- | -------------- |  | -------------- | ------- | - |  | - | ------- | -
|                           |             |  | Fifty-Two Weeks Ended
|                           |             |  |                      
|                           |             |  | April 27, 2003        |         | April 28, 2002 |  | April 29, 2001
|                           |             |  |                       |         |                |  |               
|Net loss                   |             |  |                       |         |                |  |                |         |   |  |   |        
|                           | As reported |  | $                     | (11,243 | )              |  | $              | (21,443 | ) |  | $ | (15,856 | )
|                           | Pro forma   |  |                       | (11,243 | )              |  |                | (21,443 | ) |  |   | (16,262 | )
|Basic net loss
per share   |             |  |                       |         |                |  |                |         |   |  |   |        
|                           | As reported |  | $                     | (0.56   | )              |  | $              | (2.21   | ) |  | $ | (1.63   | )
|                           | Pro forma   |  |                       | (0.56   | )              |  |                | (2.21   | ) |  |   | (1.67   | )
|Diluted net loss
per share |             |  |                       |         |                |  |                |         |   |  |   |        
|                           | As reported |  | $                     | (0.56   | )              |  | $              | (2.21   | ) |  | $ | (1.63   | )
|                           | Pro forma   |  |                       | (0.56   | )              |  |                | (2.21   | ) |  |   | (1.67   | )

Pro forma net loss reflects only options granted during Fiscal Year 2000.
Therefore, the full impact of calculating compensation cost for stock options
under SFAS No. 123 is not reflected in the pro forma net (loss) income amounts
presented above because compensation cost is reflected over the options
vesting period ranging from one to three years.

Stock option activity during the periods indicated is as follows:

|                          |                                  |  |           |          |                  |  |      |      | 
|------------------------- | -------------------------------- |  | --------- | -------- | ---------------- |  | ---- | ---- | 
|                          |                                  |  | Number of |          | Weighted Average
|                          |                                  |  | Shares    |          | Exercise Price  
|                          |                                  |  |           |          |                 
|Balance at April 30, 2000 |                                  |  | 825,695   |          |                  |  | 5.24 |     
|                          | Granted                          |  |           |         |                  |  |      |     | 
|                          | Exercised                        |  |           |         |                  |  |      |     | 
|                          | Forfeited                        |  |           | (144,799 | )                |  |      | 6.11 | 
|                          | Expired                          |  |           |         |                  |  |      |     | 
|                          |                                  |  |           |          |                  |  |      |     
|Balance at April 29, 2001 |                                  |  | 680,896   |          |                  |  | 5.04 |     
|                          | Granted                          |  |           |         |                  |  |      |     | 
|                          | Exercised                        |  |           |         |                  |  |      |     | 
|                          | Forfeited                        |  |           | (159,797 | )                |  |      | 6.51 | 
|                          | Expired                          |  |           |         |                  |  |      |     | 
|                          |                                  |  |           |          |                  |  |      |     
|Balance at April 28, 2002 |                                  |  | 521,099   |          |                  |  | 4.61 |     
|                          | Granted                          |  |           |         |                  |  |      |     | 
|                          | Exercised                        |  |           |         |                  |  |      |     | 
|                          | Forfeited                        |  |           | (11,166  | )                |  |      | 6.58 | 
|                          | Expired                          |  |           |         |                  |  |      |     | 
|                          | Cancelled per the
Confirmed Plan |  |           | (509,933 | )                |  |      | 4.56 | 
|                          |                                  |  |           |          |                  |  |      |     
|Balance at April 27, 2003 |                                  |  |          |          |                  |  |     |     
|                          |                                  |  |           |          |                  |  |      |     

At April 28, 2002, the range of exercise prices and weighted average
remaining contractual life of outstanding options was $3.50 to $7.50 and 5.9
years, respectively. At

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April 28, 2002, the number of options exercisable was 521,099, and the weighted
average exercise price of those options was $4.61. All outstanding options
were cancelled September 20, 2002, in accordance with the Confirmed Plan of
Reorganization.

NEW ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets.Under
these new standards, all acquisitions subsequent to June 30, 2001, must be
accounted for by the purchase method of accounting, and goodwill is no longer
amortized over its useful life. Rather, goodwill will be subject to an annual
impairment test based on its fair value. Separable intangible assets that are
determined to have a finite life will continue to be amortized over their
useful lives. The Company implemented SFAS No. 141 effective June 30, 2001.
This statement had no impact on the Company. The Company implemented SFAS No.
142 effective April 28, 2002. The impact of the adoption of this pronouncement
was not material. As of April 27, 2003, the Company had unamortized goodwill
in the amount of $1.5 million and unamortized identifiable intangible assets in
the amount of $0.4 million, all of which are subject to the provisions of SFAS
Nos. 141 and 142. No amortization related to goodwill expense was recorded for
the year ended April 27, 2003. Amortization expense related to goodwill was
$0.1 million for the year ended April 28, 2002.

In August 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. SFAS No. 144 supersedes SFAS No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of. SFAS No. 144 retained substantially all of the
requirements of SFAS No. 121 while resolving certain implementation issues.
SFAS No. 144 is effective for fiscal years beginning after December 15, 2001.
The impact of adopting SFAS No. 144 was not material.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statement
No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. Under Statement No. 4, all gains and losses from extinguishments
of debt were required to be aggregated and, if material, classified as an
extraordinary item, net of related income tax effect. This Statement
eliminates Statement No. 4 and as a result, gains and losses from
extinguishment of debt should be classified as extraordinary items only if they
meet the criteria in Accounting Principles Board Opinion 30, Reporting the
Results of Operations  Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions. Additionally, this Statement amends SFAS No. 13, Accounting
for Leases, such that lease modifications that have economic effects similar
to sale-leaseback transactions be accounted for in a similar manner as a sale-leaseback. This Statement is generally effective for financial statements
issued on or after May 15, 2002. The impact of adopting SFAS No. 145 was not
material.

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##### Table of Contents



In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. This Statement addresses
financial accounting and reporting for costs associated with exit or disposal
activities and supercedes Emerging Issues Task Force Issue No. 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit
an Activity (including certain costs incurred in a restructuring). A
liability for a cost associated with an exit or disposal activity shall be
recognized and measured initially at its fair value in the period in which the
liability is incurred, except for certain qualifying employee termination
benefits. This Statement will be effective for exit or disposal activities
initiated by the Company after December 31, 2002, which, to date, have not been
applicable.

In December 2002, the FASB issued Statement No. 148, Accounting for
Stock-Based Compensation  Transition and Disclosure, an amendment of FASB
Statement No. 123 (SFAS 148). SFAS 148 amends FASB Statement No. 123,
Accounting for Stock-Based Compensation, to provide alternative methods of
transition for an entity that voluntarily changes to the fair value based
method of accounting for stock-based employee compensation and to require
prominent disclosures about the effects on reported net income of an entitys
accounting policy decisions with respect to stock-based employee compensation.
SFAS 148 also amends APB Opinion No. 28, Interim Financial Reporting, to
require disclosures about those effects in interim financial information. The
Company currently accounts for its stock-based compensation awards to employees
and directors under the accounting prescribed by Accounting Principles Board
Opinion No. 25 and provides the disclosures required by SFAS No. 123. The
Company currently intends to continue to account for its stock-based
compensation awards to employees and directors under the accounting prescribed
by Accounting Principles Board Opinion No. 25 and will adopt the additional
disclosure provisions of SFAS 148.

In December 2002, the FASB issued Interpretation 45 (FIN 45), Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others. For a guarantee subject to FASB
Interpretation 45, a guarantor is required to:



| |  |  | measure and recognize the fair value of the guarantee at
inception (for many guarantees, fair value will be determined using
a present value method); and                                                                                                                                                                                                                                           
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | provide new disclosures regarding the nature of any
guarantees, the maximum potential amount of future guarantee
payments, the current carrying amount of the guarantee liability,
and the nature of any recourse provisions or assets held as
collateral that could be liquidated and allow the guarantor to
recover all or a portion of its payments in the event guarantee
payments are required.

FIN 45 is effective for financial statements for fiscal years ending after
December 15, 2002. The Company is currently in compliance with the provisions
of the new pronouncement.

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(4)    ASSET IMPAIRMENT AND RESTRUCTURING CHARGES

In September 2001, the Company closed one unprofitable restaurant. In
October 2001, the Company made the decision to close and sell 13 additional
unprofitable restaurants. All but one of those restaurants was closed by
November 12, 2001. The remaining restaurant continues to be operated while the
Company is considering a possible sale. The Company recorded a $5.8 million
asset impairment/restructure charge in the second quarter of fiscal year 2002.
During the fourth quarter of fiscal year 2002, the Company increased its
impairment/restructure charge relating to those 13 stores from $5.8 million to
$9.6 million. Also, in the fourth quarter of fiscal year 2002, the Company
accrued for an asset impairment/restructure charge for four additional
restaurants that were closed subsequent to April 28, 2002 and for two
undeveloped restaurant sites. The Companys management made the decision to
close these four restaurants and the decision not to build on the two
undeveloped restaurant sites in the fourth quarter of fiscal year 2002.
However, the actual closing of the restaurants occurred subsequent to the
fiscal year end. The asset impairment/restructure charge relating to these
four restaurants and the exit from the two undeveloped restaurant sites totaled
$3.0 million.

During the thirteen weeks ended October 27, 2002, the restructuring
accrual was reduced by $3.7 million due to the reclassification of certain
obligations to long term debt or capital lease obligation based on the final
terms of the Confirmed Plan of Reorganization and an additional restructuring
charge of $0.1 million was recorded primarily to adjust an estimated lease
commitment liability to its final negotiated amount. Also, during the second
quarter of fiscal year 2003, the Company recognized a $4.8 million asset
impairment charge relating to long-lived assets at certain restaurants that are
not performing as expected and fixtures and equipment owned or relating to
capital leases at certain of the closed restaurants described above. The asset
impairment relating to the under-performing restaurants was based on the
estimated future cash flow projections of those restaurants being insufficient
to recover the cost of the long-lived assets. The asset impairment recorded
during the thirteen weeks ended October 27, 2002 also included the recognition
of an impairment of $0.3 million relating to a former deposit that has been
deemed not to be collectable.

During the thirteen weeks ended January 26, 2003, the Company reduced its
restructuring accrual by $0.1 million to reflect a change in the estimated
amount to be paid relating to certain of its rejected lease commitments as a
result of final negotiations relating to these obligations. Also, during the
thirteen weeks ended April 27, 2003, the Company recognized an asset impairment
of $0.8 million relating to the final closure of the restaurant sites discussed
above and an analysis of the value of the equipment removed and retained from
these locations.

The following is a summary of the significant components of the Companys
asset impairment and restructuring charges for fiscal 2002 and fiscal 2003 (in
millions):

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|                                       |       |   |             |     |             |   |     |      | 
|-------------------------------------- | ----- | - | ----------- | --- | ----------- | - | --- | ---- | 
|                                       |       |   | Fiscal 2003 |     | Fiscal 2002
|                                       |       |   |             |     |            
|Asset impairment                       |       | $ | 5.9         |     |             | $ | 7.5 |     
|Loss on rejection of lease commitments |       |   |            |     |             |   | 3.8 |     
|Lease payments                         |       |   |            |     |             |   | 1.1 |     
|Bank and other charges                 |       |   |            |     |             |   | 0.2 |     
|                                       |       |   |             |     |             |   |     |     
|                                       | Total |   | $           | 5.9 |             |   | $   | 12.6 | 
|                                       |       |   |             |     |             |   |     |     

Asset impairment for fiscal 2002 included the estimated loss on the
closing or abandonment of the 18 restaurants and/or restaurant sites. In the
case of the five mortgaged restaurant sites and the six restaurant sites on
which the Company had a ground lease and built a building, the charge
represents the difference between the net book value of the assets and the
estimated net sale proceeds after all fees and commissions. The loss on
rejection of lease commitments represents the settlement amount of leases
rejected under the Confirmed Plan of Reorganization. Lease payments represent
the value of anticipated lease payments until all of the real estate leased
assets are sold. Bank and other charges include the cost to restructure all of
the Companys debt with its lenders and other fees associated with the
Confirmed Plan of Reorganization including legal fees, loan documentation fees
and other fees. Other charges also include all of the other costs related to
shut down of the closed restaurant locations including travel expense, the cost
to relocate the food inventory and equipment to other locations and other
miscellaneous costs.

The following is a summary of the activity in the Companys accrual for
restructuring charges (in millions):

|                                       |       |   |               |     |                |   |              |     |                |   |     |     |  |   |     |     | 
|-------------------------------------- | ----- | - | ------------- | --- | -------------- | - | ------------ | --- | -------------- | - | --- | --- |  | - | --- | --- | 
|                                       |       |   |               |     |                |   | Paid on      |     | Liabilities    |   |     |     | 
|                                       |       |   | Restructuring |     | Or Prior to    |   | Reclassified |     | Balance as of 
|                                       |       |   | Charges       |     | April 27, 2003 |   | To Debt      |     | April 27, 2003
|                                       |       |   |               |     |                |   |              |     |               
|Loss on rejection of
lease commitments |       | $ | 3.8           |     |                | $ |             |     |                | $ | 3.7 |     |  | $ | 0.1 |    
|Lease payments                         |       |   | 1.1           |     |                |   | 0.7          |     |                |   |    |     |  |   | 0.4 |    
|Bank and other
charges                 |       |   | 0.2           |     |                |   | 0.1          |     |                |   |    |     |  |   | 0.1 |    
|                                       |       |   |               |     |                |   |              |     |                |   |     |     |  |   |     |    
|                                       | Total |   | $             | 5.1 |                |   | $            | 0.8 |                |   | $   | 3.7 |  |   | $   | 0.6 | 
|                                       |       |   |               |     |                |   |              |     |                |   |     |     |  |   |     |    

(5)    LIQUIDITY

See Note 2 for a description of the Companys recently completed Chapter
11 bankruptcy proceedings.

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##### Table of Contents



The Companys material financial commitments relate principally to its
working capital requirements and its obligations to make operating and capital
lease and term loan payments, monthly interest payments on its various loans
and lease payments in accordance with the terms of its real property leases.
As of April 27, 2003, total minimum annual payments required under the
Companys note and lease obligations, including interest thereon, were $17.1
million. In addition, capital requirements relating to the opening of new
restaurants have in the past been (and may in the future be) significant.

The Company opened one new restaurant in fiscal year 2003 at a total cost
of approximately $1.1 million. Also, the Company opened one additional
restaurant in June 2003 at a total cost of $1.8 million, of which $1.4 million
was expended during fiscal year 2003. The Company does not currently expect to
open any additional Company-owned restaurants in fiscal year 2004. At this
time, it is expected that the cash required to develop new restaurants beyond
fiscal 2004 will be funded from operations. Should cash from operations be
insufficient for future expansion, and additional capital through debt and
equity sources be unavailable, there can be no assurance that the Company will
be able to open additional restaurants.

During fiscal year 2002, the Companys primary sources of working capital
were the sale-leaseback credit facility with Franchise Finance Corporation of
America (FFCA), which is described below and working capital provided by
operations. The FFCA debt was restructured as a result of the Confirmed Plan
of Reorganization. During fiscal year 2003, the Companys primary sources of
working capital were the debt restructuring and working capital provided by
operations. The Company also filed for federal income tax refunds totaling
approximately $1.2 million during fiscal year 2003, of which $0.6 million was
collected in fiscal year 2003 and the remaining $0.6 million was collected in
fiscal year 2004. The Company has also filed for approximately $0.2 million in
additional federal and state income tax refunds in fiscal year 2004, which it
presently expects to collect during the first half of the fiscal year. The
Company expects that its primary sources of working capital in fiscal year 2004
will be cash flow from operations, the collection of income tax refunds and the
sale of food and beverage credits and possible refinance of the mortgage on its
corporate headquarters building as more fully described in Notes 9, 13 and 20.

The Company has experienced significant cash flow problems in the past.
The Company believes that its ability to generate cash from operations is
dependent upon, among other things, increased demand for its products, a
continued commitment to providing an excellent dining experience for its
customers, the development and implementation of successful marketing
strategies and continuing its efforts to reduce its operating costs. The
Company has implemented revenue enhancement programs including the
implementation of a new menu with enhanced menu items in June 2003 along with
cost reduction initiatives designed to produce positive cash flow and achieve
sustainable profitable operations. There can be no assurance that these
initiatives will be

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##### Table of Contents



effective in generating profits or producing sufficient cash flows to fund
operating requirements, including debt repayments and lease obligations.

See Notes 7, 8 and 9 for a description of the Companys current
outstanding debt and capital and operating lease obligations. As of April 27,
2003, total minimum annual payments required under the Companys note and lease
obligations, including interest thereon, were $17.1 million.

Capital requirements relating to the implementation of the Companys
business plan have been and will continue to be significant. If cash generated
from the Companys operations and other possible sources described above are
insufficient to fund the Companys financial commitments and working capital
requirements (including amounts required to support future growth), the Company
will have to obtain additional financing. There can be no assurance that
additional debt and/or equity financing will be available on terms acceptable
to the Company, or at all. In the event the Company is unable to secure needed
additional financing, the Company may have to significantly curtail its
operations.

(6)    PROPERTY AND EQUIPMENT

Property and equipment, net consists of the following (dollars in
thousands):

|                               |  |                |         |                |  |              |         |   |  |            |  | 
|------------------------------ |  | -------------- | ------- | -------------- |  | ------------ | ------- | - |  | ---------- |  | 
|                               |  |                |         |                |  |              |         |   |  | Estimated 
|                               |  | April 27, 2003 |         | April 28, 2002 |  | Useful Lives
|                               |  |                |         |                |  |             
|Building                       |  | $              | 20,572  |                |  | $            | 21,815  |   |  | 20 years  
|Land                           |  |                | 11,519  |                |  |              | 15,066  |   |  |            |  | 
|Furniture and equipment        |  |                | 27,603  |                |  |              | 26,101  |   |  | 3-7 years 
|Leasehold improvements         |  |                | 48,713  |                |  |              | 50,181  |   |  | 7-20 years
|                               |  |                |         |                |  |              |         |   |  |            |  | 
|                               |  |                | 108,407 |                |  |              | 113,163 |   |  |            |  | 
|Less: accumulated
depreciation |  |                | (49,741 | )              |  |              | (42,766 | ) |  |            |  | 
|                               |  |                |         |                |  |              |         |   |  |            |  | 
|                               |  |                | 58,666  |                |  |              | 70,397  |   |  |            |  | 
|Construction in progress       |  |                | 1,358   |                |  |              | 1,529   |   |  |            |  | 
|                               |  |                |         |                |  |              |         |   |  |            |  | 
|                               |  | $              | 60,024  |                |  | $            | 71,926  |   |  |            |  | 
|                               |  |                |         |                |  |              |         |   |  |            |  | 

Included in property and equipment are buildings and equipment under
capital leases of $9.4 million and $8.7 million at April 27, 2003 and April 28,
2002, respectively. The Company did not capitalize any interest costs during
fiscal years 2003 or 2002. The Company capitalized interest costs of
approximately $0.3 million during fiscal year 2001 relating to qualifying
construction projects.

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##### Table of Contents



(7)    CAPITAL LEASES

The following is a schedule of future minimum lease payments required
under capital leases as of April 27, 2003 (dollars in thousands):

|                                                                                         |  |   |        |  
|---------------------------------------------------------------------------------------- |  | - | ------ | -
|2004                                                                                     |  | $ | 1,795  |  
|2005                                                                                     |  |   | 1,477  |  
|2006                                                                                     |  |   | 1,345  |  
|2007                                                                                     |  |   | 1,483  |  
|2008                                                                                     |  |   | 461    |  
|Thereafter                                                                               |  |   | 2,218  |  
|                                                                                         |  |   |        |  
|Total minimum lease payments                                                             |  |   | 8,779  |  
|Less: amount representing interest at varying rates
ranging from 5 percent to 16 percent |  |   | (2,065 | )
|                                                                                         |  |   |        |  
|Present value of net minimum capital lease
payments                                      |  |   | 6,714  |  
|Less: current portion of capital lease obligations                                       |  |   | 1,335  |  
|                                                                                         |  |   |        |  
|Present value of minimum capital lease obligations
excluding current portion             |  | $ | 5,379  |  
|                                                                                         |  |   |        |  

The Company did not enter into any sale-leaseback transactions during
fiscal years 2003 or 2002. During fiscal year 2001, the Company entered into
13 sale-leaseback transactions that were accounted for as capital leases for
real estate in the amount of $7.2 million. No gain or loss was deferred or
recognized in connection with these transactions.

(8)    OPERATING LEASES

The Company is a party to various operating lease agreements relating to
the rental of land and buildings and equipment at many of its restaurants.
Such agreements range in terms of up to 20 years and generally provide the
Company the option to renew for additional periods. The agreements generally
also require significant penalties to be paid in the event the lease is
terminated prior to its expiration. The following is a schedule of future
minimum lease payments required under operating leases that have remaining
noncancelable lease terms in excess of one year as of April 27, 2003 (dollars
in thousands):

|                             |  |   |        | 
|---------------------------- |  | - | ------ | 
|2004                         |  | $ | 6,837  | 
|2005                         |  |   | 6,765  | 
|2006                         |  |   | 6,556  | 
|2007                         |  |   | 6,001  | 
|2008                         |  |   | 5,377  | 
|Thereafter                   |  |   | 29,623 | 
|                             |  |   |        | 
|Total minimum lease payments |  | $ | 61,159 | 
|                             |  |   |        | 

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##### Table of Contents



The total rent expense for operating leases was $10.7 million, $12.1
million and $11.0 million, for Fiscal Year 2003, Fiscal Year 2002, and Fiscal
Year 2001, respectively. The Company leases a portion of its corporate
headquarters and has recorded rental income in the amounts of $0.2 million for
each of fiscal 2003 and 2002.

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##### Table of Contents





|(9) |  | LONG-TERM DEBT
|--- |  | --------------

As of April 27, 2003, the Companys long-term debt was comprised of the
following items (amounts in thousands):

|                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |             |        |         |  |   |       | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | ------ | ------- |  | - | ----- | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Non-current |        | Current
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Portion     |        | Portion
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |             |        |        
|Secured note due Finova Capital Corporation
bearing interest at 9%. Monthly payments of
$274 are based on a 11-year amortization with
a balloon payment due after eight years in October
2010. Note is secured by various inventory,
trademarks, property and equipment.                                                                                                                                                                                    |  | $           | 20,909 |         |  | $ | 1,334 | 
|Secured note due Finova Capital Corporation
bearing interest at 5%. Monthly payments of
$65 are due through October 2010. Note
is secured by various property and equipment.                                                                                                                                                                                                                                                                                |  |             | 4,309  |         |  |   | 547   | 
|Secured notes due U. S. Mortgage LLC primarily
bearing interest at LIBOR plus 1.75%. Monthly
payments of approximately $12 are due through
February, 2004. On March 1, 2004, a balloon
payment of $1,412 will become due on one of
the notes. See discussion below regarding the
Companys intention to refinance this note.
Monthly payments of approximately $13 are
due through 2010 on the second note. Notes
are collateralized by certain properties. |  |             | 855    |         |  |   | 1,630 | 
|Unsecured note due various entities affiliated with
CNL bearing interest at 5%. Monthly payments of
$58 are due through October 2007.                                                                                                                                                                                                                                                                                                                       |  |             | 1,925  |         |  |   | 568   | 
|Unsecured note due Corsair Special Situations Fund
(a member of the Companys Board of Directors is
affiliated with the Corsair Special Situations Fund)
bearing interest at 5%. Monthly payments of $104
are due through October 2007.                                                                                                                                                                                                                     |  |             | 3,998  |         |  |   | 1,020 | 
|Other unsecured notes due various parties
bearing interest at 5%. Monthly payments of
$56 are due through October 2010.                                                                                                                                                                                                                                                                                                                                     |  |             | 1,947  |         |  |   | 517   | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |             |        |         |  |   |       | 
|Total long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | $           | 33,943 |         |  | $ | 5,616 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |             |        |         |  |   |       | 

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The carrying amount of property and equipment and assets held for sale
used as collateral was approximately $60.8 million and $36.1 million at April
27, 2003 and April 28, 2002, respectively.

On the Petition Date, the Company stopped accruing interest on all
unsecured pre-petition debt in accordance with SOP 90-7. Contractual interest
expense not accrued or recorded on certain pre-petition debt totaled $0.9
million.

The debt
agreements resulting from the Confirmed Plan of Reorganization may
require prepayments of principal to the extent the Company generates
excess cash flow from operations, as defined in the agreements.

In June 2003, the Company entered into a non-binding agreement relating to
the refinance of the mortgage on its corporate headquarters. The agreement is
subject to satisfactory completion of an appraisal and environmental study and
other conditions precedent to closing. The Companys current mortgage requires
a $1.4 million balloon payment in March 2004. Such balloon payment will
continue to be reflected in the Companys Consolidated Balance Sheet as a
current liability until the refinance of the existing mortgage is executed.
There are no assurances that this agreement will be executed and failure to
execute the agreement would require the Company to identify alternative means
of funding the balloon payment.



|(10) |  | LIABILITIES SUBJECT TO COMPROMISE
|---- |  | ---------------------------------

Under bankruptcy law, actions by creditors to collect indebtedness owed
prior to the Petition Date and/or prior to the Relief Date are stayed and
certain other pre-petition and Gap (January 18, 2002 through April 16, 2002,
which is the period of time between the petition date and the relief date)
contractual obligations may not be enforced against Roadhouse Grill. The
Company received approval from the Court to pay certain pre-petition and Gap
liabilities including employee salaries and wages, benefits, and other employee
obligations. Liabilities as of April 28, 2002 which were incurred Pre-petition
or during the Gap period have been classified as liabilities subject to
compromise.

The following table summarizes the components of the liabilities included
in the line Pre-Petition Liabilities Subject to Compromise in the Consolidated
Balance Sheet as of April 28, 2002 (dollars in thousands):

|                              |  |   |        | 
|----------------------------- |  | - | ------ | 
|Accounts payable              |  | $ | 3,801  | 
|Accrued expenses              |  |   | 5,043  | 
|Accrued restructuring charges |  |   | 2,626  | 
|Note payable to shareholder   |  |   | 1,500  | 
|Short term notes payable      |  |   | 4,785  | 
|Long term debt                |  |   | 33,092 | 
|Capital lease debt            |  |   | 3,910  | 
|                              |  |   |        | 
|Total                         |  | $ | 54,757 | 
|                              |  |   |        | 

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##### Table of Contents



The following table summarizes the components of the liabilities included
in the line Gap Liabilities Subject to Compromise in the Consolidated Balance
Sheet as of April 28, 2002 (dollars in thousands):

|                 |  |   |       | 
|---------------- |  | - | ----- | 
|Accounts payable |  | $ | 1,840 | 
|Accrued expenses |  |   | 341   | 
|                 |  |   |       | 
|Total            |  | $ | 2,181 | 
|                 |  |   |       | 



|(11) |  | STOCK OPTION PLANS
|---- |  | ------------------

A Stock Option Plan (the Original Plan) was adopted during 1994, and
later amended, for employees of the Company and members of the Board of
Directors who are not employees. Options to purchase 521,099 shares of the
Companys common stock were granted and remained outstanding as of April 28,
2002. In addition, pursuant to an agreement entered into in 1998 with the
President and Chief Executive Officer, the general counsel and a consultant,
options to purchase 300,000 shares of common stock were issued. Also, under
the 1998 Omnibus Stock Option Plan, adopted for employees, key executives and
directors of the Company, options to purchase 324,500 shares of common stock
were granted by the Company. No stock options were granted during fiscal 2003,
2002 or 2001. All outstanding stock options were cancelled as of the effective
date of the Confirmed Plan of Reorganization.

Effective January 28, 2003, the Company adopted the 2003 Stock Option Plan
(the 2003 Plan). The 2003 Plan provides for the Company to grant up to
1,500,000 options to purchase shares of common stock to officers, directors,
key employees and independent contractors and consultants. The 2003 Plan is to
be administered by the Compensation Committee of the Companys Board of
Directors. Options may be granted at an exercise price of not less than $0.36
per share and may have a term of up to ten years. The vesting of options
granted under the 2003 Plan will be determined by the Compensation Committee.
No options have been granted to date under the 2003 Plan.



|(12) |  | SELF-FUNDED INSURANCE
|---- |  | ---------------------

The Company maintains insurance to cover the potential liabilities
associated with a number of the risks that the Company may encounter in its
business operations. These include property and flood coverage, auto, workers
compensation, general liability and umbrella, directors and officers liability,
employers practice liability and crime insurance. Many of the policies, such
as property, flood and directors and officers liability include deductibles
ranging from $100,000 to $250,000 per claim. For many policy years, under
workers compensation, employers practice liability and general liability
coverage, the Company is effectively self-insured up to varying self-insurance
retention limits set on an individual claim basis ranging up to $300,000 per
claim and on an aggregate basis. The

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##### Table of Contents



Company is also self-insured in regards to the medical insurance benefits
that it provides to its managers and certain other employees. These employees
who elect to receive medical insurance benefits are required to contribute a
portion of the cost of providing the insurance benefits. Total insurance costs
incurred by the Company for the fiscal years of 2003, 2002 and 2001 were $6.3
million, $3.5 million and $4.4 million, respectively.



|(13) |  | INCOME TAXES
|---- |  | ------------

Income tax (benefit) expense for fiscal years 2003, 2002, and 2001
consisted of the following (dollars in thousands):

|                                   |         |                |        |                |        |                |    |                |    |   |       |       |       |  
|---------------------------------- | ------- | -------------- | ------ | -------------- | ------ | -------------- | -- | -------------- | -- | - | ----- | ----- | ----- | -
|                                   |         |                |        | April 27, 2003 |        | April 28, 2002 |    | April 29, 2001
|                                   |         |                |        |                |        |                |    |               
|Current:                           |         |                |        |                |        |                |    |                |    |   |       |      
|                                   | Federal |                | $      | (1,327         | )      |                | $  |               |    |   | $     | (595  | )    
|                                   | State   |                |        | 86             |        |                |    | 49             |    |   |       | 19    |      
|                                   |         |                |        |                |        |                |    |                |    |   |       |       |      
|                                   |         | Total current  |        |                | (1,241 | )              |    |                | 49 |   |       |       | (576  | )
|                                   |         |                |        |                |        |                |    |                |    |   |       |       |      
|Deferred:                          |         |                |        |                |        |                |    |                |    |   |       |      
|                                   | Federal |                |        |               |        |                |    |               |    |   |       | 2,238 |      
|                                   | State   |                |        |               |        |                |    |               |    |   |       | 156   |      
|                                   |         |                |        |                |        |                |    |                |    |   |       |       |      
|                                   |         | Total deferred |        |                |       |                |    |                |   |   |       |       | 2,394 |  
|                                   |         |                |        |                |        |                |    |                |    |   |       |       |      
|Total income tax
(benefit) expense |         | $              | (1,241 | )              |        | $              | 49 |                |    | $ | 1,818 |      
|                                   |         |                |        |                |        |                |    |                |    |   |       |       |      

The tax effects of the temporary differences comprising deferred tax
assets and liabilities are as follows (dollars in thousands):

|                         |                                |   |                |       |                |   |         |       | 
|------------------------ | ------------------------------ | - | -------------- | ----- | -------------- | - | ------- | ----- | 
|                         |                                |   | April 27, 2003 |       | April 28, 2002
|                         |                                |   |                |       |               
|Deferred tax assets:     |                                |   |                |       |                |   |         |      
|                         | Tax credit carryforwards       |   | $              | 2,990 |                |   | $       | 2,935 | 
|                         | NOL/Capital loss carryforwards |   |                | 9,125 |                |   |         | 3,950 | 
|                         | Insurance reserves             |   |                | 459   |                |   |         | 263   | 
|                         | Property and equipment         |   |                | 3,819 |                |   |         | 4,547 | 
|                         | Restructuring reserves         |   |                | 210   |                |   |         | 1,755 | 
|                         | Reorganization
expenses        |   |                | 1,026 |                |   |         |      | 
|                         | Deferred
rent                  |   |                | 695   |                |   |         |      | 
|                         | Other                          |   |                | 420   |                |   |         | 808   | 
|Less valuation allowance |                                |   | (18,744        | )     |                |   | (14,258 | )    
|                         |                                |   |                |       |                |   |         |       | 
|Net deferred taxes       |                                | $ |               |       |                | $ |        |      
|                         |                                |   |                |       |                |   |         |       | 

In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of deferred
tax assets is dependent upon the

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##### Table of Contents



generation of future taxable income during the period in which those temporary
differences become deductible. The valuation allowance for deferred tax assets
was $18.7 million and $14.3 million as of April 27, 2003 and April 28, 2002,
respectively. The valuation allowance increased by $4.4 million because
management determined it is more likely than not that the Company will not be
able to utilize its deferred tax assets.

At April 27, 2003, the Company had available net operating loss
carryforwards of approximately $24.0 million which will expire in years
beginning in 2020 through 2023.

The actual income tax expense differs from the expected income tax
effect (computed by applying the U.S. Federal corporate tax rate of 34 percent
to earnings before income taxes) for fiscal years 2003 and 2002 as follows:

|                                      |  |                |        |                |  |  |        |   
|------------------------------------- |  | -------------- | ------ | -------------- |  |  | ------ | --
|                                      |  | April 27, 2003 |        | April 28, 2002
|                                      |  |                |        |               
|Income taxes at statutory rates       |  |                | (34.00 | )%             |  |  | (34.00 | )%
|State and local taxes, net of benefit |  |                | 3.63   | %              |  |  | 3.63   | % 
|FICA tip tax credit                   |  |                | 1.25   | %              |  |  | 1.18   | % 
|Other items                           |  |                | 3.20   | %              |  |  | (5.68  | )%
|Permanent differences                 |  |                | (0.08  | )%             |  |  | 0.26   | % 
|Change in valuation allowance %       |  |                | 35.94  | %              |  |  | 34.76  | % 
|                                      |  |                |        |                |  |  |        |   
|                                      |  |                | 9.94   | %              |  |  | 0.15   | % 
|                                      |  |                |        |                |  |  |        |   



|(14) |  | CONCENTRATIONS OF BUSINESS AND CREDIT RISK
|---- |  | ------------------------------------------

Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist primarily of cash in bank and investment
custodian accounts. At times, the Company maintains cash balances in excess of
insured limits. The custodian of the investment account is a major financial
institution.

The Company currently owns and operates 35 of its 71 restaurants (after
the one restaurant opening subsequent to April 27, 2003) within the state of
Florida. Consequently, the operations of the Company are affected by
fluctuations in the Florida economy and may be affected by adverse weather
conditions within the state. Furthermore, the Company may be affected by
changing conditions within the food service industry.

For fiscal years 2003, 2002 and 2001, two suppliers comprised
approximately 79%, 66% and 33%, respectively, of the Companys purchases.
Purchases from these suppliers were approximately $41.9 million, $47.4 million
and $35.3 million for these years, respectively. One of the Companys
directors was employed by one of these suppliers during these periods. See
Note 17.

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|(15) |  | COMMITMENTS AND CONTINGENCIES
|---- |  | -----------------------------

CLASS ACTION SUIT AND SEC INFORMAL INVESTIGATION

As a result of a review of its accounting records, the Company, in August
2001, restated its previously reported, audited financial statements for the
fiscal years ended April 30, 2000 and April 25, 1999, and the related,
unaudited quarterly financial statements for those periods, as well as the
unaudited financial statements for the quarters ended July 30, 2000, October
29, 2000, and January 28, 2001. In connection with the restatement, the
Company filed amended Form 10-Ks for fiscal years 2000 and 1999, and amended
Form 10-Qs for the fiscal 2001, 2000 and 1999 quarters containing the restated
financial statements.

The restatement occurred because of a determination by the Company that
certain operating expenses were more appropriately attributable to fiscal 2000
and 1999 than later periods. The restatement resulted in a decrease in net
income for fiscal 2000 and 1999, and the related quarterly periods, and an
increase in net income for the quarters ended July 30, 2000, October 29, 2000
and January 28, 2001.

On April 10, 2002, a purported class action complaint alleging violations
of federal securities laws was filed in the United States District Court for
the Southern District of Florida against the Company, the then chairman of the
Companys board of directors, and the Companys president and chief executive
officer. This action (the Action) is styled: Sears v. Roadhouse Grill, Inc,
et al., Case No. 02-CV-60493.

The Action purports to be brought on behalf of all purchasers of the stock
of the Company between August 31, 1998 and August 1, 2001, with certain
exclusions, and appears to be based principally, if not solely, on the fact
that certain financial statements have been restated as described above. The
Company believes there is no merit to the Action. The Company further believes
that, under section 510(b) of the Bankruptcy Code, even if claims of the type
asserted in the Action are allowed, they will be subordinated, in the Chapter
11 Case, to the claims of all creditors of the Company. Accordingly, such
claims are treated under the Confirmed Plan of Reorganization as subordinate to
the claims of all creditors.

As the Company filed for relief under Chapter 11 of the United States
Bankruptcy Code on April 16, 2002, any claims in this Action should have been
filed by the plaintiffs with the Court. If the plaintiffs had filed a claim
with the Court, their claim against the Company would have been subordinated to
the claims of all creditors of the Company. However, no claim against the
Company was filed during the bankruptcy proceedings. Based on discussions with
the Companys legal counsel, the Company believes that the class action suit is
not likely to result in an unfavorable outcome to the Company. The Company
further believes that even if the action brought by the plaintiffs is
successful, the plaintiffs will share only in the distribution of stock in the
reorganized company with the holders of the existing Common Stock.

On July 26, 2002, the plaintiffs filed an amended class action complaint.
The individual defendants filed a motion to dismiss the amended complaint on
September 4, 2002, and the plaintiffs filed an opposition thereto on October 3,
2002. On April 4, 2003, the court heard arguments on the motion to dismiss and
dismissed the amended complaint. The plaintiffs filed a second amended class
action complaint

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##### Table of Contents



on May 5, 2003. The individual defendants filed a motion to dismiss the second
amended class action complaint on June 4, 2003, to which plaintiffs have not
yet responded.

The Company believes that the individual defendants are covered, with
respect to the claims asserted in the Action, by the Companys Directors and
Officers Liability Insurance Policy issued by National Union Fire Insurance Co.
of Pittsburgh, Pa. The policy provides directors and officers liability
coverage and corporate securities coverage. It has aggregate limits of
$5,000,000 and a self-insured retention for securities claims of $250,000.
With respect to the case against the defendants, to the extent permitted by law
the Company intends to indemnify the individual defendants.

On August 3, 2001, the Securities and Exchange Commission (SEC) informed
the Company that it is conducting an informal investigation regarding the
restatement of the Companys audited financial statements for the fiscal years
ended 2000 and 1999 and the first three fiscal quarters of fiscal 2001. The
Company has cooperated fully with the SEC and will continue to do so.

GUARANTOR OF EQUIPMENT LEASES

The Company is the guarantor of equipment leases for three restaurants
that are owned by one of its franchisees, Roadhouse West G.P., two of which are
currently closed. In addition, management understands that other parties have
also guaranteed these obligations. Roadhouse West G.P. is currently in default
of the payment terms of the operating leases. The balance of the remaining
lease payments due was approximately $1.0 million as of April 27, 2003. The
leases are collateralized by the leased equipment and certain leasehold
improvements. Roadhouse West G.P. has recently filed for Chapter 11
Bankruptcy. The Company cannot predict the outcome of these proceedings but
believes that any potential liability will be mitigated by the factors
described above and, accordingly, has provided no reserve for any possible
obligations that may arise relating to these proceedings. The United States
Trustees office has recently filed a motion to convert the Chapter 11
Bankruptcy to Chapter 7 liquidation, citing that no feasible reorganization
plan is being or will be provided.

OTHER AGREEMENTS

The Company is a party to various agreements relating to services
performed at its restaurants. Such agreements are generally for periods of one
year or less and none of these agreements, individually, require payments that
would be material to the Companys financial position or results of operations.

OTHER

The Company is a party to legal proceedings arising in the ordinary course
of business. In the opinion of management and based upon review with legal
counsel, disposition of these matters will not materially affect the Companys
financial condition, results of operations or business.

(16)  EMPLOYEE 401(k) PLAN AND SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

The Company maintains a plan to provide mid-level employees with an
employee savings plan pursuant to Section 401(k) of the Internal Revenue Code
of 1986, as amended (the Code). As an alternative to providing highly
compensated employees with participation in such 401(k) plan, which
F-32Table of Contents

would have required the Company to extend plan benefits to a broader group
of employees, the Company also maintains a Supplemental Executive Retirement
Plan (the SERP).

The 401(k) plan permits participants to contribute, on a pre-tax basis, a
percentage of compensation but not in excess of the maximum level allowed by
the Code. The Company will match 10% of up to the first six percent
contributed by each employee. The cost recognized by the Company for matching
contributions for fiscal year 2003, 2002 and 2001 was less than $0.1 million
each year.

The SERP permits participants to contribute, on a pre-tax basis, a maximum
of 15% of annual compensation. The Company will match 100% up to the first 10%
of annual compensation contributed. The cost recognized by the Company for
matching contributions for fiscal year 2003, 2002 and 2001 was approximately
$0.1 million for each of these years.



|(17) |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|---- |  | ----------------------------------------------

BERJAYA

Berjaya, which beneficially owns approximately 66.5% of the Companys
common stock, directly or indirectly owns Roadhouse Grill Asia Pacific (H.K.)
Limited (Roadhouse Grill Hong Kong) and Roadhouse Grill Asia Pacific (Cayman)
Limited (Roadhouse Grill Asia). In January 1996, the Company entered into a
Master Development Agreement with Roadhouse Grill Hong Kong which provides for
the development and franchising of Roadhouse Grill restaurants in Hong Kong.
Under the agreement, Roadhouse Grill Hong Kong is not required to develop any
specific number of restaurants in Hong Kong, but any restaurants that it
develops are credited against the development obligations of Roadhouse Grill
Asia under Roadhouse Grill Asias Master Development Agreement with the
Company. Roadhouse Grill Hong Kong or its affiliates are not required to pay
any franchise or reservation fee for restaurants that it develops, but they are
responsible for paying or reimbursing approved expenses incurred by the Company
in connection with the opening of each restaurant. In addition, Roadhouse
Grill Hong Kong is required to pay a royalty in connection with the operation
of each of its restaurants based on gross sales. Under certain circumstances,
Roadhouse Grill Hong Kong or the Company may grant franchises to third parties
in Hong Kong. In that event, the Company is entitled to receive 50% of any
franchise and reservation fees (up to $10,000 per restaurant) and 40% of any
royalty fee (based on gross sales payable by the third party franchisee). The
Company did not recognize royalty income from Roadhouse Grill Hong Kong for
fiscal year 2003.

In January 1996, the Company also entered into a Master Development
Agreement with Roadhouse Grill Asia, which covers countries in Asia and the
Pacific Rim (other than Hong Kong), including but not limited to, Australia,
China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore, South Korea,
the Philippines and Thailand. Under the agreement, Roadhouse Grill Asia is
required to open and maintain at least thirty Roadhouse Grill restaurants
during the first ten years of the term of the agreement, with a minimum of two
restaurants to be developed each year. Under certain circumstances, Roadhouse
Grill Asia or the Company may grant franchises to third parties in the
territory. The fee arrangements under the agreement are substantially the same
as those under the agreement between the Company and Roadhouse Grill Hong Kong.

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Roadhouse Grill Asia has not met the development schedule under the Asia
Master Development Agreement. As of the date of this filing, the Company has
taken no action to enforce compliance with the development of new stores
required under the Asia Master Development Agreement and is currently in
discussion with Roadhouse Grill Asia regarding the agreement.

As of April 27, 2003, there were three Roadhouse Grill restaurants
operating in Malaysia under the Master Development Agreement with Roadhouse
Grill Asia. The Company recorded less than $0.1 million in royalty income from
those restaurants during each of the fiscal years 2003, 2002 and 2001. Royalty
income is currently being offset against interest that the Company owes to
Berjaya. This offset of royalty income will continue until the royalty
receivable exceeds the amount due Berjaya, which approximates $129,000 as of
April 27, 2003. Once the royalty receivable exceeds the payable to Berjaya,
the Company expects to begin collecting the earned royalty fees.

On February 14, 2001, Berjaya loaned the Company $1.5 million. The loan
was evidenced by a promissory note bearing interest at 10% per annum, was
payable by the Company on demand at any time after August 14, 2001, and was
collateralized by intellectual property and certain unencumbered real and
personal property. Pursuant to the Companys Confirmed Plan of Reorganization,
in September 2002, Berjaya received in full satisfaction of the $1.5 million
loan, 4,166,667 shares of common stock at the issue price of $0.36 per share,
representing 14.26% of the outstanding common stock in the reorganized Company.

Pursuant to the Companys Confirmed Plan of Reorganization, Berjaya and
its affiliate, Prime Gaming Philippines, Inc., invested and paid $3.5 million
and received 9,722,222 shares of common stock at the issue price of $0.36 per
share representing 33.3% of the outstanding common stock in the reorganized
Company.

THE CREMONINI GROUP

On July 6, 2000, the Company entered into a joint venture agreement with
the Cremonini Group, a publicly-traded Italian conglomerate, specializing in
the food service industry in Europe. Under the original joint venture
agreement, Cremonini Group is required to open and operate at least 60
Roadhouse Grill restaurants in Italy, France, Spain, Great Britain and other
principal European countries. The Company is not required to make any capital
outlay in connection with the joint venture. In accordance with the terms of
the joint venture agreement, the Company owns a 1.5% equity interest in the
joint venture and has an option to purchase up to an additional 8.5% equity
interest in the joint venture. In addition, the Company is entitled to royalty
fees based on gross sales. The Company opened its first joint venture
Roadhouse Grill restaurant in Milan, Italy in November 2001, and it currently
operates four restaurant locations in Italy, including one which was
opened subsequent to April 27, 2003.

By letter dated June 20, 2002, Cremonini notified the Company that it was
immediately suspending the performance of its obligations under the joint
venture agreement and ancillary agreements. The Company believes that the
original joint venture agreement remains in effect and is currently in
discussions with the Cremonini Group regarding the original agreement. No
assurances can be made as to the possible outcome of these discussions.
However, if the Company cannot reach an agreement with Cremonini, the Company
will attempt to make arrangements with one or more other candidates to develop
Roadhouse Grill restaurants in Europe. There can be no assurance that the
Company will be able to make

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such arrangements. Further, if arrangements can be made, the terms may
differ substantially from the terms of the joint venture with Cremonini.

OTHER

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

Ronald J. Buck, a director of the Company, is co-founder and Managing
Principal of Corsair Partners, LLC and the investment manager of Corsair
Special Situations Fund, L.P., both of which are investment firms specializing
in investing in distressed and illiquid securities. Corsair Special Situations
Fund, L.P. is the holder of a note from the Company in the amount of $5.0
million payable in monthly installments of $0.1 million, with interest at the
rate of 5% per annum, through October 2007.

Nathan D. Benn, a director of the Company, is currently the Director and
Chief Financial Officer of the Florida Division of Buckhead Beef, which has a
contract with the Company to supply beef to the Companys food purveyor for
resale to the Companys restaurants.



|(18) |  | NET LOSS PER COMMON SHARE (EPS)
|---- |  | ---------------------------------

Basic net earnings per share equals net earnings divided by the weighted
average shares outstanding during the year. The computation of diluted net
earnings per share includes dilutive common stock equivalents in the weighted
average shares outstanding. The reconciliation between the computations is as
follows (dollars in thousands, except per share data):

|                                          |  |                                      |         |        |  |        |            |  |  |   |       |  
|----------------------------------------- |  | ------------------------------------ | ------- | ------ |  | ------ | ---------- |  |  | - | ----- | -
|                                          |  | Fifty-two Weeks Ended April 27, 2003
|                                          |  |                                     
|                                          |  | Net Loss                             |         | Shares |  | Amount
|                                          |  |                                      |         |        |  |       
|BASIC EPS                                 |  |                                      |         |        |  |        |            |  |  |   |       |  
|Net loss available
to common shareholders |  | $                                    | (11,243 | )      |  |        | 20,000,744 |  |  | $ | (0.56 | )
|EFFECT OF DILUTIVE SECURITIES             |  |                                      |         |        |  |        |            |  |  |   |       |  
|Stock options                             |  |                                      |        |        |  |        |           |  |  |   |      |  
|                                          |  |                                      |         |        |  |        |            |  |  |   |       |  
|DILUTED EPS                               |  | $                                    | (11,243 | )      |  |        | 20,000,744 |  |  | $ | (0.56 | )
|                                          |  |                                      |         |        |  |        |            |  |  |   |       |  

Options to purchase 502,633 shares of common stock at a weighted average
exercise price of $4.54 per share were outstanding during Fiscal Year 2003
until such options were cancelled pursuant to the

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Confirmed Plan of
Reorganization, but were not included in the computation of diluted EPS because
the options exercise price was greater than the average market price of the
common shares.

|                                          |  |                                      |         |        |  |        |           |  |  |   |       |  
|----------------------------------------- |  | ------------------------------------ | ------- | ------ |  | ------ | --------- |  |  | - | ----- | -
|                                          |  | Fifty-two Weeks Ended April 28, 2002
|                                          |  |                                     
|                                          |  | Net Loss                             |         | Shares |  | Amount
|                                          |  |                                      |         |        |  |       
|BASIC EPS                                 |  |                                      |         |        |  |        |           |  |  |   |       |  
|Net loss available
to common shareholders |  | $                                    | (21,443 | )      |  |        | 9,708,741 |  |  | $ | (2.21 | )
|EFFECT OF DILUTIVE SECURITIES             |  |                                      |         |        |  |        |           |  |  |   |       |  
|Stock options                             |  |                                      |        |        |  |        |          |  |  |   |      |  
|                                          |  |                                      |         |        |  |        |           |  |  |   |       |  
|DILUTED EPS                               |  | $                                    | (21,443 | )      |  |        | 9,708,741 |  |  | $ | (2.21 | )
|                                          |  |                                      |         |        |  |        |           |  |  |   |       |  

Options to purchase 521,099 shares of common stock at a weighted average
exercise price of $4.61 per share were outstanding during Fiscal Year 2002, but
were not included in the computation of diluted EPS because the options
exercise price was greater than the average market price of the common shares.

|                                          |  |                                      |         |        |  |        |           |  |  |   |       |  
|----------------------------------------- |  | ------------------------------------ | ------- | ------ |  | ------ | --------- |  |  | - | ----- | -
|                                          |  | Fifty-two Weeks Ended April 29, 2001
|                                          |  |                                     
|                                          |  | Net Loss                             |         | Shares |  | Amount
|                                          |  |                                      |         |        |  |       
|BASIC EPS                                 |  |                                      |         |        |  |        |           |  |  |   |       |  
|Net loss available
to common shareholders |  | $                                    | (15,856 | )      |  |        | 9,708,741 |  |  | $ | (1.63 | )
|EFFECT OF DILUTIVE SECURITIES             |  |                                      |         |        |  |        |           |  |  |   |       |  
|Stock options                             |  |                                      |        |        |  |        |          |  |  |   |      |  
|                                          |  |                                      |         |        |  |        |           |  |  |   |       |  
|DILUTED EPS                               |  | $                                    | (15,856 | )      |  |        | 9,708,741 |  |  | $ | (1.63 | )
|                                          |  |                                      |         |        |  |        |           |  |  |   |       |  

Options to purchase 680,896 shares of common stock at a weighted average
exercise price of $5.04 per share were outstanding during Fiscal Year 2001, but
were not included in the computation of diluted EPS because the options
exercise price was greater than the average market price of the common shares.

F-36



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##### Table of Contents





|(19) |  | QUARTERLY FINANCIAL DATA
|---- |  | ------------------------

The following is a summary of the unaudited quarterly results of
operations for Fiscal Year 2003 and Fiscal Year 2002 (dollars in thousands,
except per share data):

|      |                                                                                                                                                                              |  |     |        |     |  |     |        |     |  |       |        |   |  |   |        |   |  |   |         |   
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --- | ------ | --- |  | --- | ------ | --- |  | ----- | ------ | - |  | - | ------ | - |  | - | ------- | --
|      |                                                                                                                                                                              |  | 1ST |        | 2ND |  | 3RD |        | 4TH |  | TOTAL
|      |                                                                                                                                                                              |  | QTR |        | QTR |  | QTR |        | QTR |  | YEAR 
|      |                                                                                                                                                                              |  |     |        |     |  |     |        |     |  |      
|2003: |                                                                                                                                                                              |  |     |        |     |  |     |        |     |  |       |        |   |  |   |        |   |  |   |        
|      | Total revenues                                                                                                                                                               |  | $   | 35,939 |     |  | $   | 33,305 |     |  | $     | 33,887 |   |  | $ | 37,793 |   |  | $ | 140,924 |   
|      | Operating loss                                                                                                                                                               |  |     | (1,910 | )   |  |     | (7,308 | )   |  |       | (973   | ) |  |   | (1,917 | ) |  |   | (12,108 | ) 
|      | Net loss                                                                                                                                                                     |  |     | (2,120 | )   |  |     | (5,793 | )   |  |       | (509   | ) |  |   | (2,821 | ) |  |   | (11,243 | ) 
|      | Basic net loss
per common share                                                                                                                                              |  |     | (0.22  | )   |  |     | (0.49  | )   |  |       | (0.02  | ) |  |   | (0.10  | ) |  |   | (0.56   | )*
|      | Diluted net loss
per common share                                                                                                                                            |  |     | (0.22  | )   |  |     | (0.49  | )   |  |       | (0.02  | ) |  |   | (0.10  | ) |  |   | (0.56   | )*
|     
|     | The quarterly loss per share data does not tie to the annual data due to the issuance of
new shares on October 18, 2002 as a result of the Confirmed Plan of Reorganization.
|     
|2002: |                                                                                                                                                                              |  |     |        |     |  |     |        |     |  |       |        |   |  |   |        |   |  |   |        
|      | Total revenues                                                                                                                                                               |  | $   | 43,230 |     |  | $   | 39,388 |     |  | $     | 36,477 |   |  | $ | 39,887 |   |  | $ | 158,982 |   
|      | Operating loss                                                                                                                                                               |  |     | (1,118 | )   |  |     | (7,661 | )   |  |       | (502   | ) |  |   | (8,243 | ) |  |   | (17,524 | ) 
|      | Net loss                                                                                                                                                                     |  |     | (2,194 | )   |  |     | (8,976 | )   |  |       | (1,644 | ) |  |   | (8,629 | ) |  |   | (21,443 | ) 
|      | Basic net loss
per common share                                                                                                                                              |  |     | (0.23  | )   |  |     | (0.92  | )   |  |       | (0.17  | ) |  |   | (0.89  | ) |  |   | (2.21   | ) 
|      | Diluted net loss
per common share                                                                                                                                            |  |     | (0.23  | )   |  |     | (0.92  | )   |  |       | (0.17  | ) |  |   | (0.89  | ) |  |   | (2.21   | ) 



|(20) |  | SUBSEQUENT EVENTS
|---- |  | -----------------

In June 2003, the Company entered into an agreement with a loyalty and
rewards company (the Rewards Company) involving the discounted advance sale
of food and beverage credits to be used at its restaurants. The agreement
extends for a two-year period. As part of the agreement, the Company received
$1.5 million in exchange for the credits, which will be recorded in the
Consolidated Balance Sheet as unearned revenue as of the end of the first
quarter of fiscal year 2004. Throughout the term of the agreement, the Company
and the Rewards Company will share in the proceeds of credit card transactions
resulting from use of the credits by members of the Rewards Company. The
Company believes that the members of the Rewards Company are predominantly not
current customers of the Companys restaurants. The Company believes that the
agreement also entitles the Company to receive up to an additional $0.8 million
from advance sales of additional food and beverage credits during the term of
the agreement subject to the timing of usage of the original credits.

See Note 9 for a discussion of short-term mortgage debt that is expected
to be refinanced.

F-37



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##### Table of Contents






EXHIBIT INDEX

|            |  |                                                                                                           
|----------- |  | ----------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                               
|            |  |                                                                                                           
|3.1         |  | Amended and Restated
Articles of Incorporation of the Company                                             
|            |  |                                                                                                           
|10.21       |  | Roadhouse Grill,
Inc. 2003 Stock Option Plan                                                              
|            |  |                                                                                                           
|99.1        |  | Certification of Chief Executive Officer and Chief Financial
Officer under Section 302 of Sarbanes  Oxley
|            |  |                                                                                                           
|99.2        |  | Certification of Chief Executive Officer and Chief Financial
Officer under Section 906 of Sarbanes  Oxley