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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    
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|For the Fiscal Year Ended April 28, 2002
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|                                        
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|OR                                      
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|o                                        |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-28930

ROADHOUSE GRILL, INC.

(Exact Name of Registrant as Specified in its Charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Florida                                                        |  | 65-0367604                          
|(State or Other Jurisdiction of
Incorporation or Organization) |  | (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 $.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  o  No  x

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.    x

The aggregate market value of the voting common stock held by
non-affiliates of the registrant as of September 24, 2002 (based upon the last
reported sale price of the registrants common stock on the Pink Sheets on
September 23,





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##### Table of Contents



2002), was $1,338,110 (calculated by excluding shares owned beneficially by
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  o

The number of shares of the registrants common stock outstanding as of
September 24, 2002 was 9,708,741.

DOCUMENTS INCORPORATED BY REFERENCE

None.

2



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TABLE OF CONTENTS



|                                                           |                                                                                                         |  |  |  |  |  |  | 
|---------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|                                                           | 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                                                
|PART IV                                                   
|                                                           | ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K                              
|SIGNATURES                                                
|REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS        
|INDEPENDENT AUDITORS REPORT                              
|CONSOLIDATED BALANCE SHEETS                               
|CONSOLIDATED STATEMENTS OF OPERATIONS                     
|CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
|CONSOLIDATED STATEMENTS OF CASH FLOWS                     
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                
|SECOND AMENDED AND RESTATED DISCLOSURE STATEMENT          
|SECOND AMENDED AND RESTATED PLAN OF REORGANIZATION        
|ORDER CONFIRMING CHAPTER 11 PLAN OF REORGANZATION         
|CERTIFICATION OF CEO AND ACTING CFO                       



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##### Table of Contents



ROADHOUSE GRILL, INC.

FORM 10-K
FISCAL YEAR ENDED APRIL 28, 2002

INDEX

|         |  |                                                                                                |  |  |    |      |  | 
|-------- |  | ---------------------------------------------------------------------------------------------- |  |  | -- | ---- |  | 
|         |  |                                                                                                |  |  |    | Page
|         |  |                                                                                                |  |  |    |     
|PART I  
|        
|        
|        
|        
|        
|        
|        
|        
|Item 1.  |  | Business                                                                                       |  |  | 1  |     
|        
|        
|        
|        
|Item 2.  |  | Properties                                                                                     |  |  | 17 |     
|        
|        
|        
|        
|Item 3.  |  | Legal Proceedings                                                                              |  |  | 17 |     
|        
|        
|        
|        
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                            |  |  | 17 |     
|        
|        
|        
|        
|        
|        
|        
|        
|PART II 
|        
|        
|        
|        
|        
|        
|        
|        
|Item 5.  |  | Market for Registrants Common Equity and Related Stockholder
Matters                          |  |  | 17 |     
|        
|        
|        
|        
|Item 6.  |  | Selected Financial Data                                                                        |  |  | 18 |     
|        
|        
|        
|        
|Item 7.  |  | Managements Discussion and Analysis of Financial Condition and
Results of Operations          |  |  | 20 |     
|        
|        
|        
|        
|Item 7A. |  | Quantitative and Qualitative Disclosures about Market Risk                                     |  |  | 28 |     
|        
|        
|        
|        
|Item 8.  |  | Financial Statements and Supplementary Data                                                    |  |  | 28 |     
|        
|        
|        
|        
|Item 9.  |  | Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure           |  |  | 28 |     
|        
|        
|        
|        
|        
|        
|        
|        
|PART III
|        
|        
|        
|        
|        
|        
|        
|        
|Item 10. |  | Directors and Executive Officers of the Registrant                                             |  |  | 28 |     
|        
|        
|        
|        
|Item 11. |  | Executive Compensation                                                                         |  |  | 30 |     
|        
|        
|        
|        
|Item 12. |  | Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters |  |  | 31 |     
|        
|        
|        
|        
|Item 13. |  | Certain Relationships and Related Transactions                                                 |  |  | 32 |     
|        
|        
|        
|        
|        
|        
|        
|        
|PART IV 
|        
|        
|        
|        
|        
|        
|        
|        
|Item 14. |  | Exhibits, Financial Statement Schedules and Reports on Form 8-K                                |  |  | 33 |     

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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 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 Companys ability to manage its debt and comply with the
financial covenants in its debt instruments;                                                                                                                         
|
| |  |  | the Companys ability to maintain financial and accounting
controls, management controls, reporting systems and procedures;                                                                                                       
|
| |  |  | the Companys ability to identify potentially profitable restaurant locations;                                                                                                                                                    
|
| |  |  | 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                                                                                                                                               
|
| |  |  | costs associated with opening, or completing construction on, new restaurants.                                                                                                                                                    

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 loan payments;                                      
| | - |  | -----------------------------------------------------------------------------------------
|
| |  |  | the Companys ability to comply with financial covenants in the future;                  
|
| |  |  | availability of financing;                                                               
|
| |  |  | relisting of the Companys stock by Nasdaq;                                              
|
| |  |  | outcome of the SEC inquiry;                                                              
|
| |  |  | net losses;                                                                              
|
| |  |  | the Companys ability to identify profitable locations and open new restaurants;         
|
| |  |  | 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;                                                     
|
| |  |  | competition from other restaurants;                                                      

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| |  |  | construction delays;                                         
| | - |  | -------------------------------------------------------------
|
| |  |  | increase in interest rates; and                              
|
| |  |  | national, regional and local economic and weather conditions.




ITEM 1.     BUSINESS

PROCEEDINGS UNDER CHAPTER 11 OF THE BANKRUPTCY CODE

On January 18, 2002, 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). The Company had recently experienced significant cash
flow problems primarily resulting from the opening of 31 new restaurants in the
past 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 other major creditors in an effort to effect an
out-of-court restructuring.

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 the opportunity to prepare a Chapter 11 plan
of reorganization.

On April 16, 2002, the Court entered an order for relief and the Company
filed its Chapter 11 plan of reorganization and its disclosure statement in
support of the plan. Subsequent to the entry of the order for relief, the
Company has 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 whether to accept or
reject the plan of reorganization. However, the court would not permit such a
vote until it approved a disclosure statement as containing information
adequate to enable a hypothetical reasonable investor typical of holders of
claims or interests of the relevant classes to make an informed judgment about
the plan of reorganization.

The Company filed several amendments to 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 Disclosure
Statement is attached to this Form 10-K as Exhibit 2.1. 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
2Table of Contents

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. (RAI), 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
(the Modification).

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 is embodied in a term sheet between the Company
and CNL dated August 21, 2002 (the CNL Term Sheet).

The hearing on confirmation of the Plan, as modified by the Modification,
took place on August 21, 2002. At the close of the hearing, the Court
announced that the Plan, as modified by the Modification and the Confirmation
Order (as hereinafter defined) (the Confirmed Plan), 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 Confirmation Order is attached to this report on Form 10-K as
Exhibit 2.3. The Modification and CNL Term Sheet are attached as exhibits to
the Confirmation Order.

The Confirmed Plan is scheduled to become effective on or before September
30, 2002 (the Effective Date). On the Effective Date, the Company is to
receive an infusion of new capital of $5 million in exchange for 13,888,889
shares (47.53%) of new common stock in the reorganized Company (the New Common
Stock). The 13,888,889 shares will be issued in a private placement pursuant
to Section 4(2) of, or Regulation D promulgated under, the Securities Act of
1933, as amended (the Private Placement Securities). The Private Placement
Securities will be issued to Berjaya Group (Cayman) Limited (Berjaya), Prime
Gaming Philippines, Inc. (Prime), Ayman Sabi , or designee (Sabi), and
Stephen C. Saterbo, or designee (Saterbo), as more particularly set forth in
the table immediately below. These parties have placed $5 million in escrow
with the Companys co-bankruptcy counsel, Berger Singerman, P.A.

3



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|         |  |            |           |             |  |                  |     |           |  |  |           |  |  |               |       |  
|-------- |  | ---------- | --------- | ----------- |  | ---------------- | --- | --------- |  |  | --------- |  |  | ------------- | ----- | -
|         |  |            |           |             |  |                  |     |           |  |  |           |  |  | Percentage of
|         |  | Investment |           | Price/Share |  | Number of Shares |     | Ownership
|         |  |            |           |             |  |                  |     |          
|Berjaya  |  | $          | 3 million |             |  | $                | .36 |           |  |  | 8,333,333 |  |  |               | 28.52 | %
|        
|        
|        
|        
|Prime    |  | $          | 500,000   |             |  | $                | .36 |           |  |  | 1,388,889 |  |  |               | 4.75  | %
|        
|        
|        
|        
|Sabi*    |  | $          | 1 million |             |  | $                | .36 |           |  |  | 2,777,778 |  |  |               | 9.51  | %
|        
|        
|        
|        
|Saterbo* |  | $          | 500,000   |             |  | $                | .36 |           |  |  | 1,388,889 |  |  |               | 4.75  | %



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|* |  | or designee
|- |  | -----------

Berjaya is the Companys majority shareholder, representing approximately
62% of the Companys common stock prior to the aforementioned $3.5 million cash
infusion by Berjaya.

Prime is an affiliate of Berjaya. It is 58% owned by Berjaya Group
Berhad, which owns 100% of Berjaya. Prime is incorporated and headquartered in
the Philippines.

Saterbo is a senior vice president, member of the board of directors, and
substantial shareholder of Colorado Boxed Beef Company, a major supplier of the
Company.

Sabi is president, chief executive officer and a director of the Company.

Pursuant to the Confirmed Plan, on the Effective Date, Berjaya will
receive, in full satisfaction of the $1.5 million loan, 4,166,667 shares of New
Common Stock at the rate of $.36 per share, representing 14.26% of the
outstanding common stock in the reorganized Company.

Under the Confirmed Plan, on the Effective Date, the 9,708,741 shares of
common stock in the Company currently outstanding (the Old Common Stock), and
any rights, options, warrants, contingent warrants, subscriptions or other
agreements and contractual rights to acquire or obtain an interest in the
shares of the Company, will be cancelled. The Confirmed Plan provides for each
holder of Old Common Stock to receive, in respect of its shares of Old Common
Stock, its ratable share of 11,175,052 shares of New Common Stock, representing
38.24% of the stock in the reorganized Company. The total number of shares of
New Common Stock to be issued under the Confirmed Plan is 29,220,608. Upon the
Effective Date, Berjaya (including its affiliate Prime) will own 20,829,675
shares of common stock representing 71.3% ownership in the Company.

Under the Confirmed Plan, substantial payments will be required to be made
on the Effective Date to pay administrative and other priority claims as well
as amounts required to cure defaults on unexpired leases of real and personal
property and executory contracts being assumed by the Company. The Company
believes that its cash on hand together with the new equity infusion will
provide sufficient funds to make these payments.

As restructured under the Confirmed Plan, the Companys secured and
unsecured debt, as well as assumed leases and executory contracts, will require
substantial monthly payments over extended periods. The reader is referred to
the Confirmed Plan, attached to this report on Form 10-K as Exhibit 2.2, for
the details of repayment of the restructured indebtedness. The

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Companys ability to reorganize successfully will depend on, among other
things, its ability to meet these payment obligations. There is no assurance
that the Company will be able to do so.

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 Statement of Position 90-7 (SOP 90-7),
Financial Reporting by Entities in Reorganization under the Bankruptcy Code.
The ability of the Company to continue operations is predicated upon, among
other things, consummation of the Confirmed Plan, the ability to generate cash
flow from operations and the ability to obtain financing sources sufficient to
satisfy future obligations. Please refer to Risk Factors and Item 7.
Managements Discussion and Analysis of Results of Operations and Financial
Condition for additional information.

GENERAL

The Company operates, franchises and licenses high-quality full-service
casual dining restaurants under the name Roadhouse Grill. The Company is
currently one of the largest operators of the roadhouse-style casual dining
restaurant concept in the United States.

The Company was founded in 1992 and opened its first Roadhouse Grill
restaurant in Pembroke Pines, Florida (the greater Fort Lauderdale area) in
1993. As of April 28, 2002, there were 73 Company owned Roadhouse Grill
restaurants located in Alabama, Arkansas, Florida, Georgia, Louisiana,
Mississippi, New York, North Carolina, Ohio, and South Carolina. Of these, 34
are located in Florida. Four of the restaurants outside Florida were closed
subsequent to April 28, 2002. The Company also has three franchised locations
in Malaysia, one franchised location in Brasilia, Brazil, and three franchised
locations in Las Vegas, Nevada.

On July 6, 2000, the Company entered into a joint venture agreement with
Cremonini S.p.A. (Cremonini Group), a leading publicly traded Italian
conglomerate, specializing in the food service industry in Europe. Under the
joint venture agreement, the 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 by the end of year 2004. In 2001 the
parties extended the deadline by one year until 2005 due to issues surrounding
the consumption of beef in Europe. The Company opened its first joint venture
Roadhouse Grill restaurant in Milan, Italy in November 2001.

THE ROADHOUSE GRILL CONCEPT

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. The restaurants feature daily fresh baked yeast rolls, free peanuts
and certain appetizers as signature items.

5



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##### Table of Contents



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.                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  |  | 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 approximately
$2.99. For adults, each Roadhouse Grill restaurant offers beverages
from its full-service bar, which is separated from the dining area.

MENU

The Roadhouse Grill menu, which was revised and expanded on June 24, 2002,
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. In addition to grilled
selections, the new menu offers a variety of new mixed 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 and homemade yeast rolls. Roadhouse Grill
restaurants are open seven days a week for lunch and dinner and offer full bar
service. Prices
6Table of Contents

range from $5.79 to $17.99. 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.

UNIT ECONOMICS

The Company believes that Company-owned Roadhouse Grill restaurants
produce attractive restaurant-level economics. The 70 Company-owned Roadhouse
Grill restaurants open for the entire 52 weeks in fiscal year 2002 generated
average net sales of approximately $2.1 million, average cash flow (operating
income plus depreciation and amortization) of $221,304, and average operating
income of $38,153. The Companys average cash investment for these 70
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.

EXPANSION

The Company opened 31 new restaurants in the United States in the past 36
months. As a result of the related developmental expenses, the Company did not
generate sufficient cash flow to fund its operations. The Companys long-term
strategy is to expand the Roadhouse Grill concept in a slower and more
controlled manner. The Company plans to open approximately two restaurants per
year over the next five years. The Companys focus in fiscal year 2003 will be
to maximize its return on its investment in its existing restaurants in the
United States and to expand the number of locations internationally.

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.

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##### Table of Contents



SITE SELECTION AND CONSTRUCTION

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 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.

RESTAURANT DESIGN AND LAYOUT

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.

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##### Table of Contents



RESTAURANT LOCATIONS

The following table sets forth the location of Company-owned and
franchised restaurants open as of April 28, 2002.

NUMBER OF
COMPANY-OWNED RESTAURANTS IN OPERATION

|               |  |             |    | 
|-------------- |  | ----------- | -- | 
|               |  | Number of  
|Location       |  | Restaurants
|              
|              
|              
|              
|              
|              
|              
|              
|              
|              
|              
|              
|Florida        |  |             | 34 | 
|              
|              
|              
|              
|Georgia        |  |             | 9  | 
|              
|              
|              
|              
|New York       |  |             | 6  | 
|              
|              
|              
|              
|Louisiana      |  |             | 4  | 
|              
|              
|              
|              
|South Carolina |  |             | 2  | 
|              
|              
|              
|              
|Alabama        |  |             | 2  | 
|              
|              
|              
|              
|Mississippi    |  |             | 3  | 
|              
|              
|              
|              
|Ohio           |  |             | 9  | 
|              
|              
|              
|              
|Arkansas       |  |             | 1  | 
|              
|              
|              
|              
|North Carolina |  |             | 3  | 
|               |  |             |    | 
|              
|              
|              
|              
|Total          |  |             | 73 | 

Note: Subsequent to April 28, 2002, four Company-owned restaurants were
closed. One of these was in Louisiana, one was in Ohio, and two were in North
Carolina.

NUMBER OF
FRANCHISED RESTAURANTS IN OPERATION

|                 |  |             |   | 
|---------------- |  | ----------- | - | 
|                 |  | Number of  
|Location         |  | Restaurants
|                
|                
|                
|                
|                
|                
|                
|                
|                
|                
|                
|                
|Nevada           |  |             | 3 | 
|                
|                
|                
|                
|Malaysia         |  |             | 3 | 
|                
|                
|                
|                
|Brasilia, Brazil |  |             | 1 | 
|                 |  |             |   | 
|Total            |  |             | 7 | 

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##### Table of Contents



NUMBER OF
JOINT VENTURE RESTAURANTS IN OPERATION

|             |  |             |   | 
|------------ |  | ----------- | - | 
|             |  | Number of  
|Location     |  | Restaurants
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|Milan, Italy |  |             | 1 | 
|            
|            
|            
|            
|Total        |  |             | 1 | 

FRANCHISE OPERATIONS

In addition to operating Company-owned restaurants, the Company has seven
franchise locations. The Company currently has four 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), and Brent Empreendimentos e
Alimentacao Ltda. (Roadhouse Grill Brazil). 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 will be actively
seeking multi-unit franchising in the United States in the foreseeable future.

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 currently operates three
Roadhouse Grill restaurants.

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 28, 2002, the receivable from Roadhouse
Operating was approximately $143,000. Due to lack of payment, this amount has
been fully reserved.

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##### Table of Contents



The Company is the guarantor of equipment leases for three restaurants
owned by Roadhouse Operating. Roadhouse Operating 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 28, 2002.
Approximately $250,000 of these payments was in arrears as of April 28, 2002.
The Company is currently in negotiations with the lessors and Roadhouse
Operating to restructure the lease agreements and bring the payments current.
Should these negotiations fail, under the guaranty the Company could be held
liable to make payment to the lessors.

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 filing, the Company has taken no action to
enforce compliance with the development of new restaurants required under the
Roadhouse Operating Master Development Agreement.

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 28, 2002, 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
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
11Table of Contentsterritory. 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 $84,000 in royalty income from
those restaurants during fiscal year 2002. As of April 28, 2002, $168,080 of
the royalty receivable from Roadhouse Grill Asia has been fully reserved due to
lack of payment. The remaining receivable of $86,399 is not reserved, as it
will be offset by interest payable to Berjaya.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.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.JOINT VENTURE OPERATIONSOn 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 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 by the end of year 2004. In 2001, the parties extended the deadline
by one year until 2005 due to issues surrounding the consumption of beef in
Europe. 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.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 it will
be able to come to an amicable resolution of any disagreements with Cremonini.
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
the Companys restaurants in Europe. There can be no assurance that the
Company12Table of Contents

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.

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, advertising and marketing
expense relating to Roadhouse Grill restaurants amounted to approximately 1.6%
of total revenues.

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.

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 65 employees.
The Company currently employs seven directors of operations, each of whom is
responsible for six 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 at designated training
restaurants, 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
13Table of Contents

techniques. 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 which could result in
higher labor costs.

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 dairy and 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 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 2002, the Company purchased
approximately 66% 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
restaurants in a timely manner.

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
14Table of Contentsinformation systems. 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.RESTAURANT INDUSTRY AND COMPETITIONThe 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 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.15Table of ContentsSEASONALITYThe Companys operating results fluctuate seasonally because of its
geographic concentration. Of the 73 restaurants owned and operated by the
Company as of April 28, 2002, and of the 69 restaurants currently owned and
operated, 34 are located in residential 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.GOVERNMENT REGULATIONEach 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 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.Sale 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.16Table of ContentsThe 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.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.EMPLOYEESAt April 28, 2002, the Company employed approximately 4,716 persons, of
whom 4,395 were restaurant employees, 278 were restaurant management and
supervisory personnel, and 43 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 DRESSThe 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, the Cowboy Jim and rocking
chair design and the slogan Good Food and a Smile . . . Thats Roadhouse
Style with the U.S. Patent and Trademark Office. The Company currently has
registered the Roadhouse Grill service mark in Europe and Malaysia and has
been approved for registration in Canada. Roadhouse Grill has certain 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.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 on17Table of Contents

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.

RISK FACTORS

THE COMPANY IS IN THE PROCESS OF EMERGING FROM BANKRUPTCY AND THERE CAN BE NO
ASSURANCE THAT IT CAN REORGANIZE SUCCESSFULLY

The Confirmed Plan is scheduled to become effective on or before September
30, 2002. Under the Confirmed Plan, substantial payments will be required to
be made on the Effective Date to pay administrative and other priority claims
as well as amounts required to cure defaults on unexpired leases of real and
personal property and executory contracts being assumed by the Company. The
amount to be paid by the end of fiscal year 2003 includes approximately $4.3
million principal and $2.2 million interest, subject to certain claims which
are in negotiations subject to the Courts final ruling. The Company believes
that its cash on hand together with the new equity infusion will provide
sufficient funds to make these payments. As restructured under the Confirmed
Plan, the Companys secured and unsecured debt, as well as assumed leases and
executory contracts, will require substantial monthly payments over extended
periods. The Companys ability to reorganize successfully will depend on,
among other things, its ability to meet future payment obligations over the
extended periods. There can be no assurance that the future profits of the
Company will be sufficient to fund these obligations.

THE BANKRUPTCY MAY HAVE CREATED A NEGATIVE IMAGE OF THE COMPANY.

The effect, if any, which the Companys bankruptcy proceedings may have on
its future operations cannot be accurately predicted or quantified. The
Company believes that its bankruptcy and consummation of the Confirmed Plan
will not have a material impact on its relationships with its customers,
employees and 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 71% OF THE COMPANYS OUTSTANDING COMMON STOCK BY ONE
SHAREHOLDER WILL LIMIT OTHER SHAREHOLDERS ABILITY TO INFLUENCE CORPORATE
MATTERS.

At April 28, 2002, Berjaya beneficially owned, directly or indirectly,
approximately 62% of the Companys outstanding common stock. Under the
Confirmed Plan, Berjaya will acquire additional shares, resulting in a total
ownership of approximately 71%. As a result, Berjaya will be 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
18Table of Contentslittle 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S COMMON STOCK HAS BEEN DELISTED, AND INVESTORS MAY FIND IT MORE
DIFFICULT TO SELL THE COMPANYS COMMON STOCK.On April 24, 2002, the Company received notification from The Nasdaq Stock
Market that the Companys common stock would be delisted at the opening of
business on May 2, 2002, unless the Company requested a hearing to appeal the
determination in accordance with Nasdaq rules. Nasdaqs delisting notification
was based on the Companys filing for protection under Chapter 11 of the U.S.
Bankruptcy Code, the Companys failure to meet the independent director and
audit committee requirements for continued listing pursuant to Marketplace
Rules 4350(c) and 4350(d)(2), and The Nasdaq Stock Markets concerns about the
Companys ability to sustain compliance with all requirements for continued
listing on The Nasdaq Stock Market. The Company did not request a hearing to
appeal the determination. Accordingly, its common stock was delisted at the
opening of business on May 2, 2002. 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.THE SEC IS CONDUCTING AN INFORMAL INVESTIGATION OF THE COMPANY AND THE OUTCOME
OF THE INVESTIGATION CANNOT BE DETERMINED.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 filing.19Table of ContentsTHE COMPANY HAS EXPERIENCED RECENT LOSSES AND CASH FLOW PROBLEMS.The Company opened 31 new restaurants in the past 36 months. As a result
of the related development expenses, the Company did not generate sufficient
cash flow to fund its operations. In addition, the Company has also
experienced recent losses and cash flow problems. There can be no assurance
that the Company will be able to achieve and sustain sufficient positive cash
flow to support operations or expansion.SUBSTANTIALLY ALL OF THE COMPANYS ASSETS ARE PLEDGED.Under the Confirmed Plan, substantially all of the Companys assets will
be pledged as security for loans.THE COMPANY MAY NOT BE ABLE TO CONTINUE TO SUCCESSFULLY EXPAND ITS RESTAURANT
OPERATIONS.The Company expects to open two restaurants in fiscal year 2003. 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 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 the expansion of its operations, which could lead to
overall lower revenues and adversely effect the Companys financial results and
prospects. If adequate funds are not available on acceptable terms, the
Company may not be able to fund its expansion or respond to competitive
pressures.The Company may not be able to open its planned new operations on a timely
basis, if ever, and, if opened, these restaurants may not be operated
profitably. The Company expects to experience delays in restaurant openings
from time to time. Delays or failures in opening20Table of Contents

planned new restaurants could have an adverse effect on the Companys
business, financial condition, results of operations or cash flows.

THE COMPANYS UNFAMILIARITY WITH NEW MARKETS MAY PRESENT RISKS WHICH COULD HAVE
A MATERIAL ADVERSE EFFECT ON ITS FUTURE GROWTH AND PROFITABILITY.

The Companys growth strategy depends on its ability to successfully
expand its Roadhouse Grill brand into new markets in which it has no operating
experience. Historically, new restaurants opened in expanded markets generally
take about 15 to 36 months to achieve expected Company-wide targeted levels of
performance. This is due to higher operating costs caused by temporary
inefficiencies typically associated with expanding into new regions and opening
new restaurants, such as lack of market awareness and acceptance and
unavailability of experienced staff. These new markets may have different
competitive conditions, consumer tastes and discretionary spending patterns
than the Companys existing markets, which may cause the Companys restaurants
in these new markets to be less successful than the Companys restaurants in
its existing markets. As a result, the Companys continued expansion may
result in an increase in operating costs. There can be no assurance that
restaurants in new markets will be successful.

IMPLEMENTING THE COMPANYS LONG TERM GROWTH STRATEGY MAY STRAIN ITS MANAGEMENT
RESOURCES AND NEGATIVELY IMPACT ITS COMPETITIVE POSITION.

The Companys growth strategy may strain its management, financial and
other resources. The Company must maintain a high level of quality and service
at its existing and future restaurants, continue to enhance its operational,
financial and management capabilities and locate, hire, train and retain
experienced and dedicated operating personnel, particularly managers and chefs.
The Company may not be able to effectively manage these and other factors
necessary to permit it to achieve its expansion objectives, and any failure to
do so could negatively impact its competitive position.

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 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 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
21Table of Contents

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.

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 73 restaurants owned and operated by the
Company as of April 28, 2002, 34 are located in residential areas in Florida.
Four of the restaurants outside Florida were closed subsequent to April 28,
2002.

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. 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;                                                                                           
|
| |  |  | 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.                                          

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
22Table of Contents

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, labor and, in many cases, customers.

The Company believes that the full-service casual dining segment is likely
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;             

23



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##### Table of Contents





| |  |  | Discretionary spending priorities;                     
| | - |  | -------------------------------------------------------
|
| |  |  | Weather conditions;                                    
|
| |  |  | 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. In the recent past,
certain types of steak products and seafood have experienced fluctuations in
supply availability. 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 materially 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 its 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 such
24Table of Contents

restaurants. The Companys inability to recruit and retain such 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 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 which could result in higher labor costs.

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

The Company believes that the development of its business has been, and
will continue to be, dependent on Ayman Sabi, its Chief Executive Officer, and
other key executive employees. The loss of Mr. Sabis services 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 in the event
of his 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.

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.

25



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##### Table of Contents



The Companys facilities are licensed and subject to regulation under
state and local fire, health and safety codes. The development and
construction of additional 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 applications to state authorities and, in certain
locations, county and municipal authorities for a license and permit to sell
alcoholic beverages. Typically, licenses must be renewed annually and may be
revoked or suspended for cause at any time. Alcoholic beverage control
regulations relate to numerous aspects of the daily operations of the
restaurants, including minimum age of guests and employees, hours of operation,
advertising, wholesale purchasing, inventory control and handling, storage and
dispensing of alcoholic beverages. If the Company fails to comply with
federal, state or local regulations its licenses may be revoked and it may be
forced to terminate the sale of alcoholic beverages at one or more of its
restaurants.

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.

The Company is also subject in certain states 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.

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.

26



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##### Table of Contents



THE COMPANYS BOARD OF DIRECTORS MAY ISSUE SHARES OF PREFERRED STOCK WITHOUT
SHAREHOLDER APPROVAL.

The Companys articles of incorporation authorizes the issuance of up to
10,000,000 shares of preferred stock with rights and preferences that may be
determined from time to time by the Companys Board of Directors. Such
preferred stock could adversely affect the voting power or other rights of the
holders of outstanding shares of the Companys Common Stock. In addition, the
issuance of shares of preferred stock may have the effect of rendering more
difficult, or discouraging, an acquisition or change in control of the Company.
Although the Company does not have any current plans to issue any series or
shares of preferred stock, it may do so in the future.




ITEM 2. PROPERTIES

As of April 28, 2002, all but 16 of the Companys restaurants were located
in leased space. However, three of those restaurants were closed as a result
of the Companys restructuring. Initial lease expirations range from five to
20 years, with the majority of the leases providing renewal options extending
the lease term. All of the Companys leases provide for a minimum annual rent,
and several leases call 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. 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 30,000 square foot office building in Pompano Beach,
Florida. The Company relocated its corporate headquarters to this facility in
October 1999. The Company occupies approximately 17,000 square feet of the new
facility and has leased the remaining 13,000 square feet for a three-year
period ending in January 2004.




ITEM 3. LEGAL PROCEEDINGS

BANKRUPTCY



| |                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------
| | Please refer to ITEM 1, BUSINESS, PROCEEDINGS UNDER CHAPTER 11 OF
THE BANKRUPTCY CODE, for a complete discussion of bankruptcy proceedings.

CLASS ACTION SUIT



| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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

27



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##### Table of Contents





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 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
Reorganization Plan as subordinate to the claims of all creditors. To
the extent, if any, such claims are allowed, they will share in the
distribution of stock in Reorganized Roadhouse Grill with the Holders of
the Old Common Stock, and will not dilute the recoveries of Roadhouse
Grills creditors. The Company believes there is no merit to the Action.
|
| | 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 United States
Bankruptcy Court for the Southern District of Florida (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. Therefore, based on discussions with counsel, it
is the Companys expectation that the case against the Company will be
dismissed. However, this would not carry over to the individuals who
are named as defendants. Should the Action brought by the plaintiffs not be dismissed,
the plaintiffs will share in the distribution of stock in Reorganized
Roadhouse Grill with the Holders of the Old Common Stock, and will not
dilute the recoveries of Roadhouse Grills creditors.             
|
| | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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| |                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------
| | claims of $250,000. With respect to the case against the
defendants, the Company will indemnify the individual defendants.

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, in the opinion of the
Company, based on review by legal counsel, any resulting liability will
not 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

There were no maters submitted for a vote of security holders during the
fourth quarter of fiscal year 2002.




PART II




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

MARKET INFORMATION

As of April 28, 2002, the Companys authorized and issued common equity
consisted of 9,708,741 shares of common stock, par value $.03 per share. The
Companys common stock has traded on the Pink Sheets under the Symbol GRLLQ
since May 2, 2002. Prior to that, the Companys common stock traded under the
symbol GRLL on the Nasdaq National Market from the Companys initial public
offering on November 26, 1996 to May 2, 2002 when the stock was delisted.

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:

|               |  |         |      |        |  |  |      | 
|-------------- |  | ------- | ---- | ------ |  |  | ---- | 
|               |  | HIGH($) |      | LOW($)
|               |  |         |      |       
|FISCAL 2001    |  |         |      |        |  |  |      | 
|              
|              
|              
|              
|First Quarter  |  |         | 6.19 |        |  |  | 4.00 | 
|              
|              
|              
|              
|Second Quarter |  |         | 5.44 |        |  |  | 2.44 | 
|              
|              
|              
|              
|Third Quarter  |  |         | 2.84 |        |  |  | 1.09 | 
|              
|              
|              
|              
|Fourth Quarter |  |         | 1.75 |        |  |  | 1.22 | 
|              
|              
|              
|              

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|               |  |  |      |  |  |  |      | 
|-------------- |  |  | ---- |  |  |  | ---- | 
|              
|              
|              
|              
|FISCAL 2002    |  |  |      |  |  |  |      | 
|First Quarter  |  |  | 1.72 |  |  |  | 1.10 | 
|              
|              
|              
|              
|Second Quarter |  |  | 1.35 |  |  |  | 0.25 | 
|              
|              
|              
|              
|Third Quarter  |  |  | 0.55 |  |  |  | 0.28 | 
|              
|              
|              
|              
|Fourth Quarter |  |  | 0.35 |  |  |  | 0.24 | 

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 to support operations
and finance expansion. See Managements Discussion and Analysis of Financial
Condition and Results of Operations  Liquidity and Capital Resources. Future
declaration and payment of dividends, if any, will be determined in light of
then current conditions, including the Companys earnings, operations, capital
requirements, financial condition, and other factors deemed relevant by the
Board of Directors.

SHAREHOLDERS

As
of September 24, 2002, there were 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.




ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth for the periods and the 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.

30



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|                                                                                          |                                |                                                                                  |                          |             |   |             |          |             |   |             |         |         |      |         |         |        |   |         |         |        |             |        | 
|----------------------------------------------------------------------------------------- | ------------------------------ | -------------------------------------------------------------------------------- | ------------------------ | ----------- | - | ----------- | -------- | ----------- | - | ----------- | ------- | ------- | ---- | ------- | ------- | ------ | - | ------- | ------- | ------ | ----------- | ------ | 
|                                                                                          |                                |                                                                                  |                          |             |   |             |          |             |   |             |         |         |      |         |         |        |   |         |         |        | (Unaudited)
|STATEMENT OF OPERATIONS DATA:                                                             |                                | Fiscal 2002                                                                      |                          | Fiscal 2001 |   | Fiscal 2000 |          | Fiscal 1999 |   | Fiscal 1998
|                                                                                          |                                |                                                                                  |                          |             |   |             |          |             |   |            
|($ IN THOUSANDS, EXCEPT SHARE DATA)                                                       |                                |                                                                                  |                          |             |   |             |          |             |   |             |         |         |      |         |         |        |   |         |         |       
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Total revenues                                                                            |                                | $                                                                                | 158,982                  |             |   | $           | 168,055  |             |   | $           | 148,897 |         |      | $       | 121,067 |        |   | $       | 100,508 |       
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Cost of Restaurant Sales:                                                                 |                                |                                                                                  |                          |             |   |             |          |             |   |             |         |         |      |         |         |        |   |         |         |       
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Food and beverage              |                                                                                  |                          | 55,066      |   |             |          | 59,112      |   |             |         | 50,268  |      |         |         | 40,606 |   |         |         | 34,002 |            
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Labor and benefits             |                                                                                  |                          | 51,817      |   |             |          | 54,059      |   |             |         | 43,512  |      |         |         | 33,969 |   |         |         | 29,232 |            
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Occupancy and other            |                                                                                  |                          | 37,580      |   |             |          | 39,269      |   |             |         | 30,067  |      |         |         | 23,089 |   |         |         | 19,001 |            
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Pre-opening expenses           |                                                                                  |                          | 477         |   |             |          | 2,481       |   |             |         | 2,387   |      |         |         | 1,318  |   |         |         | 1,822  |            
|                                                                                          |                                |                                                                                  |                          |             |   |             |          |             |   |             |         |         |      |         |         |        |   |         |         |        |             |        | 
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Total cost of restaurant
sales |                                                                                  |                          | 144,940     |   |             |          | 154,921     |   |             |         | 126,234 |      |         |         | 98,982 |   |         |         | 84,057 |            
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Depreciation and amortization                                                             |                                |                                                                                  | 8,991                    |             |   |             | 10,297   |             |   |             | 8,560   |         |      |         | 7,351   |        |   |         | 5,672   |       
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|General and administrative
expenses                                                       |                                |                                                                                  | 9,106                    |             |   |             | 10,954   |             |   |             | 8,241   |         |      |         | 6,766   |        |   |         | 6,645   |       
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Impairment of long-lived
assets                                                           |                                |                                                                                  | 7,507                    |             |   |             | 3,066    |             |   |             |        |         |      |         |        |        |   |         | 1,120   |       
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Restructuring Charges                                                                     |                                |                                                                                  | 5,086                    |             |   |             |         |             |   |             |        |         |      |         |        |        |   |         |        |       
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Reorganization Items                                                                      |                                |                                                                                  | 876                      |             |   |             |         |             |   |             |        |         |      |         |        |        |   |         |        |       
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          |                                |                                                                                  | Total operating expenses |             |   | 176,506     |          |             |   | 179,238     |         |         |      | 143,035 |         |        |   | 113,099 |         |        |             | 97,494 | 
|                                                                                          |                                |                                                                                  |                          |             |   |             |          |             |   |             |         |         |      |         |         |        |   |         |         |        |             |        | 
|Operating (loss) income                                                                   |                                |                                                                                  | (17,524                  | )           |   |             | (11,183  | )           |   |             | 5,862   |         |      |         | 7,968   |        |   |         | 3,014   |       
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Other (expense) income:                                                                   |                                |                                                                                  |                          |             |   |             |          |             |   |             |         |         |      |         |         |        |   |         |         |       
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Interest expense, net          |                                                                                  |                          | (3,810      | ) |             |          | (3,655      | ) |             |         | (2,301  | )    |         |         | (2,210 | ) |         |         | (1,924 | )          
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Equity in loss of affiliates   |                                                                                  |                          |            |   |             |          |            |   |             |         |        |      |         |         | (3     | ) |         |         | 90     |            
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Other, net                     |                                                                                  |                          | (60         | ) |             |          | 800         |   |             |         |        |      |         |         |       |   |         |         | (611   | )          
|                                                                                          |                                |                                                                                  |                          |             |   |             |          |             |   |             |         |         |      |         |         |        |   |         |         |        |             |        | 
|                                                                                          | Total other expense            |                                                                                  |                          | (3,870      | ) |             |          | (2,855      | ) |             |         | (2,301  | )    |         |         | (2,213 | ) |         |         | (2,445 | )          
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|(Loss) income before income
taxes and cumulative effect
of change in accounting
principle |                                |                                                                                  | (21,394                  | )           |   |             | (14,038  | )           |   |             | 3,561   |         |      |         | 5,755   |        |   |         | 569     |       
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Income tax expense             |                                                                                  |                          | 49          |   |             |          | 1,818       |   |             |         | 78      |      |         |         | 47     |   |         |         | 216    |            
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|(Loss) income before
cumulative change in
accounting principle                            |                                |                                                                                  | (21,443                  | )           |   |             | (15,856  | )           |   |             | 3,483   |         |      |         | 5,708   |        |   |         | 353     |       
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          |                                | Cumulative effect of
change in accounting
principle (net of tax
benefit of $248) |                          |             |  |             |          |             |  |             |         |         | (877 | )       |         |        |  |         |         |        | --          |       
|                                                                                          |                                |                                                                                  |                          |             |   |             |          |             |   |             |         |         |      |         |         |        |   |         |         |        |             |        | 
|Net (loss) income                                                                         |                                |                                                                                  | ($21,443                 | )           |   |             | ($15,856 | )           |   | $           | 2,606   |         |      | $       | 5,708   |        |   | $       | 353     |       

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|                                                                                   |                                                                           |             |           |             |   |             |           |             |   |             |           |           |   |   |           |           |  |   |           |           |             |  | 
|---------------------------------------------------------------------------------- | ------------------------------------------------------------------------- | ----------- | --------- | ----------- | - | ----------- | --------- | ----------- | - | ----------- | --------- | --------- | - | - | --------- | --------- |  | - | --------- | --------- | ----------- |  | 
|                                                                                   |                                                                           |             |           |             |   |             |           |             |   |             |           |           |   |   |           |           |  |   |           |           | (Unaudited)
|STATEMENT OF OPERATIONS DATA:                                                      |                                                                           | Fiscal 2002 |           | Fiscal 2001 |   | Fiscal 2000 |           | Fiscal 1999 |   | Fiscal 1998
|                                                                                   |                                                                           |             |           |             |   |             |           |             |   |            
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Basic net income (loss) per
common share                                           |                                                                           |             |           |             |   |             |           |             |   |             |           |           |   |   |           |           |  |   |           |          
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Basic income before
cumulative effect of change
in accounting principle   |             |           | ($2.21      | ) |             |           | ($1.63      | ) |             | $         | 0.36      |   |   | $         | 0.60      |  |   | $         | 0.04      |            
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Cumulative effect of change
in accounting principle                       |             |           |            |   |             |           |            |   |             |           | (0.09     | ) |   |           |          |  |   |           |          |            
|                                                                                   |                                                                           |             |           |             |   |             |           |             |   |             |           |           |   |   |           |           |  |   |           |           |             |  | 
|                                                                                   | Basic net income (loss) per
common share:                                 |             |           | ($2.21      | ) |             |           | ($1.63      | ) |             | $         | 0.27      |   |   | $         | 0.60      |  |   | $         | 0.04      |            
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Diluted net income (loss)
per common share:                               |             |           |             |   |             |           |             |   |             |           |           |   |   |           |           |  |   |           |           |            
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Diluted income before
cumulative effect of change
in accounting principle |             |           | ($2.21      | ) |             |           | ($1.63      | ) |             | $         | 0.36      |   |   | $         | 0.59      |  |   | $         | 0.04      |            
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Cumulative effect of change
in accounting principle                       |             |           |            |   |             |           |            |   |             |           | (0.09     | ) |   |           |          |  |   |           |          |            
|                                                                                   |                                                                           |             |           |             |   |             |           |             |   |             |           |           |   |   |           |           |  |   |           |           |             |  | 
|Diluted net income (loss)
per common share                                         |                                                                           |             | ($2.21    | )           |   |             | ($1.63    | )           |   | $           | 0.27      |           |   | $ | 0.59      |           |  | $ | 0.04      |          
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Weighted
average common shares outstanding                                |             |           | 9,708,741   |   |             |           | 9,708,741   |   |             |           | 9,708,741 |   |   |           | 9,536,631 |  |   |           | 9,305,408 |            
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Weighted average common
shares and share equivalents
outstanding assuming
dilution |                                                                           |             | 9,708,741 |             |   |             | 9,708,741 |             |   |             | 9,792,019 |           |   |   | 9,668,469 |           |  |   | 9,315,139 |          

|                                                                       |  |             |        |             |  |             |          |             |  |             |          |   |  |   |         |   |  |             |         |  
|---------------------------------------------------------------------- |  | ----------- | ------ | ----------- |  | ----------- | -------- | ----------- |  | ----------- | -------- | - |  | - | ------- | - |  | ----------- | ------- | -
|                                                                       |  |             |        |             |  |             |          |             |  |             |          |   |  |   |         |   |  | (Unaudited)
|BALANCE SHEET DATA:                                                    |  | Fiscal 2002 |        | Fiscal 2001 |  | Fiscal 2000 |          | Fiscal 1999 |  | Fiscal 1998
|                                                                       |  |             |        |             |  |             |          |             |  |            
|($ IN THOUSANDS, EXCEPT SHARE DATA)                                    |  |             |        |             |  |             |          |             |  |             |          |   |  |   |         |   |  |             |         |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Working capital (deficit) *                                            |  |             | (3,270 | )           |  |             | ($47,803 | )           |  |             | ($17,111 | ) |  |   | ($6,401 | ) |  |             | ($6,020 | )
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Total assets                                                           |  |             | 83,354 |             |  |             | 100,328  |             |  |             | 104,414  |   |  |   | 90,972  |   |  |             | 80,036  |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Liabilities subject to
compromise 
Pre-petition                       |  |             | 54,757 |             |  |             |         |             |  |             |         |   |  |   |        |   |  |             |        |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Liabilities subject to
compromise  GAP                                |  |             | 2,181  |             |  |             |         |             |  |             |         |   |  |   |        |   |  |             |        |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Long-term debt and due to
related parties, including
current portion * |  |             |       |             |  |             | 36,513   |             |  |             | 25,661   |   |  |   | 19,505  |   |  |             | 19,095  |  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Obligations under capital
lease, including current
portion *           |  |             |       |             |  |             | 5,742    |             |  |             | 6,479    |   |  |   | 11,933  |   |  |             | 7,542   |  
|                                                                       |  |             |        |             |  |             |          |             |  |             |          |   |  |   |         |   |  |             |         |  
|Total shareholders equity                                             |  | $           | 15,528 |             |  | $           | 36,971   |             |  | $           | 52,827   |   |  | $ | 50,221  |   |  | $           | 42,998  |  



|* |  | Note, for fiscal year 2002, working capital, long term debt, and current
ratio do not include liabilities classified as subject to compromise.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------

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##### Table of Contents






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 28, 2002,
there were 73 Company owned Roadhouse Grill restaurants located in Alabama,
Arkansas, Florida, Georgia, Louisiana, Mississippi, New York, North Carolina,
Ohio, and South Carolina. Of these, 34 are located in Florida. Four of the
restaurants outside of Florida were closed subsequent to April 28, 2002. The
Company also has three franchised locations in Malaysia, one franchised
location in Brasilia, Brazil, three franchised locations in Las Vegas, Nevada
and one joint venture location in Milan, Italy.

REVENUES

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

In April 1998, the AICPA Accounting Standards Executive Committee issued
Statement of Position 98-5 (SOP 98-5), Reporting on the Costs of Start-Up
Activities. SOP 98-5 defines start-up activities broadly (including
organizational costs) and requires that the cost of start-up activities be
expensed as incurred. SOP 98-5 is effective for fiscal years beginning after
December 15, 1998. In previous years, the Companys accounting policy was to
capitalize pre-opening costs and amortize them over a one-year period.
Pre-opening costs consist of direct costs related to hiring and training the
initial work force and other direct costs associated with opening a new
restaurant. The Company adopted SOP 98-5 during the first quarter of fiscal
year 2000. The effect of initially applying the provisions of SOP 98-5 was
reported as a change in accounting principle at the beginning of the first
quarter of fiscal year 2000. The cumulative effect of the change was $877,000,
net of taxes. Thereafter, all such costs have been expensed as incurred and
are included in pre-opening expenses within the accompanying statements of
operations. During fiscal year 2002, pre-opening costs incurred in connection
with the opening of three Company owned restaurants averaged approximately
$158,900.

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 the average unit volume that has
been the Companys historical experience. 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 as the restaurant matures
or that it will attain average costs.

The average cash investment of the 70 Company-owned Roadhouse Grill
restaurants open the entire 52 weeks in fiscal year 2002 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 13 restaurant
sites owned by the Company was approximately $892,000. The Company has
obtained financing in connection with the acquisition of its owned properties,
which financing generally

33



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##### Table of Contents



has required a down payment of 10% of the purchase price. The average annual
occupancy cost for the restaurant sites leased by the Company is approximately
$208,000. The Company expects that the average cash investment required to
open the two Company owned restaurants under construction or development as of
April 28, 2002, excluding land and pre-opening costs, will be approximately
$0.8 million.

During second and fourth quarters of 2002 the Company recognized
impairment losses of $2.8 million and $4.7 million, respectively, for the
write-down of assets at 18 Company-owned restaurants at which operations had
ceased or would be ceased. The Company closed 13 of the restaurants by the end
of fiscal year 2002. Four of the remaining restaurants were closed subsequent
to April 28, 2002.

Critical Accounting Policies

Roadhouse Grills accounting policies are more fully described in Note A
of 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.

The most significant accounting estimates inherent in the preparation of
Roadhouse Grills financial statements include estimates associated with
managements evaluation of the recoverability of goodwill as well as those used
in the determination of liabilities related to warranty activity, litigation,
product liability, product recall, taxation and repositioning. In addition,
significant estimates form the bases for the Companys reserves with respect to
sales and pricing allowances, collectibility of accounts receivable, inventory
valuations and certain benefits provided to current employees. 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.

See New Accounting Pronouncements below for information regarding the
effects of the adoption of SFAS 142, Goodwill and Other Intangible Assets,
which could be material.

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
|                                    |                      |                                        |       | 2002                           |      | 2001   |       | 2000  
|                                    |                      |                                        |       |                                |      |        |       |       
|Total revenues                      |                      |                                        | 100.0 | %                              |      |        | 100.0 | %      |      |  | 100.0 | %   
|                                   
|                                   
|                                   
|                                   
|Cost of Company restaurant sales:   |                      |                                        |       |                                |      |        |       |        |      |  |       |     
|                                   
|                                   
|                                   
|                                   
|                                    | Food and beverage    |                                        |       | 34.6                           |      |        |       | 35.2   |      |  |       | 33.8 |     
|                                   
|                                   
|                                   
|                                   
|                                    | Labor and benefits   |                                        |       | 32.6                           |      |        |       | 32.2   |      |  |       | 29.2 |     
|                                   
|                                   
|                                   
|                                   
|                                    | Occupancy and other  |                                        |       | 23.7                           |      |        |       | 23.4   |      |  |       | 20.2 |     
|                                   
|                                   
|                                   
|                                   
|                                    | Pre-opening expenses |                                        |       | 0.3                            |      |        |       | 1.5    |      |  |       | 1.6  |     
|                                    |                      |                                        |       |                                |      |        |       |        |      |  |       |     
|                                    |                      | Total cost of Company restaurant sales |       |                                | 91.2 |        |       |        | 92.3 |  |       |      | 84.8 | 
|                                   
|                                   
|                                   
|                                   
|Depreciation and amortization       |                      |                                        | 5.7   |                                |      |        | 6.1   |        |      |  | 5.7   |     
|                                   
|                                   
|                                   
|                                   
|General and administrative expenses |                      |                                        | 5.7   |                                |      |        | 6.5   |        |      |  | 5.5   |     
|                                   
|                                   
|                                   
|                                   
|Impairment of long-lived assets     |                      |                                        | 4.7   |                                |      |        | 1.8   |        |      |  |      |     
|                                   
|                                   
|                                   
|                                   
|Restructuring Charges               |                      |                                        | 3.2   |                                |      |        |      |        |      |  |      |     

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|                                                                                   |                          |  |       |       |   |  |      |        |   |  |      |      |  | 
|---------------------------------------------------------------------------------- | ------------------------ |  | ----- | ----- | - |  | ---- | ------ | - |  | ---- | ---- |  | 
|Reorganization items                                                               |                          |  | 0.6   |       |   |  |     |        |   |  |     |     
|                                                                                   |                          |  |       |       |   |  |      |        |   |  |      |     
|                                                                                   | Total operating expenses |  |       | 111.1 |   |  |      | (106.7 | ) |  |      | 96.0 | 
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Operating (loss) income  |  |       | (11.1 | ) |  |      | (6.7   | ) |  |      | 4.0  | 
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Total other (expense)                                                              |                          |  | (2.4  | )     |   |  | (1.7 | )      |   |  | (1.5 | )   
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|(Loss) income before taxes and cumulative
Effect of change in accounting principle |                          |  | (13.5 | )     |   |  | (8.4 | )      |   |  | 2.5  |     
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Income tax expense                                                                 |                          |  | 0.0   |       |   |  | 1.1  |        |   |  | 0.1  |     
|                                                                                   |                          |  |       |       |   |  |      |        |   |  |      |     
|(Loss) income before cumulative effect of
Change in accounting principle           |                          |  | (13.5 | )     |   |  | (9.5 | )      |   |  | 2.4  |     
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Cumulative effect of change in accounting
Principle (net of tax benefit of $248)   |                          |  |      |       |   |  |     |        |   |  | 0.6  |     
|                                                                                   |                          |  |       |       |   |  |      |        |   |  |      |     
|Net (loss) income                                                                  |                          |  | (13.5 | )%    |   |  | (9.5 | )%     |   |  | 1.8  | %   
|                                                                                   |                          |  |       |       |   |  |      |        |   |  |      |     
|RESTAURANT DATA:                                                                   |                          |  |       |       |   |  |      |        |   |  |      |     
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Company-owned restaurants:                                                         |                          |  |       |       |   |  |      |        |   |  |      |     
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Beginning of period      |  |       | 83    |   |  |      | 72     |   |  |      | 55   | 
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Opened                   |  |       | 3     |   |  |      | 11     |   |  |      | 17   | 
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Closed                   |  |       | (13   | ) |  |      | 0      |   |  |      | 0    | 
|                                                                                   |                          |  |       |       |   |  |      |        |   |  |      |     
|                                                                                   | End of period            |  |       | 73    |   |  |      | 83     |   |  |      | 72   | 
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Franchised restaurants                                                             |                          |  | 7     |       |   |  | 7    |        |   |  | 3    |     
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Licensed restaurants                                                               |                          |  | 0     |       |   |  | 0    |        |   |  | 0    |     
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Joint Venture                                                                      |                          |  | 1     |       |   |  | 0    |        |   |  | 0    |     
|                                                                                   |                          |  |       |       |   |  |      |        |   |  |      |     
|Total restaurants                                                                  |                          |  | 81    |       |   |  | 90   |        |   |  | 75   |     

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 to
$55.1 million, or 6.7%, 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 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

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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 and Reorganization Items. General and
administrative costs including reorganization decreased $1.9 million, or 4.5%,
to $9.1 million for fiscal year 2002 versus $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 personnel, net
of increased expenses for reorganization items. Reorganization items occurred
in fiscal year 2002 only and represent amounts incurred as a result of the
Chapter 11 proceedings in accordance with SOP 90-7. The amounts for
reorganization items in general and administrative expenses is $876,207, which
represents amounts incurred for legal, professional, and consulting services.

Asset Impairment.The Company recorded a $7.5 million charge in fiscal
year 2002 compared to $3.1 million 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. The
asset impairment charge in both years is based on SFAS No. 121 (Accounting for
Impairment of Long-lived Assets and for Long-Lived Assets to be Disposed of).

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 taxes (expense).The Company recorded income tax expense of
$49,000 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.

FIFTY-TWO WEEKS ENDED APRIL 29, 2001 COMPARED TO THE FIFTY-THREE WEEKS ENDED APRIL 30, 2000 (FISCAL YEAR 2000)

Total revenues. Total revenues increased $19.2 million, or 12.9%, from
$148.9 million for fiscal year 2000 to $168.1 million for fiscal year 2001.
This increase is primarily attributable to sales generated at the 11 new
restaurants opened by the Company since the end of the fiscal year 2000 and the
full year impact of operations of the 17 locations opened during fiscal year
2000. Sales at comparable stores for fiscal year 2001 decreased 5.2% compared
with fiscal year 2000. The Company believes that this decrease is partially
attributable to reduced marketing and advertising expenditures in fiscal year
2001 as compared to fiscal year 2000 and increased competition. The Company
spent 3.3% of revenue on marketing expense in fiscal year of 2000 versus only
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 increased $8.8 million to
$59.1 million for fiscal year 2001 from $50.3 million for fiscal year 2000.
This increase is primarily attributable to 11 new restaurants opened by the
Company since the end of the fiscal year 2000 and the full year impact of
operations of the 17 locations opened in fiscal year 2000. As a percentage of
sales, food and beverage costs increased by 1.4% to 35.2% for fiscal year 2001
from 33.8% for fiscal year 2000. This increase can be attributable to a change
in beef procurement practices and a general increase in food cost. In the
third quarter of fiscal year 2001, the Company changed from using in house meat
cutters to purchasing precut portion controlled beef. The Company estimates
that the change to precut beef, increased food and beverage costs as a
percentage of

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revenue by approximately 1.4%. The Company anticipates a 0.8%
decrease in labor costs due to
the elimination of all meat cutters in the future.

Labor and benefits. Labor and benefits costs increased $10.6 million to
$54.1 million for fiscal year 2001 from $43.5 million for fiscal year 2000.
The increase is primarily due to the operation of 11 new restaurants opened
since the end of the fiscal year 2000 and the full year impact of operations of
the 17 locations opened in fiscal year 2000. As a percentage of sales, labor
and benefits costs increased 3.0% to 32.2% for fiscal year 2001 from 29.2% for
fiscal year 2000. During fiscal year 2001, the Company increased the number of
hourly personnel at its restaurants in order to provide excellent customer
service. During fiscal year 2001, the Company implemented an aggressive
recruiting campaign to attract talented restaurant managers. Due to the
competitive labor market, the Company incurred higher management salaries.

Occupancy and other. Occupancy and other costs increased $9.2 million to
$39.3 million for fiscal year 2001 from $30.1 million for fiscal year 2000.
The increase is due to the operation of 11 new restaurants opened since the end
of the fiscal year 2000 and the full year impact of operations of the 17
locations opened in fiscal year 2000, increase in equipment rental expense and
an increase in utilities expense due to higher fuel costs. As a percentage of
sales, occupancy and other was 23.4% for fiscal year 2001 versus 20.2% for
fiscal year 2000. During fiscal year 2000 and 2001, the Company entered into
sale-leaseback agreements to finance furniture and equipment for new locations.
These leases were recorded as operating leases and no gain or loss was
recorded in these transactions.

Pre-opening expenses.Pre-opening expenses increased $94,000 to $2.5
million for fiscal year 2001 from $2.4 million in the for fiscal year 2000.
The increase is due to the pre-opening expenses incurred in fiscal year 2001
for stores opened in the fourth quarter of fiscal year 2000.

Depreciation and amortization.Depreciation and amortization increased
$1.7 million to $10.3 million for fiscal year 2001 from $8.6 million for fiscal
year 2000. The increase is primarily due to the operation of 11 new
restaurants opened since the end of the fiscal year 2000 and the full year
impact of operations of the 17 locations opened in fiscal year 2000.

General and administrative. General and administrative costs increased
$2.8 million to $11.0 million for fiscal year 2001 versus $8.2 million for
fiscal year 2000. The increase is primarily the result of the Companys
substantial recruiting efforts. The Company devoted significant capital
resources in fiscal year 2001 to upgrade store management positions. The
Company plans to continue to maintain a pool of managers that are trained
according to the Roadhouse Grill philosophy. As a percentage of sales, general
and administrative costs increased 1.0% from 5.5% for fiscal year 2000 to 6.5%
for fiscal year 2001.

Asset Impairment.The Company recorded a $3.1 million charge in fiscal
year 2001 due to the impairment of assets at four stores based on SFAS No. 21
(Accounting for Impairment of Long-lived Assets and for Long-Lived Assets to be
Disposed of).

Total other expense.Total other expense increased $554,000 to $2.9
million for fiscal year 2001 from $2.3 million for fiscal year 2000. The
increase is primarily due to additional interest expense on additional debt
incurred due to the development and opening of 11 new restaurants since the end
of fiscal year 2000 and the full year impact of operations of the 17 locations
opened in fiscal year 2000, offset by $0.8 million proceeds from an eminent
domain settlement on a leased property.

Cumulative effect of change in accounting principle.During the first
quarter of fiscal year 2000, the Company adopted the provisions of SOP 98-5.
The Company recorded an expense of $877,000 (net of tax benefit) related to the
adoption of SOP 98-5. The Companys policy, effective at the beginning of the
fiscal year 2000 first quarter, has been to expense all pre-opening costs as
incurred, as required by SOP 98-5.

Income taxes (expense).The Company recorded income tax expense of $1.8
million for fiscal year 2001. During the third 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

On January 18, 2002, 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). The Company had recently experienced significant cash
flow problems primarily resulting from the opening of 31 new restaurants in the
past 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 other major creditors in an effort to effect an
out-of-court restructuring.

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 the opportunity to prepare a Chapter 11 plan
of reorganization.

On April 16, 2002, the Court entered an order for relief and the Company
filed its Chapter 11 plan of reorganization and its disclosure statement in
support of the plan. Subsequent to the entry of the order for relief, the
Company has 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 whether to accept or
reject the plan of reorganization. However, the court would not permit such a
vote until it approved a disclosure statement as containing information
adequate to enable a hypothetical reasonable investor typical of holders of
claims or interests of the relevant classes to make an informed judgment about
the plan of reorganization.

The Company filed several amendments to 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 Disclosure
Statement is attached to this Form 10-K as Exhibit 2.1. 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, the Court terminated exclusivity but refused to
postpone the hearing on confirmation of the Plan.

Thereafter, Restaurants Acquisition I, Inc. (RAI), 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
(the Modification).

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 is embodied in a term sheet between the Company
and CNL dated August 21, 2002 (the CNL Term Sheet).

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The hearing on confirmation of the Plan, as modified by the Modification,
took place on August 21, 2002. At the close of the hearing, the Court
announced that the Plan, as modified by the Modification and the Confirmation
Order (as hereinafter defined) (the Confirmed Plan), 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 Confirmation Order is attached to this report on
Form 10-K as Exhibit 2.3. The Modification and CNL Term Sheet are attached as
exhibits to the Confirmation Order.

The Confirmed Plan is scheduled to become effective on or before September
30, 2002 (the Effective Date). On the Effective Date, the Company is to
receive an infusion of new capital of $5 million in exchange for 13,888,889
shares (47.53%) of new common stock in the reorganized Company (the New Common
Stock). The 13,888,889 shares will be issued in a private placement pursuant
to Section 4(2) of, or Regulation D promulgated under, the Securities Act of
1933, as amended (the Private Placement Securities). The Private Placement
Securities
will be issued to Berjaya Group (Cayman) Limited (Berjaya), Prime Gaming
Philippines, Inc. (Prime), Ayman Sabi , or designee (Sabi), and Stephen C.
Saterbo, or designee (Saterbo), as more particularly set forth in the table
immediately below. These parties have placed $5 million in escrow with the
Companys co-bankruptcy counsel, Berger Singerman, P.A.

|         |  |            |           |             |  |                  |     |           |  |  |           |  |  |               |       |  
|-------- |  | ---------- | --------- | ----------- |  | ---------------- | --- | --------- |  |  | --------- |  |  | ------------- | ----- | -
|         |  |            |           |             |  |                  |     |           |  |  |           |  |  | Percentage of
|         |  | Investment |           | Price/Share |  | Number of Shares |     | Ownership
|         |  |            |           |             |  |                  |     |          
|Berjaya  |  | $          | 3 million |             |  | $                | .36 |           |  |  | 8,333,333 |  |  |               | 28.52 | %
|        
|        
|        
|        
|Prime    |  | $          | 500,000   |             |  | $                | .36 |           |  |  | 1,388,889 |  |  |               | 4.75  | %
|        
|        
|        
|        
|Sabi*    |  | $          | 1 million |             |  | $                | .36 |           |  |  | 2,777,778 |  |  |               | 9.51  | %
|        
|        
|        
|        
|Saterbo* |  | $          | 500,000   |             |  | $                | .36 |           |  |  | 1,388,889 |  |  |               | 4.75  | %



| |  | 
| |  | 

|* |  | or designee
|- |  | -----------

Berjaya is the Companys majority shareholder, representing approximately
62% of the Companys common stock prior to the aforementioned $3.5 million cash
infusion by Berjaya.

Prime is an affiliate of Berjaya. It is 58% owned by Berjaya Group
Berhad, which owns 100% of Berjaya. Prime is incorporated and headquartered in
the Philippines.

Saterbo is a senior vice president, member of the board of directors, and
substantial shareholder of Colorado Boxed Beef Company, a major supplier of the
Company.

Sabi is president, chief executive officer and a director of the Company.

Pursuant to the Confirmed Plan, on the Effective Date, Berjaya will
receive, in full satisfaction of the $1.5 million loan, 4,166,667 shares of New
Common Stock at the rate of $.36 per share, representing 14.26% of the
outstanding common stock in the reorganized Company.

Under the Confirmed Plan, on the Effective Date, 9,708,741 shares of
common stock in the Company currently outstanding (the Old Common Stock), and
any rights, options, warrants, contingent warrants, subscriptions or other
agreements and contractual rights to acquire or obtain an interest in the
shares of the Company, will be cancelled. The Confirmed Plan provides for each
holder of Old Common Stock to receive, in respect of its shares of Old Common
Stock, its ratable share of 11,175,052 shares of New Common Stock, representing
38.24% of the stock in the reorganized Company. The total number of shares of
New Common Stock to be issued under the Confirmed Plan is 29,220,608.

Under the Confirmed Plan, substantial payments (approximately $4.4
million) will be required to be made on the Effective Date to pay
administrative and other priority claims as well as amounts required to cure
defaults on unexpired leases of real and personal property and executory
contracts being assumed by the Company. The Company believes that its cash on
hand together with the new equity infusion ($5.0 million) will provide
sufficient funds to make these payments.

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As restructured under the Confirmed Plan, the Companys secured and
unsecured debt, as well as assumed leases and executory contracts, will require
substantial monthly payments over extended periods. The amount to be paid by
the end of fiscal year 2003 includes approximately $4.3 million principal and
$2.2 million interest, subject to certain claims which are in negotiations
subject to the Courts final ruling. The Company believes it will have
sufficient cash flow to service the debt through April, 2003. The reader is
referred to the Confirmed Plan, attached to this report on Form 10-K as Exhibit
2.3, for additional details of repayment of the restructured indebtedness. The
Companys ability to reorganize successfully will depend on, among other
things, its ability to meet future payment obligations over extended periods
beyond fiscal year 2003. There can be no assurance that the future profits of
the Company will be sufficient to fund these obligations.

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 Statement of Position 90-7 (SOP 90-7),
Financial Reporting by Entities in Reorganization under the Bankruptcy Code.
The ability of the Company to continue operations is predicated upon, among
other things, consummation of the Confirmed Plan, the ability to generate cash
flow from operations and the ability to obtain financing sources sufficient to
satisfy future obligations.

The Companys material financial commitments relate principally to its
working capital requirements and its obligations to make capital lease and term
loan payments, monthly interest payments on its various loans and lease
payments pursuant to certain real property leases. In addition, capital
requirements relating to the opening of new restaurants have been significant.

The Company expects to open two additional restaurants in fiscal year 2003
at a total cost of approximately $1.6 million. It is expected that the cash
required to develop new stores will be generated 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 is being restructured as a result of the Confirmed
Plan.

The Company has experienced significant cash flow problems primarily due
to the Company opening 31 new restaurants in the past 36 months. The Company
believes that its ability to generate cash from operations is dependent upon,
among other things, increased demand, restructuring its operations to minimize
cash expenditures and the successful development of marketing strategies. The
Company has implemented revenue enhancement programs 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
previously incurred liabilities and current operations.

In September 1997, the Company entered into a $15.0 million loan facility
with Finova Capital Corporation (Finova). The facility consists of a 15-year
term loan collateralized by real estate with an interest rate of 9.55%. The
proceeds were used in part to liquidate existing mortgages on 12 restaurants,
which amounted to $7.4 million as of September 1997. The remaining balance of
$7.3 million, net of fees and other costs, was primarily used for expansion of
the Companys operations. Monthly principal and interest payments for this
facility are due through October 2012. The balance on the note as of April 28,
2002 was $12.3 million. This debt is being restructured as a result of the
Confirmed Plan.

On March 27, 1998, the Company entered into a $2.9 million loan facility
with Finova. The facility consists of a 10-year term loan collateralized by
personal property and fixtures at four Company-owned restaurants with an
interest rate of 8.96%. The proceeds, net of fees and other costs, were used
primarily for expansion of the Companys operations. The balance of the loan
as of April 28, 2002 was $2.1 million. This debt is being restructured as a
result of the Confirmed Plan.

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In October 1998, the Company entered into a $5.0 million, unsecured
working capital revolving loan with Finova, which was due to expire on December
31, 2001. In the first quarter of 2000, the Company collateralized that loan
with improvements to real estate at three locations and real estate and
improvements at an additional location. This debt is being restructured as a
result of the Confirmed Plan.

On February 14, 2001, Berjaya (which owns approximately 62% of the
Companys common stock) loaned the Company $1.5 million. The loan is evidenced
by a promissory note which bears interest at 10% per annum, is payable by the
Company on demand at any time after August 14, 2001, and is collateralized by
intellectual property and certain unencumbered real and personal property.
Pursuant to the Confirmed Plan, on the Effective Date, Berjaya will receive, in
full satisfaction of the $1.5 million loan, 4,166,667 shares of New Common
Stock at the rate of $.36 per share, representing 14.26% of the outstanding
common stock in the reorganized Company.

The Company had a $10.0 million sale-leaseback credit facility available
with CNL Fund Advisors (CNL) that expired in January 2001. The credit
facility with CNL was available for the development of new Roadhouse Grill
restaurants.

The Company had a $18.5 million sale-leaseback credit facility with FFCA
for the development of new Roadhouse Grill restaurants that expired in December
2001.

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.
During fiscal year 2002, the Company did not enter into any new
sale-leaseback transactions.

Due to the Companys liquidity problems, on February 21, 2001, the Company
issued two notes for an aggregate amount of $5.9 million to Colorado Boxed Beef
Company (CBBC), the Companys then principal food supplier, for trade
payables. The notes were to bear interest at 9.5%. The note for $4.4 million
was due no earlier than 180 days from the date of the note. The $1.5 million
note matured on April 21, 2001. The Company was unable to make the $1.5
million payment on April 21, 2001. In July 2001, CBBC agreed to restructure
the notes. Under the new terms of the notes, the Company paid CBBC $200,000 in
July 2001. The Company was also required to pay CBBC an additional $1.0
million on or before September 30, 2001. If the $1.0 million payment was made
on or before September 30, 2001, the notes were to be amortized over 48 months
bearing interest at 11.5%. The notes were to be secured by the unencumbered
fixed assets of 17 restaurant locations. In September 2001, the Company paid
CBBC approximately $0.6 million but was unable to pay the additional $0.4
million required by the two new notes. As of April 28, 2002, the Company owed
CBBC approximately $5.4 million. This debt is being restructured as a result
of the Confirmed Plan.

In April 2001, the Company agreed to a payment plan with Tinsley
Advertising and Marketing Inc. (Tinsley) for the $1.7 million due to Tinsley
for advertising services previously provided by Tinsley to the Company.
Pursuant to the terms of the repayment plan, the Company paid Tinsley $50,000
seven days after the date of the note and was obligated to pay Tinsley $20,000
a week from April 1, 2001 through August 31, 2001 and $40,000 per week
thereafter until the debt is paid in full. In November of 2001, Tinsley and
the Company modified the agreement. The Company was then required to pay
$18,000 per week until the debt is fully satisfied. In February of 2002, the
agreement was modified again. The new agreement reduced the weekly payments to
$12,000 per week. As of April 28, 2002, the Company owed Tinsley approximately
$0.7 million. This debt is being restructured as a result of the Confirmed
Plan.

During January 1999, the Company entered into a Master Security Agreement
with Pacific Financial Company. The agreement consists of two 5-year term
loans collateralized by personal property and fixtures at two Company-owned
restaurants with an effective interest rate of 10.7%. Monthly principal and
interest payments are due through February 2004. The balance due as of April
28, 2002 was $452,103.

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SUMMARY OF CASH FLOWS

Cash provided by operating activities during fiscal year 2002 was $7.6
million, as compared with $0.8 million used by operating activities during
fiscal year 2001. The primary sources of cash for fiscal year 2002 were a
decrease in income tax receivable of $2.2 million and a decrease in accounts
receivable of $1.0 million offset by a net loss of $21.4 million. The primary
use of cash in fiscal 2001 were a net loss of $15.9 million and a decrease in
accounts payable of $5.3 million offset by an increase in short-term debt of
$5.9 million.

Cash used by investing activities during fiscal year 2002 was $2.6
million, as compared to $7.5 million used during fiscal year 2001. Cash used
by investing activities in fiscal year 2002 consisted primarily of an increase
in property, plant and equipment.

Cash used by financing activities during fiscal year 2002 was $2.2
million, as compared to $9.4 million provided by financing activities during
fiscal year 2001. Cash used by financing activities in fiscal year 2002
consisted of repayments of long term debt and capital lease obligations. Cash
provided by financing activities in fiscal year 2001 consisted primarily of
proceeds from long term debt.

CAPITAL EXPENDITURES

The Company plans to open the two Company-owned restaurants under construction
or development as of April 28, 2002 in fiscal year 2003. The Company expects
that the average cash investment required to open these new restaurants in
fiscal year 2003, excluding land and pre-opening costs, will be approximately
$0.8 million per restaurant. At this time it is expected that this amount 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 73 restaurants owned and operated by the
Company as of April 28, 2002, 34 are located in residential areas in Florida.
Four of the restaurants outside Florida were closed subsequent to April 28,
2002.

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. 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;                                                                                           
|
| |  |  | 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.                                          

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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. Management believes that the impact of the
pronouncement on its operations, if any, will not be material.

As of April 28, 2002, the Company had unamortized goodwill in the amount
of $1,527,596, and unamortized identifiable intangible assets in the amount of
$407,235, all of which will be subject to the transition provisions of SFAS
Nos. 141 and 142. Amortization expense related to goodwill was $133,031 for
the year ended April 28, 2002. Because of the extensive effort needed to
comply with adopting SFAS Nos. 141 and 142, it is not practicable to reasonably
estimate the impact of adopting these statements on the Companys financial
statements at the date of this report, including whether it will be required to
recognize any transitional impairment losses as the cumulative effect of a
change in accounting principle.

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.
Management believes the impact of this pronouncement on its operations, if any,
will not be material.




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 28, 2002, the Company had approximately $9.0 million in variable rate
indebtedness outstanding, representing approximately 27% of the Companys total
outstanding indebtedness.




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.

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

Not applicable.




PART III




ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The 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         |  |     | 39 |          |  | President and Chief Executive Officer
|                  
|                  
|                  
|                  
|Martin J. Bernholz |  |     | 50 |          |  | Secretary and General Counsel        

Ayman Sabi was elected the Companys President and Chief Executive Officer
in 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. Mr. Sabi
also serves as a member of the Board of Directors of various retail companies
and financial institutions including The White House, Inc. and New Global
Holdings.

Martin J. Bernholz has served as the Companys Secretary and General
Counsel since February 1998. From 1989 to present, Mr. Bernholz has served as
the President of National Retail Group, Inc., a real estate and retailing
consulting firm which has provided supportive management services to a variety
of retail companies, and previously provided services to the Company. Mr.
Bernholz serves as the Chairman of the Board of various retail companies and as
a member of the Board of Directors of various retail companies including The
White House, Inc. Mr. Bernholz was retained in October 1997 to provide
management consulting services and administrative direction in the
restructuring of Roasters Corporation (Roasters), a company in serious
financial distress. At the request of the shareholders of Roasters, Mr.
Bernholz accepted the position of Chief Executive Officer and Director of
Roasters at that time. In March 1998, Roasters filed for protection from
creditors under Chapter 11 of the Bankruptcy Code, and Mr. Bernholz
relinquished the position of Chief Executive Officer. On behalf of the same
investor group, Mr. Bernholz accepted the offices of Chief Executive Officer
and Director of East Coast Bagels, Inc. (East Coast), also in financial
distress, concurrent with action by East Coast in February 1998 to seek
protection from creditors under Chapter 11 of the Bankruptcy Code. Roasters
and East Coast were sold in March 1999 and November 1998, respectively.

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  
|                |  |     |    |                |  |               
|Vincent Tan     |  |     | 50 |                |  | February 1998  |  | September 2002
|               
|               
|               
|               
|Ayman Sabi      |  |     | 39 |                |  | February 1997  |  | September 2002
|               
|               
|               
|               
|Philip Friedman |  |     | 55 |                |  | September 1996 |  | September 2002
|               
|               
|               
|               
|Alain K.K. Lee  |  |     | 45 |                |  | January 1998   |  | September 2002

Vincent Tan was elected Chairman of the Board of Directors of the Company
in February 1998. Mr. Tan is the Chairman and Chief Executive Officer of
Berjaya Group Berhad, a Malaysian company that owns Berjaya, the majority
shareholder of the Company. Mr. Tan has been Chief Executive Officer of
Berjaya Group Berhad since 1984.

Philip Friedman has served as President of McAlisters, Inc. since March
1999. Mr. Friedman served as President of Panda Management, Inc. from January
1996 to March 1999. In addition, since June 1986, Mr. Friedman has served as
the President of P. Friedman &

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Associates, Inc., a business planning and management consulting firm. Mr.
Friedman is also a director of Eateries, Inc., and Romacorp, Inc.

Alain K.K. Lee has been Vice President of Corporate Affairs and
Franchising for the Company since July 1998. From 1990 to 1998, Mr. Lee served
as Berjaya Group Berhad Chief Financial Officer, General Manager and Director
of several other Berjaya subsidiary companies. Mr. Lee also serves on the
board of directors of ITLS, Inc. and TAIGA Forest Products Ltd.

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 28, 2002, all of the
Companys officers, directors and greater than 10% beneficial owners, complied
with all Section 16(a) filing requirements applicable to them.




ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the compensation earned by the Companys
Chief Executive Officer for services rendered in all capacities to the Company
for each of the last three fiscal years, and one additional individual who was
no longer serving as an executive officer as of April 28, 2002. Other than the
Companys Chief Executive Officer, no executive officers, who were serving as
executive officers as of April 28, 2002, total salary and bonus exceeded
$100,000 for the fiscal year ended April 28, 2002. The individuals included in
the table are collectively referred to as the Named Executive Officers.

|                    |                               |        |      |            |  |           |         |              |  |                     |   |              |  |           |        |        |     |  |        |        | 
|------------------- | ----------------------------- | ------ | ---- | ---------- |  | --------- | ------- | ------------ |  | ------------------- | - | ------------ |  | --------- | ------ | ------ | --- |  | ------ | ------ | 
|ANNUAL COMPENSATION
|NAME AND            |                               | FISCAL |      |            |  |           |         |              |  |                     |   | OTHER ANNUAL |  | ALL OTHER
|POSITION PRINCIPAL  |                               | YEAR   |      | SALARY ($) |  | BONUS ($) |         | COMPENSATION |  | COMPENSATION ($)(3)
|                    |                               |        |      |            |  |           |         |              |  |                    
|Ayman Sabi,         |                               |        | 2002 |            |  |           | 405,788 |              |  |                     |  |              |  |           | 62,178 | (1)    |     |  | 40,579 |       
|                    | President and Chief           |        |      | 2001       |  |           |         | 426,461      |  |                     |   | 170,000      |  |           |        | 67,858 | (1) |  |        | 41,727 | 
|                    | Executive Officer             |        |      | 2000       |  |           |         | 409,153      |  |                     |   |             |  |           |        | 67,848 | (1) |  |        | 37,384 | 
|                   
|                   
|                   
|                   
|Harry Rosenfeld     |                               |        | 2002 |            |  |           | 138,462 |              |  |                     |  |              |  |           |        |        |     |  | 8,800  |       
|                    | Chief Financial Officer and   |        |      | 2001       |  |           |         | 103,238      |  |                     |   |             |  |           |        |        |     |  |        | 4,400  | 
|                    | Vice President of Finance (2) |        |      | 2000       |  |           |         |             |  |                     |   |             |  |           |        |        |     |  |        |       | 
|                   
|                   
|                   
|                   
|                    |                               |        |      |            |  |           |         |              |  |                     |   |              |  |           |        |        |     |  |        |        | 



|(1) |  | This amount represents rent and car lease payments made by the Company
for Mr. Sabi.         
|--- |  | ---------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Mr. Rosenfelds employment with the Company terminated on March 8, 2002.                     
|   
|   
|   
|   
|(3) |  | Represents Supplemental Executive Retirement Plan (SERP) contributions
made by the Company.

Option Grants Table

No stock options were granted to the Named Executive Officers in fiscal
year 2002.

Aggregated Option Exercises and Fiscal Year-End Option Value Table

The following table sets forth certain information concerning the numbers
and intrinsic value of the stock options held by the Named Executive Officers
at April 28, 2002. Year-end values are based on the closing price of $0.28 per
share of the common stock on April 28, 2002,

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##### Table of Contents



on the Nasdaq National Market. They do not reflect the actual amounts, if any,
which may be realized upon the future exercise of remaining stock options and
should not be considered indicative of future stock performance. No options
were exercised by the Named Executive Officers in fiscal year 2002. Because
the closing price per share of the Companys common stock on April 28, 2002,
was less than the exercise prices of the unexercised options, there were no
in-the-money unexercised options held at the end of fiscal year 2002.

|                |  |                               |         |    
|--------------- |  | ----------------------------- | ------- | ---
|                |  | NUMBER OF                    
|                |  | SHARES UNDERLYING UNEXERCISED
|                |  | OPTIONS AT FISCAL YEAR-END(#)
|                |  | EXERCISABLE(E)/              
|NAME            |  | UNEXERCISABLE(U)             
|                |  |                              
|Ayman Sabi      |  |                               | 215,000 | (E)
|               
|               
|               
|               
|                |  |                               | -0-     | (U)
|               
|               
|               
|               
|Harry
Rosenfeld |  |                               | -0-     | (E)
|               
|               
|               
|               
|                |  |                               | -0-     | (U)

Compensation of Directors

Each outside director of the Company receives $3,500 for each Board
Meeting that he attends. The Company schedules four regular meetings of the
Board of Directors per year.

Compensation Committee Interlocks and Insider Participation

During fiscal year ended April 28, 2002, the Companys Board of Directors
did not have a compensation committee (or other committee performing equivalent
functions). During fiscal year ended April 28, 2002, the Companys Board of
Directors had no discussions regarding executive officer compensation.

Compensation Committee Report on Executive Compensation

The reader should refer to the previous section regarding the Compensation
Committee.

Stock Performance Graph

The following line graph compares the change in the cumulative total
return of Roadhouse Grill, Inc.s common stock to the Standard and Poors
Midcap 400 Index and Standard & Poors 500 Restaurants over the fiscal period
May, 1997 through fiscal April, 2002. The graph assumes an initial investment
of one hundred dollars on April 25, 1997 and the reinvestment of dividends, if
any.

(TOTAL SHAREHOLDER RETURNS)

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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 28, 2002, 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 to be |         | Weighted-average     |  | future issuance under equity  
|                                                           |  | issued upon exercise of    |         | exercise price of    |  | compensation plans            
|                                                           |  | outstanding options,       |         | outstanding options, |  | (excluding securities         
|Plan category                                              |  | warrants and rights        |         | warrants and rights  |  | reflected in the first column)
|                                                           |  |                            |         |                      |  |                               
|Equity compensation
plans approved by
security holders*    |  |                            | 521,099 |                      |  | $                              | 4.61 |  |  |                         | 419,971 | 
|                                                          
|                                                          
|                                                          
|                                                          
|Equity compensation
plans not approved
by security holders |  |                            | -0-     |                      |  |                                | N/A  |  |  |                         | -0-     | 
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |  |                            |         |                      |  |                                |      |  |  |                         |         | 
|                                                          
|                                                          
|                                                          
|                                                          
|Total                                                      |  |                            | 521,099 |                      |  | $                              | 4.61 |  |  |                         | 419,971 | 



|* |  | Under the Confirmed Plan, the Companys existing stock option plans will be
terminated and any outstanding options will be canceled.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------

Security Ownership Of Certain Beneficial Owners and Management

The following table indicates the share ownership of the Companys common
stock, as of April 28, 2002, of directors, Named Executive Officers, and each
shareholder known to the Company to be the beneficial owner of more than 5% of
the Companys outstanding common stock and all directors and executive officers
as a group, based on 9,708,741 shares of common stock outstanding on such date.
No effect has been given to the changes in ownership that will occur upon the
Effective Date.

|                                                                    |  |                    |           |          |  |  |      | 
|------------------------------------------------------------------- |  | ------------------ | --------- | -------- |  |  | ---- | 
|                                                                    |  | TOTAL SHARES       |           | PERCENT 
|NAME/ADDRESS                                                        |  | BENEFICIALLY OWNED |           | OF CLASS
|                                                                    |  |                   
|Vincent Tan                                                         |  |                    | 6,060,466 | (1)      |  |  | 62.3 | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Berjaya Group (Cayman) Limited                                      |  |                    | 6,035,466 |          |  |  | 62.2 | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Dr. Christian F. Horn                                               |  |                    | 567,924   | (2)      |  |  | 5.9  | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|CupertinoVentures Partnership III, L.P.                             |  |                    | 551,258   | (2)      |  |  | 5.7  | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Ayman Sabi                                                          |  |                    | 218,000   | (3)      |  |  | 2.2  | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Philip Friedman                                                     |  |                    | 30,000    | (4)      |  |  | *    | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Alain K.K. Lee                                                      |  |                    | 55,000    | (5)      |  |  | *    | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Harry Rosenfeld                                                     |  |                    | -0-       |          |  |  | -0-  | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|All directors and
current executive
officers as a group
(5 persons) |  |                    | 6,363,466 | (6)      |  |  | 63.9 | 



|*   |  | Less than 1%                                                                                                                                                                                                                                                                                                                                                          
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(1) |  | Represents (i) 6,035,466 shares beneficially owned by Berjaya and (ii)
25,000 shares of common stock which may be acquired within 60 days of April 28,
2002, pursuant to the exercise of options beneficially owned by Mr. Tan. As
Chairman/Chief Executive Officer of Berjaya Group Berhad and the owner of 100%
of the outstanding shares of Berjaya, Mr. Tan may be

47



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|    |  | deemed to be the beneficial owner of all of the shares owned by Berjaya in
accordance with Rule 13d-3 under the Securities and Exchange Act of 1934. Mr.
Tan disclaims ownership of the shares beneficially owned by Berjaya. The
address for Mr. Tan and Berjaya is 15th Floor, Menara Berjaya, KL Plaza, 179
Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia.                                                                                                                                                                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Represents (i) 16,666 shares of common stock beneficially owned by Dr. Horn
and (ii) 551,258 shares beneficially owned by Cupertino Ventures Partnership
III, L.P. (Cupertino). As the Managing Partner of Horn Ventures II, L.P., a
General Partner of Cupertino, Dr. Horn may be deemed to the beneficial owner of
all the shares owned by Cupertino in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934. The address for Dr. Horn and Cupertino is
20300 Stevens Creek Blvd, Suite 330, Cupertino, California, 95104.                                                                                            
|   
|   
|   
|   
|(3) |  | Represents (i) 215,000 shares of common stock which may be acquired within
60 days of April 28, 2002, pursuant to the exercise of options beneficially
owned by Mr. Sabi and (ii) 3,000 shares of common stock beneficially owned by
Mr. Sabi. Mr. Sabi is an agent for Arab Multinational Investment Company and
Societe Financiere Privee S.A. Geneve. Mr. Sabi disclaims ownership of (i)
160,565 shares beneficially owned by Arab Multinational Investment Company; and
(ii) 411,950 shares beneficially owned by Societe Financiere Privee S.A.
Geneve, in accordance with Rule 13d-3 under the Securities and Exchange Act of
1934.
|   
|   
|   
|   
|(4) |  | Represents 5,000 shares of common stock owned by Mr. Friedman and 25,000
shares which may be acquired within 60 days of April 28, 2002, pursuant to the
exercise of options beneficially owned by Mr. Friedman.                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|   
|   
|   
|(5) |  | Represents shares of common stock which may be acquired within 60 days of
April 28, 2002, pursuant to the exercise of options beneficially owned by Mr.
Lee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|   
|   
|   
|(6) |  | Includes 395,000 shares of common stock which may be acquired within 60
days of April 28, 2002, pursuant to the exercise of options beneficially owned
by the Companys directors and executive officers.                                                                                                                                                                                                                                                                                                                                                                                                                                 

NOTE: All the aforementioned options will be cancelled upon the effective date
of the Confirmed Plan.




ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Berjaya, which owns approximately 62% of the Companys common stock,
directly or indirectly owns Roadhouse Grill Hong Kong and Roadhouse Grill Asia.
In January 1996, the Company entered into the Hong Kong Master Development
Agreement which 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 The Asia
Master Development Agreement. Roadhouse Grill Hong Kong or its affiliates are
not required to pay any franchise or reservation fee for restaurants developed,
but they are responsible for paying or reimbursing approved expenses incurred
by Roadhouse Grill 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 in the amount of 2% of 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 and 40% of any
royalty fee payable by the third party franchisee, 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. The
Company did not recognize royalty income from Roadhouse Grill Hong Kong for
fiscal year 2002.

In January 1996, the Company also entered into the Asia 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 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 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

48



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##### Table of Contents



fee arrangements under the agreement are substantially the same as those under
the agreement between the Company and Roadhouse Grill Hong Kong.

As of April 28, 2002, there were three Roadhouse Grill restaurants
operating in Malaysia under the Asia Master Development Agreement. 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. The Company accrued $84,000 in royalty
income from those restaurants during fiscal year 2002. As of April 28, 2002,
$168,080 of the royalty receivable from Roadhouse Grill Asia has been fully
reserved for due to lack of payment. The remaining receivable of $86,399 is
not reserved, as it will be offset by interest payable to Berjaya.

On February 14, 2001, Berjaya (which owns approximately 62% of the
Companys common stock) loaned the Company $1.5 million. The loan is evidenced
by a promissory note which bears interest at 10% per annum, is payable by the
Company on demand at any time after August 14, 2001, and is collateralized by
intellectual property and certain unencumbered real and personal property.
Pursuant to the Confirmed Plan, on the Effective Date, Berjaya will receive, in
full satisfaction of the $1.5 million loan, 4,166,667 shares of New Common
Stock at the rate of $.36 per share, representing 14.26% of the outstanding
common stock in the reorganized Company.




PART IV




ITEM 14. 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.                                                                                                                  
|       
|       
|       
|       
|        |  |                                                                                                                                                                                                                                                              
|       
|       
|       
|       
|2.2     |  | Debtors Second Amended and Restated Chapter 11 Plan of
Reorganization as Modified Dated June 12, 2002.                                                                                                                                                      
|       
|       
|       
|       
|        |  |                                                                                                                                                                                                                                                              
|       
|       
|       
|       
|2.3     |  | Order Confirming Debtors Second Amended and Restated
Chapter 11 Plan of Reorganization, as Modified.                                                                                                                                                        
|       
|       
|       
|       
|        |  |                                                                                                                                                                                                                                                              
|       
|       
|       
|       
|3.1     |  | Articles of Incorporation of the Company (Incorporated by
reference to Exhibit 3.1 to the Companys Registration Statement on
Form S-1 as filed with the Securities and Exchange Commission on
September 26, 1996, as amended (the Registration Statement))
|       
|       
|       
|       
|        |  |                                                                                                                                                                                                                                                              
|       
|       
|       
|       
|3.2     |  | Bylaws of the Company (Incorporated by reference to Exhibit
3.2 to the Companys Registration Statement)                                                                                                                                                     
|       
|       
|       
|       
|        |  |                                                                                                                                                                                                                                                              
|       
|       
|       
|       
|10.1    |  | Form of the Companys Development Agreement (Incorporated
by reference to Exhibit 10.2 to the Registration Statement)                                                                                                                                        
|       
|       
|       
|       
|        |  |                                                                                                                                                                                                                                                              
|       
|       
|       
|       
|10.2    |  | Form of the Companys Stock Option Agreement (Incorporated
by reference to Exhibit 10.5 to the Registration Statement)                                                                                                                                       
|       
|       
|       
|       
|        |  |                                                                                                                                                                                                                                                              
|       
|       
|       
|       
|10.3    |  | Assignment and Assumption Agreement, dated March 15, 1995,
between Roadhouse Waterway, Inc. and Roadhouse Grill Commercial,
Inc., for property located in Fort                                                                                               

49



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##### Table of Contents



|      |  |                                                                                                                                                                                                                                                                             
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  | Lauderdale, Florida (lease of restaurant premises) (Incorporated
by reference to Exhibit 10.7 to the Registration Statement)                                                                                                                                                
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.35 |  | Omnibus Agreement between the Company and Finova Capital
Corporation, dated October 26,
2001 (Incorporated by reference to Exhibit 10.35 to the Companys
Quarterly Report on Form
10-Q for the fiscal quarter ended October 28, 2001.                                      
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.4  |  | 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)                           
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.5  |  | Ground Lease, dated May 25, 1995, between Bruno, Inc. and
the Company, for property located in Sandy Springs, Georgia (lease
of restaurant premises) (Incorporated by reference to Exhibit 10.9
to the Registration Statement)                                              
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.6  |  | 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)   
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.7  |  | 1994 Registration Rights Agreement, dated February 10, 1994
(Incorporated by reference to Exhibit 10.19 to the Registration
Statement)                                                                                                                                      
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.8  |  | Amendment to 1994 Registration Rights Agreement, dated June
8, 1994 (Incorporated by reference to Exhibit 10.20 to the
Registration Statement)                                                                                                                              
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.9  |  | Amendment to 1994 Registration Rights Agreement, dated July
26, 1996 (Incorporated by reference to Exhibit 10.21 to the
Registration Statement)                                                                                                                             
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.10 |  | 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)                                                                   
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.11 |  | 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)                                                                                                
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.12 |  | Amended and Restated 1994 Stock Option Plan (Incorporated
by reference to Exhibit 10.37 to the Registration Statement)                                                                                                                                                      
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.13 |  | Stock Purchase Agreement dated May 26, 1995 between the
Company and the several purchasers named in Schedule I
(Incorporated by reference to Exhibit 10.38 to the Registration
Statement)                                                                                   
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.14 |  | Investment Agreement, dated October 25, 1995 between
Berjaya and the Company (Incorporated by reference to Exhibit 10.39
to the Registration Statement)                                                                                                                     
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.15 |  | 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)                                         
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.16 |  | Severance Agreement dated July 29, 1997, between the
Company and John David Toole III (Incorporated by reference to
Exhibit 4.8 to the Companys Registration Statement on Form S-8
dated August 19, 1997)                                                                  
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.17 |  | Loan and Security Agreement by and between the Company and
Finova Capital Corporation, dated September 12, 1997 (Incorporated
by reference to Exhibit 10.44 to the Companys Quarterly Report on
Form 10-Q for the fiscal quarter ended September 28, 1997)                 
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.18 |  | Mortgage and Security Agreement by and between the Company
and Finova Capital Corporation, dated September 5, 1997
(Incorporated by reference to Exhibit 10.45 to the Companys
Quarterly Report on Form 10-Q for the fiscal quarter ended
September 28, 1997)              
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.19 |  | Promissory Note, dated September 5, 1997, made by the
Company in favor of Finova Capital Corporation (Incorporated by
reference to Exhibit 10.46 to the Companys Quarterly Report on
Form 10-Q for the fiscal quarter ended September 28, 1997)                            
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.20 |  | 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-K405 for the fiscal year ended
December 28, 1997)
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.21 |  | 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-K405 for the fiscal year
ended December 28, 1997)                                                            
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                             
|     
|     
|     
|     
|10.22 |  | 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                                                                                                        

50



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##### Table of Contents



|      |  |                                                                                                                                                                                                                                                                                                                              
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  | (H.K.) Limited (Incorporated by reference to Exhibit 10.49 to
the Companys Annual Report on Form 10-K405 for the fiscal year
ended December 28, 1997)                                                                                                                                                                       
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|10.23 |  | 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-K405 for the fiscal year ended
December 28, 1997)
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|10.24 |  | Loan and Security Agreement by and between the Company and
Finova Capital Corporation, dated March 27, 1998 (Incorporated by
reference to Exhibit 10.51 to the Companys Quarterly Report on
Form 10-Q for the fiscal quarter ended March 29, 1998)                                                                          
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|10.25 |  | Promissory Note, dated March 27, 1998, made by the Company
in favor of Finova Capital Corporation (Incorporated by reference
to Exhibit 10.52 to the Companys Quarterly Report on Form 10-Q for
the fiscal quarter ended March 29, 1999)                                                                                    
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|10.26 |  | Roadhouse Grill, Inc. 1998 Omnibus Stock Option Plan,
effective July 1, 1998 (Incorporated by reference to Exhibit A to
the Companys Proxy Statement on Schedule 14A filed November 2,
1998)                                                                                                                                
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|10.27 |  | 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)                                                                                 
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|10.28 |  | 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)                                                          
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|10.29 |  | 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)                                                      
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|10.30 |  | Revolving Loan Agreement with FINOVA Capital Corporation
(Incorporated by reference to Exhibit 10.57 to the Companys
Quarterly Report on Form 10-Q for the fiscal quarter ended October
24, 1999)                                                                                                                           
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|10.31 |  | 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)                                                                                                                                     
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|10.32 |  | 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
Quarter ended January 28, 2001)                                                                                                   
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|10.33 |  | 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)                                                                                                                 
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|10.34 |  | Repayment Plan between the Company and Tinsley Advertising
& Marketing Inc. (Incorporated by reference to Exhibit 10.3 to the
Companys Quarterly Report on Form 10-Q for the fiscal quarter
ended January 28, 2001)                                                                                                         
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|10.35 |  | Omnibus Agreement between the Company and Finova Capital
Corporation, dated October 26,
2001 (Incorporated by reference to Exhibit 10.35 to the Companys
Quarterly Report on Form
10-Q for the fiscal quarter ended October 28, 2001.                                                                                       
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|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-K405 for
the fiscal year ended April 30, 2000)                                                                                                                                                             
|     
|     
|     
|     
|      |  |                                                                                                                                                                                                                                                                                                                              
|     
|     
|     
|     
|99.1  |  | Certification by Chief Executive Officer and Acting Chief
Financial Officer Relating to a Periodic Report Containing
Financial Statements                                                                                                                                                                                    



|(b) |  | REPORTS ON FORM 8-K:
|--- |  | --------------------



| |                                                                                             
| | --------------------------------------------------------------------------------------------
| | A current report on Form 8-K was filed on May 17, 2002, reporting Item 5
(Other Events).    
| | A current report on Form 8-K was filed on February 12, 2002 reporting
Item 5 (Other Events).

51



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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
24th day
of September, 2002.

| |  |                       |  |                                                                                                 
| |  | --------------------- |  | ------------------------------------------------------------------------------------------------
| |  | ROADHOUSE GRILL, INC.
|
|
|
|
| |  |                       |  |                                                                                                 
|
|
|
|
| |  | By:                   |  | /s/ Ayman Sabi

Ayman Sabi
President, Chief Executive Officer, andActing 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 Sabi
Ayman Sabi           |  | President, Chief Executive
Officer (Principal Executive
Officer), Acting Chief Financial
Officer, and Director |  | September 24, 2002
|                                   
|                                   
|                                   
|                                   
|                                    |  |                                                                                                                |  |                   
|                                   
|                                   
|                                   
|                                   
|/s/ Vincent Tan
Vincent Tan         |  | Chairman of the Board of Directors                                                                             |  | September 24, 2002
|                                   
|                                   
|                                   
|                                   
|                                    |  |                                                                                                                |  |                   
|                                   
|                                   
|                                   
|                                   
|/s/ Philip Friedman
Philip Friedman |  | Director                                                                                                       |  | September 24, 2002
|                                   
|                                   
|                                   
|                                   
|                                    |  |                                                                                                                |  |                   
|                                   
|                                   
|                                   
|                                   
|/s/ Alain K.K. Lee

Alain K.K. Lee  |  | Director                                                                                                       |  | September 24, 2002

52



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##### Table of Contents



I, Ayman Sabi, certify that:



| |                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1.   I have reviewed this annual report on Form 10-K of Roadhouse Grill, Inc.;                                                                                                                                                                                                                                              
|
| | 2.  Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
|
| | 3.   Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
annual report;                  
|
| | Date: September 24, 2002                                                                                                                                                                                                                                                                                                    

| |  |        |  |                                                           
| |  | ------ |  | ----------------------------------------------------------
| |  | By:    |  | /s/ Ayman Sabi                                            
| |  | Name:  |  | Ayman Sabi                                                
| |  | Title: |  | Chief Executive Officer and Acting
Chief Financial Officer

53



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##### Table of Contents



INDEX TO FINANCIAL STATEMENTS

|                                                                                                                                                                                                  |  |      |     | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                                                                                                                                                  |  | Page
|Independent Auditors Report  Grant Thornton, LLP                                                                                                                                                |  |      | F-2 | 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|Independent Auditors Report  KPMG, LLP                                                                                                                                                          |  |      | F-3 | 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|Consolidated Balance Sheets as of April 28, 2002 and April 29, 2001                                                                                                                               |  |      | F-4 | 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|Consolidated Statements of Operations for the Fifty-Two Weeks Ended April
28,2002, the Fifty-Two Weeks Ended April 29, 2001, and the Fifty-Three Weeks Ended April
30, 2000                       |  |      | F-5 | 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|Consolidated Statements of Changes in Shareholders Equity for the Fifty-Two
Weeks Ended April 28, 2002, the Fifty-Two Weeks Ended April 29, 2001, and the
Fifty-Three Weeks Ended April 30, 2000 |  |      | F-6 | 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|Consolidated Statements of Cash Flows for the Fifty-Two Weeks Ended April 28,
2002, the Fifty-Two Weeks Ended April 29, 2001, and the Fifty-Three Weeks Ended April
30, 2000                      |  |      | F-7 | 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|                                                                                                                                                                                                 
|Notes to Consolidated Financial Statements                                                                                                                                                        |  |      | F-8 | 

F-1



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##### Table of Contents






REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Roadhouse Grill, Inc.

We have audited the accompanying consolidated balance sheet of Roadhouse Grill,
Inc. and Subsidiaries as of April 28, 2002, and the related consolidated
statements of operations, changes in stockholders equity, and cash flows for
the fifty two weeks then ended. 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 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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Roadhouse Grill,
Inc. and Subsidiaries as of April 28, 2002 and the consolidated results of
their operations and their consolidated cash flows for the fifty two weeks then
ended, in conformity with accounting principles generally accepted in the
United States of America.

Grant Thornton LLP
Miami, Florida
July 24, 2002 (except for Note 1, as to
      which the date is August 21, 2002)

F-2



---



##### Table of Contents






INDEPENDENT AUDITORS REPORT

The Board of Directors
Roadhouse Grill, Inc.:

We have audited the accompanying consolidated balance sheet of Roadhouse Grill,
Inc. and subsidiaries as of April 29, 2001 and the related consolidated
statements of operations, changes in shareholders equity, and cash flows for
the fifty-two weeks ended April 29, 2001, and the fifty-three weeks ended April
30, 2000. These consolidated financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Roadhouse Grill,
Inc. and subsidiaries as of April 29, 2001 and the results of their operations
and their cash flows for the fifty-two weeks ended April 29, 2001, and the
fifty-three weeks ended April 30, 2000 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 1 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.

As discussed in note 2 to the consolidated financial statements, the Company
changed its accounting for pre-opening costs in 2000.

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

F-3



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##### Table of Contents






ROADHOUSE GRILL, INC.
CONSOLIDATED BALANCE SHEETS
April 28, 2002 and April 29, 2001

($ in thousands, except per share data)

|                                                                                                                      |                                                                                                                                             |  |                                            |        |   |                |         |               |   |         |  | 
|--------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------ | ------ | - | -------------- | ------- | ------------- | - | ------- |  | 
|                                                                                                                      |                                                                                                                                             |  |                                            |        |   | April 28, 2002 |         | April 29,2001
|                                                                                                                      |                                                                                                                                             |  |                                            |        |   |                |         |              
|Assets                                                                                                                |                                                                                                                                             |  |                                            |        |   |                |         |              
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|Current assets:                                                                                                       |                                                                                                                                             |  |                                            |        |   |                |         |              
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                      | Cash and cash equivalents                                                                                                                   |  | $                                          | 3,193  |   |                | $       | 1,582         |  
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                      | Accounts
receivable, net of allowance for doubtful accounts of $294 and $0 at April 28, 2002 and April 29, 2001                             |  |                                            | 475    |   |                |         | 1,512         |  
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                      | Income Tax Receivable                                                                                                                       |  |                                            | 17     |   |                |         | 2,253         |  
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                      | Inventory                                                                                                                                   |  |                                            | 1,305  |   |                |         | 1,462         |  
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                      | Prepaid expenses                                                                                                                            |  |                                            | 2,628  |   |                |         | 2,080         |  
|                                                                                                                      |                                                                                                                                             |  |                                            |        |   |                |         |              
|                                                                                                                      |                                                                                                                                             |  | Total current assets                       |        |   | 7,618          |         |               |   | 8,889   | 
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|Property & equipment, net of accumulated depreciation of $42,766 and $34,218 at April 28, 2002 and April 29, 2001     |                                                                                                                                             |  | 71,926                                     |        |   |                | 87,204  |              
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|Intangible assets, net of accumulated amortization of $727
and $557 at April 28, 2002 and April 29, 2001 respectively |                                                                                                                                             |  | 1,935                                      |        |   |                | 2,105   |              
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|Other assets                                                                                                          |                                                                                                                                             |  | 1,875                                      |        |   |                | 2,130   |              
|                                                                                                                      |                                                                                                                                             |  |                                            |        |   |                |         |              
|                                                                                                                      |                                                                                                                                             |  | Total assets                               |        | $ | 83,354         |         |               | $ | 100,328 | 
|                                                                                                                      |                                                                                                                                             |  |                                            |        |   |                |         |              
|Liabilities and Shareholders Equity                                                                                  |                                                                                                                                             |  |                                            |        |   |                |         |              
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|Current liabilities:                                                                                                  |                                                                                                                                             |  |                                            |        |   |                |         |              
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                      | Accounts payable                                                                                                                            |  | $                                          | 1,603  |   |                | $       | 6,382         |  
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|Accrued expenses                                                                                                      |                                                                                                                                             |  | 7,220                                      |        |   |                | 8,818   |              
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                      | Restructuring accrual                                                                                                                       |  |                                            | 2,065  |   |                |         |              |  
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                      | Convertible note payable due to shareholder                                                                                                 |  |                                            |       |   |                |         | 1,500         |  
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                      | Note payable to vendor                                                                                                                      |  |                                            |       |   |                |         | 5,902         |  
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                      | Current portion of long-term debt                                                                                                           |  |                                            |       |   |                |         | 33,077        |  
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                      | Current portion of capital lease obligations                                                                                                |  |                                            |       |   |                |         | 1,013         |  
|                                                                                                                      |                                                                                                                                             |  |                                            |        |   |                |         |              
|                                                                                                                      |                                                                                                                                             |  | Total current liabilities                  |        |   | 10,888         |         |               |   | 56,692  | 
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|Long-term debt                                                                                                        |                                                                                                                                             |  |                                           |        |   |                | 1,936   |              
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|Capital lease obligations                                                                                             |                                                                                                                                             |  |                                           |        |   |                | 4,729   |              
|                                                                                                                      |                                                                                                                                             |  |                                            |        |   |                |         |              
|                                                                                                                      | Total liabilities not subject to compromise                                                                                                 |  |                                            | 10,888 |   |                |         | 63,357        |  
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|Pre-petition liabilities subject to compromise                                                                        |                                                                                                                                             |  | 54,757                                     |        |   |                |        |              
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|Gap period liabilities subject to compromise                                                                          |                                                                                                                                             |  | 2,181                                      |        |   |                |        |              
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|Shareholders equity:                                                                                                 |                                                                                                                                             |  |                                            |        |   |                |         |              
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                      | Common stock $0.03 par value. Authorized 30,000,000
shares; issued and outstanding 9,708,741 shares as of
April 28, 2002 and April 29, 2001 |  |                                            | 291    |   |                |         | 291           |  
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|Additional paid-in capital                                                                                            |                                                                                                                                             |  | 50,039                                     |        |   |                | 50,039  |              
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|Retained (deficit)                                                                                                    |                                                                                                                                             |  | (34,802                                    | )      |   |                | (13,359 | )            
|                                                                                                                      |                                                                                                                                             |  |                                            |        |   |                |         |              
|                                                                                                                      |                                                                                                                                             |  | Total shareholders equity                 |        |   | 15,528         |         |               |   | 36,971  | 
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                      |                                                                                                                                             |  | Total liabilities and shareholders equity |        | $ | 83,354         |         |               | $ | 100,328 | 
|                                                                                                                      |                                                                                                                                             |  |                                            |        |   |                |         |              

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

F-4



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##### Table of Contents






ROADHOUSE GRILL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Fifty-two Weeks Ended April 30, 2002, the Fifty-Two Weeks
Ended April 29, 2001, and the Fifty-Three Weeks Ended April 30, 2000

($ in thousands, except per share data)

|                                                                                    |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |           |        |         |  | 
|----------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | --------- | ------ | -------------- | - | -------------- | ------ | -------------- | - | --------- | ------ | ------- |  | 
|                                                                                    |                                                                                  |                                                                                           |           |        | April 28, 2002 |   | April 29, 2001 |        | April 30, 2000
|                                                                                    |                                                                                  |                                                                                           |           |        |                |   |                |        |               
|TOTAL REVENUES                                                                      |                                                                                  | $                                                                                         | 158,982   |        |                | $ | 168,055        |        |                | $ | 148,897   |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Cost of restaurant sales:                                                           |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |           |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Food and beverage                                                                |                                                                                           |           | 55,066 |                |   |                | 59,112 |                |   |           | 50,268 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Labor and benefits                                                               |                                                                                           |           | 51,817 |                |   |                | 54,059 |                |   |           | 43,512 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Occupancy and other                                                              |                                                                                           |           | 37,580 |                |   |                | 39,269 |                |   |           | 30,067 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Pre-opening expenses                                                             |                                                                                           |           | 477    |                |   |                | 2,481  |                |   |           | 2,387  |        
|                                                                                    |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |           |       
|                                                                                    |                                                                                  | Total cost of restaurant
Sales                                                            |           |        | 144,940        |   |                |        | 154,921        |   |           |        | 126,234 | 
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Depreciation and amortization                                                       |                                                                                  |                                                                                           | 8,991     |        |                |   | 10,297         |        |                |   | 8,560     |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|General and administrative expenses                                                 |                                                                                  |                                                                                           | 9,106     |        |                |   | 10,954         |        |                |   | 8,241     |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Impairment of long-lived assets                                                     |                                                                                  |                                                                                           | 7,507     |        |                |   | 3,066          |        |                |   | 0         |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Restructuring Charges                                                               |                                                                                  |                                                                                           | 5,086     |        |                |   | 0              |        |                |   | 0         |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Reorganization Items                                                                |                                                                                  |                                                                                           | 876       |        |                |   | 0              |        |                |   | 0         |       
|                                                                                    |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |           |       
|                                                                                    |                                                                                  | Total operating expenses                                                                  |           |        | 176,506        |   |                |        | 179,238        |   |           |        | 143,035 | 
|                                                                                    |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |           |       
|Operating (loss) income                                                             |                                                                                  |                                                                                           | (17,524   | )      |                |   | (11,183        | )      |                |   | 5,862     |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Other (expense) income:                                                             |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |           |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Interest expense, net                                                            |                                                                                           |           | (3,810 | )              |   |                | (3,655 | )              |   |           | (2,301 | )      
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Other, net                                                                       |                                                                                           |           | (60    | )              |   |                | 800    |                |   |           | 0      |        
|                                                                                    |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |          
|                                                                                    |                                                                                  | Total other expense                                                                       |           | (3,870 | )              |   |                | (2,855 | )              |   |           | (2,301 | )      
|                                                                                    |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |           |       
|                                                                                    |                                                                                  | (Loss) income before income
Taxes and cumulative
Effect of change in
Accounting principle |           |        | (21,394        | ) |                |        | (14,038        | ) |           |        | 3,561   | 
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                                                                  | Income tax expense                                                                        |           |        | 49             |   |                |        | 1,818          |   |           |        | 78      | 
|                                                                                    |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |           |       
|                                                                                    |                                                                                  | (Loss) income before
Cumulative change in Accounting principle                            |           |        | (21,443        | ) |                |        | (15,856        | ) |           |        | 3,483   | 
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Cumulative effect of change
In accounting principle
(net of tax benefit
of $248) |                                                                                           |           | 0      |                |   |                | 0      |                |   |           | (877   | )      
|                                                                                    |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |           |       
|Net (loss) income                                                                   |                                                                                  |                                                                                           | ($21,443  | )      |                |   | ($15,856       | )      |                | $ | 2,606     |       
|                                                                                    |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |           |       
|Basic net (loss) income per
Common share:                                           |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |           |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Basic income before
Cumulative effect of change
In accounting principle          |                                                                                           | $         | (2.21  | )              |   | $              | (1.63  | )              |   | $         | 0.36   |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Cumulative effect of change
In accounting principle                              |                                                                                           |           |        |                |   |                |        |                |   | $         | (0.09  | )      
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Basic net (loss) income per Common share:                                           |                                                                                  | $                                                                                         | (2.21     | )      |                | $ | (1.63          | )      |                | $ | 0.27      |       
|                                                                                    |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |           |       
|Diluted net (loss) income per
Common share:                                         |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |           |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Diluted income before Cumulative effect of change
In accounting principle        |                                                                                           | $         | (2.21  | )              |   | $              | (1.63  | )              |   | $         | 0.36   |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Cumulative effect of change in
Accounting principle                              |                                                                                           |           |        |                |   |                |        |                |   |           | (0.09  | )      
|                                                                                    |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |           |       
|Diluted net (loss) income per
Common share                                          |                                                                                  | $                                                                                         | (2.21     | )      |                | $ | (1.63          | )      |                | $ | 0.27      |       
|                                                                                    |                                                                                  |                                                                                           |           |        |                |   |                |        |                |   |           |       
|Weighted average common shares
Outstanding                                          |                                                                                  |                                                                                           | 9,708,741 |        |                |   | 9,708,741      |        |                |   | 9,708,741 |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Weighted average common shares
And share equivalents
Outstanding--assuming dilution |                                                                                  |                                                                                           | 9,708,741 |        |                |   | 9,708,741      |        |                |   | 9,792,019 |       

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

F-5



---



##### Table of Contents






ROADHOUSE GRILL, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
For the Fifty-Two Weeks Ended April 28, 2002, the Fifty-Two Weeks
Ended April 29, 2001, and the Fifty-Three Weeks Ended April 30, 2000

($ in thousands)

|                       |  |            |           |              |  |                 |     |                    |  |                   |  |         |  |           |  |       |  |   |        |  |  |   |         |   |         |   |        |  |         |  
|---------------------- |  | ---------- | --------- | ------------ |  | --------------- | --- | ------------------ |  | ----------------- |  | ------- |  | --------- |  | ----- |  | - | ------ |  |  | - | ------- | - | ------- | - | ------ |  | ------- | -
|                       |  |            |           | Common Stock |  | Preferred Stock |     | Additional Paid-in |  | Retained Earnings |  |         |  |          
|                       |  |            |           | Shares       |  | Amount          |     | Shares             |  | Amount            |  | Capital |  | (Deficit) |  | Total
|                       |  |            |           |              |  |                 |     |                    |  |                   |  |         |  |           |  |      
|Balance April 25, 1999 |  |            | 9,708,741 |              |  | $               | 291 |                    |  |                   |  |         |  |           |  |       |  | $ | 50,039 |  |  | $ | (109    | ) |         | $ | 50,221 | 
|                      
|                      
|                      
|                      
|                       |  | Net
income |           |              |  |                 |     |                    |  |                   |  |         |  |           |  |       |  |   |        |  |  |   |         |   | 2,606   |   |        |  | 2,606   |  
|                       |  |            |           |              |  |                 |     |                    |  |                   |  |         |  |           |  |       |  |   |        |  |  |   |         |   |         |   |        | 
|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 | 
|                       |  |            |           |              |  |                 |     |                    |  |                   |  |         |  |           |  |       |  |   |        |  |  |   |         |   |         |   |        | 

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

F-6



---



##### Table of Contents






ROADHOUSE GRILL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Fifty-Two Weeks Ended April 28, 2002, the Fifty-Two Weeks
Ended April 29, 2001, and the Fifty-Three Weeks Ended April 30, 2000

($ in thousands)

|                                                 |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |         |        |         |   | 
|------------------------------------------------ | ----------------------------------------- | -------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ------ | ------- | --------- | ----- | -------- | ------- | --------- | ---- | ------- | ------ | ------- | - | 
|                                                 |                                           |                                                                                                    |                                                     |        |         | April 28, |       | April 29 |         | April 30,
|                                                 |                                           |                                                                                                    |                                                     |        |         | 2002      |       | 2001     |         | 2000     
|                                                 |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |          
|Cash flows from operating activities             |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           | Net (loss) income from continuing operations                                                       |                                                     | $      | (21,443 | )         |       | $        | (15,856 | )         |      | $       | 2,606  |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           | Adjustments to reconcile net (loss) income
to net cash (used in) provided by operating
activities: |                                                     |        |         |           |       |          |         |           |      |         |        |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | Depreciation and amortization                       |        |         | 8,991     |       |          |         | 10,297    |      |         |        | 8,560   |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | Net Loss on sale/disposal of assets                 |        |         | 60        |       |          |         |          |      |         |        |        |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | Provision for bad debt                              |        |         | 336       |       |          |         |          |      |         |        | 83      |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | Deferred tax expense (benefit)                      |        |         |          |       |          |         | 2,394     |      |         |        | (170    | )
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | Cumulative effect of change in
accounting principle |        |         |          |       |          |         |          |      |         |        | 1,125   |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | Restructuring and Impairment of assets              |        |         | 12,593    |       |          |         | 3,066     |      |         |        |        |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | Cash used for store closings                        |        |         | (404      | )     |          |         |          |      |         |        |        |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | Reorganization Items                                |        |         | 876       |       |          |         |          |      |         |        |        |  
|                                                
|                                                
|                                                
|                                                
|Changes in assets and liabilities:               |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | Decrease (increase) in accounts receivable          |        |         | 1,037     |       |          |         | (771      | )    |         |        | 538     |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | Decrease (increase) in income tax receivable        |        |         | 2,236     |       |          |         | (2,253    | )    |         |        |        |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | Decrease (increase) in inventory                    |        |         | 157       |       |          |         | 160       |      |         |        | (441    | )
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | (Increase) Decrease in prepaid expenses             |        |         | (548      | )     |          |         | 47        |      |         |        | (1,135  | )
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | Decrease (increase) in other assets                 |        |         | 219       |       |          |         | 507       |      |         |        | 520     |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | Increase (decrease) in accounts payable             |        |         | 862       |       |          |         | (5,284    | )    |         |        | 6,974   |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | (Decrease) Increase in notes payable to vendor      |        |         | (1,117    | )     |          |         | 5,902     |      |         |        |        |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                           |                                                                                                    | Increase (decrease) increase in accrued
expenses    |        |         | 3,786     |       |          |         | 1,037     |      |         |        | 3,160   |  
|                                                 |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |        
|                                                 |                                           | Net cash provided by (used in ) operating
activities                                               |                                                     |        | 7,641   |           |       |          | (754    | )         |      |         | 21,820 |        
|                                                 |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |        
|Cash used for reorganization items               |                                           |                                                                                                    | (1,187                                              | )      |         |           |      |          |         |           |     |        
|                                                
|                                                
|                                                
|                                                
|Cash flows from investing activities             |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Payments for intangibles                  |                                                                                                    |                                                     |       |         |           |       |         |         |           |      | (404    | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Payment received from notes receivable    |                                                                                                    |                                                     |       |         |           |       | 84       |         |           |      |        |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from sale-leaseback transactions |                                                                                                    |                                                     |       |         |           |       | 7,244    |         |           |      | 5,700   |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Purchase of property and equipment        |                                                                                                    |                                                     | (2,619 | )       |           |       | (14,796  | )       |           |      | (32,500 | )     
|                                                 |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |        
|                                                 |                                           |                                                                                                    | Net cash used in investing activities               |        |         | (2,619    | )     |          |         | (7,468    | )    |         |        | (27,204 | )
|                                                 |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |        
|Cash flows from financing activities             |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from loan from related party     |                                                                                                    |                                                     |       |         |           |       | 1,500    |         |           |      |        |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from long-term debt              |                                                                                                    |                                                     |       |         |           |       | 11,123   |         |           |      | 7,196   |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Repayment of long-term debt               |                                                                                                    |                                                     | (1,448 | )       |           |       | (1,771   | )       |           |      | (1,039  | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Payments on capital lease obligations     |                                                                                                    |                                                     | (776   | )       |           |       | (1,426   | )       |           |      | (1,370  | )     
|                                                 |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |        
|                                                 |                                           |                                                                                                    | Net cash provided by financing
activities           |        |         | (2,224    | )     |          |         | 9,426     |      |         |        | 4,787   |  
|                                                 |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |        
|Increase (Decrease) in cash and cash equivalents |                                           |                                                                                                    | 1,611                                               |        |         |           | 1,204 |          |         |           | (597 | )      
|                                                
|                                                
|                                                
|                                                
|Cash and cash equivalents at beginning of
year   |                                           |                                                                                                    | 1,582                                               |        |         |           | 378   |          |         |           | 975  |        
|                                                 |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |        
|Cash and cash equivalents at end of year         |                                           | $                                                                                                  | 3,193                                               |        |         | $         | 1,582 |          |         | $         | 378  |        
|                                                 |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |        
|Supplementary disclosures:                       |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Interest paid                             |                                                                                                    | $                                                   | 2,486  |         |           | $     | 3,515    |         |           | $    | 2,782   |       
|                                                 |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |        
|                                                 | Income taxes paid                         |                                                                                                    | $                                                   | 40     |         |           | $     | 821      |         |           | $    | 923     |       
|                                                 |                                           |                                                                                                    |                                                     |        |         |           |       |          |         |           |      |        

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

F-7



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##### Table of Contents



Non-cash investing and financing activities:

During, the fifty-three weeks ended April 30, 2000, the Company entered
into four sale-leaseback transactions that have been accounted for as capital
leases for real estate in the amount of $3.6 million. No gain or loss was
deferred or recognized in connection with these transactions.




ROADHOUSE GRILL, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSApril 28, 2002, April 29, 2001, and April 30, 2000



|(1) |  | PROCEEDINGS UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
|--- |  | ---------------------------------------------------

On January 18, 2002, 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). The Company had recently experienced significant cash
flow problems primarily resulting from the opening of 31 new restaurants in the
past three years combined with a net loss of $15.9 million in fiscal year 2001
and a net loss of $20.8 million in fiscal year 2002. Prior to the filing of
the Involuntary Petition, the Company had been in negotiations with the
Petitioning Creditors and other major creditors in an effort to effect an
out-of-court restructuring.

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 the opportunity to prepare a Chapter 11 plan
of reorganization.

On April 16, 2002, the Court entered an order for relief and the Company
filed its Chapter 11 plan of reorganization and its disclosure statement in
support of the plan. Subsequent to the entry of the order for relief, the
Company has 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 whether to accept or
reject the plan of reorganization. However, the court would not permit such a
vote until it approved a disclosure statement as containing information
adequate to enable a
hypothetical reasonable investor typical of holders of claims or interests of
the relevant classes to make an informed judgment about the plan of
reorganization.

The Company filed several amendments to 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 Disclosure
Statement is attached to this Form 10-K as Exhibit 2.1. 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

F-8



---



##### Table of Contents



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. (RAI), 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
(the Modification).

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 is embodied in a term sheet between the Company
and CNL dated August 21, 2002 (the CNL Term Sheet).

The hearing on confirmation of the Plan, as modified by the Modification,
took place on August 21, 2002. At the close of the hearing, the Court
announced that the Plan, as modified by the Modification and the Confirmation
Order (as hereinafter defined) (the Confirmed Plan), 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 Confirmation Order is attached to this report on
Form 10-K as Exhibit 2.3. The Modification and CNL Term Sheet are attached as
exhibits to the Confirmation Order.

The Confirmed Plan is scheduled to become effective on or before September
30, 2002 (the Effective Date). On the Effective Date, the Company is to
receive an infusion of new capital of $5 million in exchange for 13,888,889
shares (47.53%) of new common stock in the reorganized Company (the New Common
Stock). The 13,888,889 shares will be issued in a private placement pursuant
to Section 4(2) of, or Regulation D promulgated under, the Securities Act of
1933, as amended (the Private Placement Securities). The Private Placement
Securities
will be issued to Berjaya Group (Cayman) Limited (Berjaya), Prime Gaming
Philippines, Inc. (Prime), Ayman Sabi , or designee (Sabi), and Stephen C.
Saterbo, or designee (Saterbo), as more particularly set forth in the table
immediately below. These parties have placed $5 million in escrow with the
Companys co-bankruptcy counsel, Berger Singerman, P.A.

|         |  |            |           |             |  |                  |     |           |  |  |           |  |  |               |       |  
|-------- |  | ---------- | --------- | ----------- |  | ---------------- | --- | --------- |  |  | --------- |  |  | ------------- | ----- | -
|         |  |            |           |             |  |                  |     |           |  |  |           |  |  | Percentage of
|         |  | Investment |           | Price/Share |  | Number of Shares |     | Ownership
|         |  |            |           |             |  |                  |     |          
|Berjaya  |  | $          | 3 million |             |  | $                | .36 |           |  |  | 8,333,333 |  |  |               | 28.52 | %
|        
|        
|        
|        
|Prime    |  | $          | 500,000   |             |  | $                | .36 |           |  |  | 1,388,889 |  |  |               | 4.75  | %
|        
|        
|        
|        
|Sabi*    |  | $          | 1 million |             |  | $                | .36 |           |  |  | 2,777,778 |  |  |               | 9.51  | %
|        
|        
|        
|        
|Saterbo* |  | $          | 500,000   |             |  | $                | .36 |           |  |  | 1,388,889 |  |  |               | 4.75  | %



---

|* |  | or designee
|- |  | -----------

Berjaya is the Companys majority shareholder, representing approximately
62% of the Companys common stock.

Prime is an affiliate of Berjaya. It is 58% owned by Berjaya Group
Berhad, which owns 100% of Berjaya. Prime is incorporated and headquartered in
the Philippines.

Saterbo is a senior vice president, member of the board of directors, and
substantial shareholder of Colorado Boxed Beef Company, a major supplier of the
Company.

Sabi is president, chief executive officer and a director of the Company.

F-9



---



##### Table of Contents



Pursuant to the Confirmed Plan, on the Effective Date, Berjaya will
receive, in full satisfaction of the $1.5 million loan, 4,166,667 shares of New
Common Stock at the rate of $.36 per share, representing 14.26% of the
outstanding common stock in the reorganized Company.

Under the Confirmed Plan, on the Effective Date, the 9,708,741 shares of
common stock in the Company currently outstanding (the Old Common Stock), and
any rights, options, warrants, contingent warrants, subscriptions or other
agreements and contractual rights to acquire or obtain an interest in the
shares of the Company, will be cancelled. The Confirmed Plan
provides for each holder of Old Common Stock to receive, in respect of its
shares of Old Common Stock, its ratable share of 11,175,052 shares of New
Common Stock, representing 38.24% of the stock in the reorganized Company. The
total number of shares of New Common Stock to be issued under the Confirmed
Plan is 29,220,608.

Under the Confirmed Plan, substantial payments will be required to be made
on the Effective Date to pay administrative and other priority claims as well
as amounts required to cure defaults on unexpired leases of real and personal
property and executory contracts being assumed by the Company. The Company
believes that its cash on hand together with the new equity infusion will
provide sufficient funds to make these payments.

As restructured under the Confirmed Plan, the Companys secured and
unsecured debt, as well as assumed leases and executory contracts, will require
substantial monthly payments over extended periods. The reader is referred
to the Confirmed Plan, attached to this report on Form 10K as Exhibit 2.2, for
the details of repayment of the restructured indebtedness. The Companys
ability to reorganize successfully will depend on, among other things, its
ability to meet these payment obligations. There is no assurance that the
Company will be able to do so.

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 Statement of Position 90-7 (SOP 90-7),
Financial Reporting by Entities in Reorganization under the Bankruptcy Code.
The ability of the Company to continue as a going concern is predicated upon,
among other things, consummation of the Confirmed Plan, the ability to generate
cash flow from operations and the ability to obtain financing sources
sufficient to satisfy future obligations. Please refer to Risk Factors and
Item 7. Managements Discussion and Analysis of Results of Operations and
Financial Condition for additional information.



|(2) |  | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|--- |  | ----------------------------------------------------------------------



| | (a) |  | 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 consolidated financial statements include the financial
statements of Roadhouse Grill, Inc., and its subsidiaries. All
significant intercompany balances and transactions have been eliminated
in consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| | The Company was founded in 1992 and opened its first Roadhouse Grill
restaurant in Pembroke Pines, Florida (the greater Fort Lauderdale area)
in 1993. As of April 28, 2002, there were 73 Company owned Roadhouse
Grill restaurants located in Alabama, Arkansas, Florida, Georgia,
Louisiana, Mississippi, New York, North Carolina, Ohio, and South
Carolina. Of these, 34 are located in Florida. Four of the restaurants
outside Florida were closed subsequent to April 28, 2002. The Company
also has three franchised locations in Malaysia, one franchised location
in Brasilia, Brazil, and three franchised locations in Las Vegas, Nevada.
|
| | On July 6, 2000, the Company entered into a joint venture agreement
with Cremonini S.p.A. (Cremonini Group), a publicly traded Italian
conglomerate,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

F-10



---



##### Table of Contents





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | specializing in the food service industry in Europe. Under
the joint venture agreement, the 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 by the end of the
year 2004. In 2001, the parties extended the deadline by one year until
2005 due to issues surrounding the consumption of beef in Europe in 2001.
The Company opened its first joint venture Roadhouse Grill restaurant in
Milan, Italy in November 2001.

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 it will
be able to come to an amicable resolution of any disagreements with Cremonini.
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
the Companys 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.



| | (b) |  | 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.                                                                                                                                                                                   
|
| | Depreciation is calculated using the straight-line method over the
estimated useful lives of the assets. Amortization of capitalized leased
assets is calculated using the straight-line method over the shorter of
the estimated useful life of the leased asset or the lease term.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | The Company accounts for long-lived assets in accordance with the
provisions of Statement of Financial Accounting Standards (SFAS) No.
121, Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to Be Disposed Of. This Statement requires that long-lived
assets and certain identifiable intangibles be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an
asset to 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 the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount or fair value less
costs to sell.
|
| | The Company recorded a $7.5 million charge in fiscal year 2002
compared to $3.1 million in fiscal year 2001. The asset impairment
charge in 2002 was related to 13 stores the Company closed in 2002, the
write down of assets of four stores closed subsequent to year end, and
one additional store scheduled to be closed. The asset impairment charge
taken in 2001 was related to the impairment of assets at four of the 13
stores closed in 2002. The asset impairment charge in both years was
based on SFAS No. 121 (Accounting for Impairment of Long-lived Assets and
for Long-Lived Assets to be Disposed of).                                                                                                                                                                                                                                                                                                                                       
|
| | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

F-11



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##### Table of Contents





| |                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------
| | years beginning after December 15, 2001. Management believes the impact
of this pronouncement on its operations, if any, will not be material.



| | (c) |  | INTANGIBLE ASSETS
| | --- |  | -----------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Intangible assets consist primarily of goodwill recorded as a result
of restaurant acquisitions and are being amortized on a straight-line
basis over 16-17 years, the lease terms of the respective restaurant
properties. The Company evaluates whether changes have occurred that
would require revision of the remaining estimated useful life of the
assigned goodwill or render goodwill not recoverable. If such
circumstances arise, the Company uses undiscounted future cash flows to
determine whether the goodwill is recoverable.



| | (d) |  | CASH AND CASH EQUIVALENTS
| | --- |  | -------------------------



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



| | (e) |  | INVENTORY
| | --- |  | ---------



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



| | (f) |  | 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.



| | (g) |  | PRE-OPENING COSTS
| | --- |  | -----------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Pre-opening costs are costs incurred in the opening of new stores
(primarily payroll costs). During the first quarter of fiscal year 2000,
the Company adopted the provisions of Statement of Position 98-5,
Reporting for the Costs of Start-up Activities, which requires that
pre-opening costs be expensed as incurred. Previously, the Company
amortized pre-opening costs over a twelve-month period. The cumulative
effect of the change was $877,000, net of taxes. Deferred costs related
to sites subsequently determined to be unsatisfactory and general site
selection costs which cannot be identified with a specific restaurant are
charged to operations.



| | (h) |  | FISCAL YEAR
| | --- |  | -----------



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



| | (i) |  | 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 from those estimates.

F-12



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##### Table of Contents





| |                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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, as well as the time interval that will
be required to dispose of those assets. Actual results could be
materially different.



| | (j) |  | 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 28,
2002 and April 29, 2001 approximate fair value.



| | (k) |  | 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.                                                                                                                                                                     



| | (l) |  | ADVERTISING COSTS
| | --- |  | -----------------



| |                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company expenses all advertising costs as incurred. Advertising
expense for the fifty-two weeks ended April 28, 2002, the fifty-two weeks
ended April 29, 2001 and the fifty-three weeks ended April 30, 2000 was
$2.6 million, $3.5 million, $4.4 million, respectively.



| |                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------
| | Advertising expense is included within occupancy and other in the
accompanying consolidated statements of operations.



| | (m) |  | NEW ACCOUNTING STANDARDS
| | --- |  | ------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In June 2001, the Financial Accounting Standards Board (FASB) issued
SFAS No. 141, Business Combinations, and No. 142, Goodwill and Other
Intangible Assets, effective for fiscal years beginning after
Dec. 15,
2001. 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 Statement No. 141 effective June 30, 2001. This statement
had no impact on the Company. The Company implemented Statement No. 142
effective April 28, 2002. Management believes that the impact of this
pronouncement on its operations, if any, will not be material.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As of April 28, 2002, the Company had unamortized goodwill in the
amount of $1,527,596, and unamortized identifiable intangible assets in
the amount of $407,235, all of which will be subject to the transition
provisions of Statements 141 and 142. Amortization expense related to
goodwill was $133,031 for the year ended April 28, 2002. Because of the
extensive effort needed to comply with adopting Statements 141 and 142,
it is not practicable to reasonably estimate the impact of adopting these
Statements on the Companys financial statements at the date of this
report, including whether it will be required to recognize any
transitional impairment losses as the cumulative effect of a change in
accounting principle.

F-13



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##### Table of Contents





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In August 2001, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (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.
Management believes the impact of this pronouncement on its operations,
if any, will not be material.



| | (n) |  | STOCK BASED COMPENSATION
| | --- |  | ------------------------



| |                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company accounts for stock options as prescribed by Accounting
Principles Board Opinion No. 25 and includes pro forma information in the
stock options note, as provided by Statement of Financial Accounting
Standards (SFAS) No. 123, Accounting for Stock-Based Compensation.



|(3) |  | SUBSEQUENT EVENTS
|--- |  | -----------------

In May 2002, subsequent to the Companys fiscal year end, four
unprofitable restaurants were closed. One of these was in Louisiana, one was
in Ohio, and two were in North Carolina. Asset impairment and restructuring
charges were recorded as of April 28, 2002, as discussed below.



|(4) |  | ASSET IMPAIRMENT AND RESTRUCTURING CHARGES
|--- |  | ------------------------------------------

As discussed above, in September of 2001 the Company closed one
unprofitable restaurant. In October of 2001, the Company made the decision to
close and sell thirteen additional unprofitable restaurants. All but one of
those restaurants was closed by November 12, 2001. The remaining restaurant is
expected to be closed by the end of the third quarter of fiscal 2003. The
Company recorded a $5.8 million asset impairment/restructure charge in the
second quarter of fiscal year 2002. During the fourth quarter the Company
revised its impairment/restructure charge for the 13 stores which were closed
in the second quarter, from $5.8 million to $9.6 million. Also in the fourth
quarter the Company accrued for the asset impairment/restructure charge for
four additional stores that were closed subsequent to April 28, 2002 and two
undeveloped sites. The Companys management made the decision to close these
four stores and the decision not to build on two undeveloped sites in the
fourth quarter of fiscal year 2002. However, the actual closing of the stores
took place subsequent to the fiscal year end. The asset impairment/restructure
charge relating to these four stores and the exit of two undeveloped sites
amounted to $3.0 million.

In accordance with APB Opinion 16, Emerging Issues Task Force (EITF) Issue
94-3 Liability Recognized for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (Including Certain Cost Incurred in a Restructuring)
and SFAS No. 121, Accounting for the Impairment of Long Lived Assets and for
Long Lived Assets to be Disposed of, the Company recorded a charge to
operating expense of $5.8 million in the second quarter of fiscal year 2002.
During the fourth quarter the Company revised its impairment/restructure charge
for 13 stores which were closed in the second quarter from $5.8 million to $9.6
million and recorded an additional asset impairment/restructure charge of $3.0
million for the four stores closed and the exit of two undeveloped sites
subsequent to year end.

The following is a summary of the significant components of the Companys charge:

(In Millions)

|                                       |  |   |      | 
|-------------------------------------- |  | - | ---- | 
|Asset Impairment                       |  | $ | 7.5  | 
|                                      
|                                      
|                                      
|                                      
|Loss on Rejection of Lease Commitments |  |   | 3.8  | 
|                                      
|                                      
|                                      
|                                      
|Lease Payments                         |  |   | 1.1  | 
|                                      
|                                      
|                                      
|                                      
|Bank and Other Charges                 |  |   | 0.2  | 
|                                       |  |   |      | 
|Total                                  |  | $ | 12.6 | 

Asset Impairment includes the estimated loss on the sale of the eighteen
locations. In the

F-14



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##### Table of Contents



case of the five mortgage sites and the six sites on which
the Company has a ground lease and has 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 bankruptcy.

Lease payments represent the value of anticipated lease payments until all
of the real estate leased assets are sold. The Company estimates the charge to
be approximately $1.1 million.

Bank and other charges included the cost to restructure all of the
Companys debt with Finova and other fees associated with the restructure plan
including legal fees, loan documentation fees and any other fees. Other
represents all of the other costs related to shut down of the locations
including travel expense, the cost to relocate the food inventory and equipment
to other locations and other miscellaneous costs. The Company estimates these
costs will be approximately $0.2 million.

The following is a summary of the activity in the Companys accrual for restructuring charges.

|                                       |       |         |     |                    |  |                        |      |         |   |  |     |     |  | 
|-------------------------------------- | ----- | ------- | --- | ------------------ |  | ---------------------- | ---- | ------- | - |  | --- | --- |  | 
|                                       |       |         |     | Restructure        |  | Paid During the Fiscal |      | Balance
|(In Millions)                          |       | Charges |     | Year ended 4/28/02 |  | 4/28/02               
|                                       |       |         |     |                    |  |                       
|Loss
on Rejection of Lease Commitments |       |         | 3.8 |                    |  |                        |     |         |   |  | 3.8 |    
|                                      
|                                      
|                                      
|                                      
|Lease Payments                         |       |         | 1.1 |                    |  |                        | (0.4 | )       |   |  | 0.7 |    
|                                      
|                                      
|                                      
|                                      
|Bank and other charges                 |       |         | 0.2 |                    |  |                        | (0.0 | )       |   |  | 0.2 |    
|                                       |       |         |     |                    |  |                        |      |         |   |  |    
|                                       | Total |         |     | 5.1                |  |                        |      | (0.4    | ) |  |     | 4.7 | 

The activity in the restructuring accrual included payments made for land and
buildings.

The $4.7 million ending accrual includes $2.6 million in liabilities subject to
compromise.



|(5) |  | EMPLOYEE SEVERANCE
|--- |  | ------------------

During the second quarter of fiscal year 2002 the Company paid
approximately $17,000 in severance pay to restaurant managers who lost their
jobs because of store closings. A total of 678 employees were terminated due
to store closings in fiscal year 2002.



|(6) |  | LIQUIDITY
|--- |  | ---------

The Companys material financial commitments relate principally to its
working capital requirements and its obligations to make capital lease and term
loan payments, monthly interest payments on its various loans and lease
payments pursuant to certain real property leases. In addition, capital
requirements relating to the opening of new restaurants have been significant.

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 is being restructured as a result of the Confirmed
Plan.

The Company has experienced significant cash flow problems primarily due
to the Company opening 31 new restaurants in the past 36 months. The Company
believes that its ability to generate cash from operations is dependent upon,
among other things, increased demand, restructuring its operations to minimize
cash expenditures and the successful development of marketing strategies. The
Company has implemented revenue enhancement programs 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
previously incurred liabilities and current operations.

F-15



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##### Table of Contents



If cash generated from the Companys operations are insufficient to fund
the Companys financial commitments and previous losses, and support the
Companys continued growth, the Company will have to obtain additional
financing. There can be no guarantee or assurance that additional financing
will be available on terms acceptable to the Company, if ever. In the event
the Company is unable to secure such additional financing, the Company may
have to significantly curtail its operations.

Capital requirements relating to the implementation of the Companys
business plan have been and will continue to be significant.



|(7) |  | REORGANIZATION ITEMS
|--- |  | --------------------

Reorganization items represent amounts incurred as a result of the Chapter
11 proceedings in accordance with SOP 90-7. The amount for reorganization
items in the Consolidated Statement of Operations is approximately $876,000.
This includes approximately $587,000, $50,000, $238,000, and $1,000 for legal,
accounting, consulting, and outside services, respectively.



|(8) |  | INTEREST ON PRE-PETITION DEBT
|--- |  | -----------------------------

Included in the line Interest Expense, Net, in the Consolidated Statements
of Operations is interest expense of $3.8 million, $3.7 million, and $2.5
million for fiscal years 2002, 2001, and 2000, 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.



|(9) |  | PROPERTY AND EQUIPMENT
|--- |  | ----------------------

Property and equipment, net consist of the following:

|                               |  |                  |         |                |  |              |         |   |  |            |  | 
|------------------------------ |  | ---------------- | ------- | -------------- |  | ------------ | ------- | - |  | ---------- |  | 
|                               |  | ($ In thousands) |         |                |  |             
|                               |  |                  |         |                |  |              |         |   |  | Estimated 
|                               |  | April 28, 2002   |         | April 29, 2001 |  | Useful Lives
|                               |  |                  |         |                |  |             
|Building                       |  | $                | 21,815  |                |  | $            | 21,351  |   |  | 20 years  
|                              
|                              
|                              
|                              
|Land                           |  |                  | 15,066  |                |  |              | 14,777  |   |  |            |  | 
|                              
|                              
|                              
|                              
|Furniture and equipment        |  |                  | 26,101  |                |  |              | 26,604  |   |  | 3-7 years 
|                              
|                              
|                              
|                              
|Leasehold improvements         |  |                  | 50,181  |                |  |              | 53,738  |   |  | 7-20 years
|                               |  |                  |         |                |  |              |         |   |  |            |  | 
|                               |  |                  | 113,163 |                |  |              | 116,470 |   |  |            |  | 
|                              
|                              
|                              
|                              
|Less: accumulated depreciation |  |                  | (42,766 | )              |  |              | (34,218 | ) |  |            |  | 
|                               |  |                  |         |                |  |              |         |   |  |            |  | 
|                               |  |                  | 70,397  |                |  |              | 82,252  |   |  |            |  | 
|                              
|                              
|                              
|                              
|Construction in progress       |  |                  | 1,529   |                |  |              | 4,952   |   |  |            |  | 
|                               |  |                  |         |                |  |              |         |   |  |            |  | 
|                               |  | $                | 71,926  |                |  | $            | 87,204  |   |  |            |  | 
|                               |  |                  |         |                |  |              |         |   |  |            |  | 

Included in property and equipment are buildings and equipment under
capital leases of $8.7 million and $9.2 million at April 28, 2002 and April 29,
2001, respectively. The company did not capitalize any interest costs during
Fiscal Year 2002. The Company capitalized interest costs of approximately,
$346,000 and $416,000 during Fiscal Year 2001 and 2000, respectively, relating
to qualifying construction projects.



|(10) |  | CAPITAL LEASES
|---- |  | --------------

The following is a schedule of future minimum lease payments required
under capital leases as of April 28, 2002:

|                 |  |   |       | 
|---------------- |  | - | ----- | 
|($ in thousands)
|2003             |  | $ | 1,146 | 
|                
|                
|                
|                
|2004             |  |   | 806   | 
|                
|                
|                
|                
|2005             |  |   | 640   | 

F-16



---



##### Table of Contents



|                                                                                         |  |  |        |  
|---------------------------------------------------------------------------------------- |  |  | ------ | -
|($ in thousands)                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|2006                                                                                     |  |  | 449    |  
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|2007                                                                                     |  |  | 452    |  
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|Thereafter                                                                               |  |  | 2,176  |  
|                                                                                         |  |  |        |  
|Total minimum lease payments                                                             |  |  | 5,669  |  
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|Less: amount representing interest at varying rates
ranging from 9 percent to 16 percent |  |  | (1,759 | )
|                                                                                         |  |  |        |  
|Present value of net minimum capital lease payments (See Note 14)                        |  |  | 3,910  |  
|                                                                                        
|                                                                                        
|                                                                                        
|                                                                                        
|Less: current portion of capital lease obligations                                       |  |  | 1,146  |  
|                                                                                         |  |  |        |  
|Minimum capital lease obligations excluding current portion                              |  |  | 2,764  |  
|                                                                                         |  |  |        |  

The gross amount of assets under capital lease as of April 28, 2002 was
$8.7 million, and accumulated depreciation on these assets was $5.9 million.

The gross amount of assets under capital lease as of April 29,2001 was
$9.2 million, and accumulated depreciation on these assets was $4.9 million.

Included in the minimum lease payments is approximately $547,000, which is
the settlement amount of one rejected lease.



|(11) |  | OPERATING LEASES
|---- |  | ----------------

The Company leases the majority of its restaurant facilities. The lease
terms range from 5 to 20 years and generally provide for renewal options to
extend the lease term.

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 28, 2002:

|                             |  |                  |        | 
|---------------------------- |  | ---------------- | ------ | 
|                             |  | ($ in thousands)
|2003                         |  | $                | 6,797  | 
|                            
|                            
|                            
|                            
|2004                         |  |                  | 6,550  | 
|                            
|                            
|                            
|                            
|2005                         |  |                  | 6,473  | 
|                            
|                            
|                            
|                            
|2006                         |  |                  | 6,259  | 
|                            
|                            
|                            
|                            
|2007                         |  |                  | 7,045  | 
|                            
|                            
|                            
|                            
|Thereafter                   |  |                  | 32,221 | 
|                             |  |                  |        | 
|Total minimum lease payments |  | $                | 65,345 | 
|                             |  |                  |        | 

The total rent expense for operating leases was $12.1 million, $11.0
million and $6.0 million, for Fiscal Year 2002, Fiscal Year 2001, and Fiscal
Year 2000, respectively.

Included in the minimum lease payments is approximately $3.8 million,
which is the settlement amount of rejected operating leases.

The Company leases a portion of its Corporate headquarters and has
collected rent in the amounts of $195,000, $9,000, and $0 for fiscal 2002,
2001, and 2000, respectively. During Fiscal Year 2002, the Company did not enter into any new
sale-leaseback transactions.

During Fiscal Year 2001, the Company entered into thirteen 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.

The Company had a $10.0 million sale-leaseback credit facility available
with CNL Fund Advisors (CNL) that expired in January 2001. The credit
facility with CNL was available for the development of new Roadhouse Grill
restaurants.

During Fiscal Year 2000, the Company entered into agreements for the sale
and leaseback of certain restaurant equipment for a period of 60 months, which
were recorded as operating leases. The equipment was sold at book value of
approximately $5.7 million.

F-17



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##### Table of Contents



During Fiscal Year 2000, the Company amended various sale-leaseback
agreements it had with Franchise Finance Corporation of America (FFCA) and
CNL. The amended sale-leaseback agreements were then treated as operating
leases as of the effective date of the amendment. As a result of this
amendment, approximately $4.9 million in property and equipment and $5.1
million in capital lease debt were removed from the balance sheet and a gain of
approximately $179,000 was recognized in the accompanying consolidated
statement of operations.

The Company had a $18.5 million sale-leaseback credit facility with
Franchise Finance Corporation of America (FFCA) for the development of new
Roadhouse Grill restaurants that expired in December 2001.



|(12) |  | LONG-TERM DEBT
|---- |  | --------------

A summary of long-term debt, as of April 28, 2002 and April 29, 2001,
respectively, follows:

|                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |      |         |      |  |   |        | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------ | 
|($ in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                              |  | 2002 |         | 2001
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Loan payable to Finova Capital Corporation in the principal amount of $15.0
million; interest payable at 9.55%; principal and interest payable in equal
consecutive monthly installments of $157,087 each through
October 1, 2012.
The facility consists of a 15-year term loan collateralized by real
estate.                                                                                                                                |  |      | $12,293 |      |  | $ | 13,077 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Loan payable to Finova Capital Corporation in the principal amount of $2.9
million; interest payable at 8.96%; principal and interest payable in equal
consecutive monthly installments of $36,420 each through April 2008. The
facility consists of a 10-year loan collateralized by personal property and
fixtures at four Company owned-restaurants.                                                                                       |  |      | 2,147   |      |  |   | 2,247  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Note payable to First Union National Bank in the principal amount of $1.7
million; interest payable at one-month LIBOR rate plus 1.90%; principal and
interest payable in consecutive monthly installments through
March 1, 2004.
The loan is a 5-year term loan collateralized by personal property and
fixtures at the Companys new corporate facility.                                                                                    |  |      | 1,580   |      |  |   | 1,652  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Master Security Agreement with Pacific Financial Company for two 5-year term
loans in the principal amount of $881,987; interest payable at 10.74%;
principal and interest payable in equal consecutive monthly
installments of $17,566 through February 2004. There is a principal balloon
payment of $88,199 due at the end of the term. The loans are
collateralized by personal property and fixtures at three Company-owned
restaurants. |  |      | 452     |      |  |   | 564    | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Loan payable to First Union National Bank in the principal amount of $1.3
million; principal and interest payable in consecutive monthly installments
through May 1, 2010. The loan was originally short-term in nature, as a
120-day promissory note. However, this note was refinanced to a 10-year
loan with the interest payable at one-month LIBOR rate plus 1.75%.                                                                      |  |      | 1,129   |      |  |   | 1,254  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Working Capital Line of Credit payable to Finova Capital Corporation in the
principal amount of $5 million; interest payable at prime rate plus 2%;
principal balloon payments of $1.0 million, $2.0 million, $1.0 million, and
$1.0 million due November 15, 2001, October 28, 2001, December 9, 2001 and
January 13, 2002, respectively, interest payable on a monthly
basis.                                                               |  |      | 5,000   |      |  |   | 5,000  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Note payable to Finova in the principal amount of $1.196 million; interest
payable at 10.11%; principal and interest payable in equal consecutive
monthly installments of $14,366 through May 1, 2012.                                                                                                                                                                                                                                        |  |      | 1,107   |      |  |   | 1,146  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Note payable to Finova in the principal amount of $920,087; interest
payable at 10.11%; principal and interest payable in equal consecutive
monthly installments of $11,054 through May 1, 2012.                                                                                                                                                                                                                                              |  |      | 864     |      |  |   | 882    | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Note payable to Finova in the principal amount of $931,591; interest
payable at 10.33%; principal and interest payable in equal consecutive
monthly installments of $11,311 through June 1, 2012.                                                                                                                                                                                                                                             |  |      | 867     |      |  |   | 897    | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Note payable to Finova in the principal amount of $972,023; interest
payable at 10.49%; principal and interest payable in equal consecutive
monthly installments of $11,893 through June 1, 2012.                                                                                                                                                                                                                                             |  |      | 905     |      |  |   | 937    | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Note payable to Finova in the principal amount of $1.186 million; interest
payable at 10.53%; principal and interest payable in equal consecutive
monthly installments of $14,537 through June 1, 2012.                                                                                                                                                                                                                                       |  |      | 1,105   |      |  |   | 1,143  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Note payable to Finova in the principal amount of $828,572; interest
payable at 9.89%; principal and interest payable in equal consecutive
monthly installments of $9,849 through September 1, 2012.                                                                                                                                                                                                                                          |  |      | 791     |      |  |   | 807    | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Note payable to Finova in the principal amount of $1.239 million; interest
payable at 9.74%; principal and interest payable in equal consecutive
monthly installments of $14,616 through November 1, 2012.                                                                                                                                                                                                                                    |  |      | 1,175   |      |  |   | 1,215  | 

F-18



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##### Table of Contents



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |      |        |      |  |   |        | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|($ in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | 2002 |        | 2001
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Note payable to Finova in the principal amount of $1.329 million; interest
payable at 9.74%; principal and interest payable in equal consecutive
monthly installments of $15,685 through November 1, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |      | 1,261  |      |  |   | 1,304  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Note payable to FFCA Acquisition Corp. in the principal amount of $1.850
million; interest accrues from the date of the note to the Initial Change
Date
as defined, at LIBOR plus 4 percent; and from the Initial Change Date and
on
the first day of each month thereafter, interest accrues at the sum of
LIBOR
plus 4 percent and then LIBOR variable, as defined all outstanding amounts
as of the date of completion of the Port Richey facility payable in
monthly installments beginning the first day of the month immediately
following
the month in which the final disbursement under the Note occurs and shall
continue over a period of twenty years.                                                                                                                                             |  |      | 1,445  |      |  |   | 1,445  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Note payable to FFCA Acquisition Corp. in the principal amount of $1.625
million; interest accrues at Libor plus 5.25 percent (10.31 percent at
April 30, 2001); all outstanding amounts as of the date of completion of the
Titusville facility shall be payable in monthly installments beginning the
first day of the month immediately following the month in the final
disbursement under the Note occurs and shall continue over a period
of twenty years. This debt recorded in Fiscal Year 2001 was a temporary
construction loan for which only interest was paid. In Fiscal Year 2002
it was converted to an operating lease. As a result, the debt, along with
the related land and building, were removed from the balance sheet in
Fiscal Year 2002. There was no P&L impact in Fiscal Year 2002. |  |      |       |      |  |   | 1,443  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Note payable to FFCA Acquisition Corp. in the principal amount of $971,320;
interest payable of LIBOR plus 4%; all outstanding amounts as of the date
of completion of the Weston facility shall be payable in monthly
installments beginning the first day of the month immediately following the
month in the final disbursement under the Note occurs and shall continue
over a period of twenty years.                                                                                                                                                                                                                                                                                                                                                                                                     |  |      | 971    |      |  |   |       | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |      |        |      |  |   |        | 
|Total long-term debt obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |      | 33,092 |      |  |   | 35,013 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Less current installments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |      | 33,092 |      |  |   | 33,077 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |      |        |      |  |   |        | 
|Long-term debt, net of current installments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | $    |       |      |  | $ | 1,936  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |      |        |      |  |   |        | 

The carrying amount of assets used as collateral was approximately $36.1
million and $46.3 million at April 28, 2002 and April 29, 2001, respectively.

The Company had a $10.0 million sale-leaseback credit facility available
with CNL that expired in January 2001.

During Fiscal Year 2000, the Company entered into agreements for the sale
and leaseback of certain restaurant equipment for a period of 60 months, which
were recorded as operating leases. The equipment was sold at book value of
approximately $5.7 million.

During Fiscal Year 2000, the Company amended various sale-leaseback
agreements it had with FFCA and CNL. The amended sale-leaseback agreements
were then treated as operating leases as of the effective date of the
amendment. As a result of this amendment, approximately $4.9 million in
property and equipment and $5.1 million in capital lease debt were removed from
the balance sheet and a gain of approximately $179,000 was recognized in the
accompanying consolidated statement of operations.

The Company had a $18.5 million sale-leaseback credit facility with FFCA
for the development of new Roadhouse Grill restaurants that expired in December
2001.

During Fiscal Year 2002, the Company did not enter into any new
sale-leaseback transactions.



|(13) |  | NOTES PAYABLE
|---- |  | -------------

On February 14, 2001, Berjaya (which owns approximately 62% of the
Companys common stock) loaned the Company $1.5 million. The loan is evidenced
by a promissory note which bears interest at 10% per annum, is payable by the
Company on demand at any time after August 14, 2001, and is collateralized by
intellectual property and certain unencumbered real and personal property.
Pursuant to the Confirmed Plan, on the Effective Date, Berjaya will receive, in
full satisfaction of the $1.5 million loan, 4,166,667 shares of New Common
Stock at the rate

F-19



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##### Table of Contents



of $.36 per share, representing 14.26% of the outstanding
common stock in the reorganized Company.

Due to the Companys liquidity problems, on February 21, 2001, the Company
issued two notes for an aggregate amount of $5.9 million to Colorado Boxed Beef
Company (CBBC), the Companys then principal food supplier, for trade
payables. The notes were to bear interest at 9.5%. The note for $4.4 million
was due no earlier than 180 days from the date of the note. The $1.5 million
note matured on April 21, 2001. The Company was unable to make the $1.5
million payment on April 21, 2001. In July 2001, CBBC agreed to restructure
the notes. Under the new terms of the notes, the Company paid CBBC $200,000 in
July 2001. The Company was also required to pay CBBC an additional $1.0
million on or before September 30, 2001. If the $1.0 million payment was made,
the notes were to be amortized over 48 months bearing interest at 11.5%. The
notes were to be secured by the unencumbered fixed assets of 17 restaurant
locations. In September 2001, the Company paid CBBC approximately $0.6 million
but was unable to pay the additional $0.4 million required by the two new
notes. The Company is currently working with CBBC to restructure the term of
the notes. As of April 28, 2002, the Company owed CBBC approximately $5.3
million. This debt is being restructured as a result of the Confirmed Plan.

In April 2001, the Company agreed to a payment plan with Tinsley
Advertising and Marketing Inc. (Tinsley) for the $1.7 million due to Tinsley
for advertising services previously provided by Tinsley to the Company.
Pursuant to the terms of the repayment plan, the Company paid Tinsley $50,000
seven days after the date of the note and was obligated to pay Tinsley $20,000
a week from April 1, 2001 through August 31, 2001 and $40,000 per week
thereafter until the debt is paid in full. In November of 2001, Tinsley and
the Company modified the agreement. The Company was then required to pay
$18,000 per week until the debt is fully satisfied. In February of 2002, the
agreement was modified again. The new agreement reduced the weekly payments to
$12,000 per week. The Company is currently working with Tinsley to restructure
the term of the note. As of April 28, 2002, the Company owed Tinsley
approximately $0.7 million. This debt is being restructured as a result of the
Confirmed Plan.



|(14) |  | 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.

Pursuant to an order of the Court notices were mailed to all known
creditors that the deadline for filing proofs of claim with the Court was July
31, 2002. Amounts that have been recorded may be different than amounts filed
by creditors; any such adjustments will be recorded in the fiscal quarter
following confirmation of the Plan. The number and amount of allowed claims
cannot be presently ascertained.

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.

|                              |  |  |        | 
|----------------------------- |  |  | ------ | 
|Accounts Payable              |  |  | 3,801  | 
|                             
|                             
|                             
|                             
|Accrued Expenses              |  |  | 5,043  | 
|                             
|                             
|                             
|                             
|Accrued Restructuring Charges |  |  | 2,626  | 
|                             
|                             
|                             
|                             
|Note Payable Shareholder      |  |  | 1,500  | 
|                             
|                             
|                             
|                             
|Short Term Notes Payable      |  |  | 4,785  | 
|                             
|                             
|                             
|                             
|Long Term Debt                |  |  | 33,092 | 
|                             
|                             
|                             
|                             
|Capital Lease Debt            |  |  | 3,910  | 
|                              |  |  |        | 
|Total                         |  |  | 54,757 | 

F-20



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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.

|                 |  |  |       | 
|---------------- |  |  | ----- | 
|Accounts Payable |  |  | 1,840 | 
|                
|                
|                
|                
|Accrued Expenses |  |  | 341   | 
|                
|                
|                
|                
|Total            |  |  | 2,181 | 



|(15) |  | 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 remain outstanding as of April 28,
2002. These options vest over a three-year period from the date of
grant and are exercisable for a period of ten years after grant. The options
were granted at fair market value on the date of grant.

In February 1998, options were granted to the President and Chief
Executive Officer, the general counsel and a consultant of the Company to
purchase 300,000 shares of the authorized, but unissued shares of common stock
at a purchase price of $3.50 per share. According to the terms of the
agreement (the Agreement), these options vested as follows: 100,000 vested at
the date of grant, 100,000 vested upon attainment and maintenance of an average
closing price for the Companys common stock, over a ten day period, of at
least $6.50 per share, and the final 100,000 vested upon attainment and
maintenance of an average closing price for the Companys common stock, over a
ten day period, of at least $9.50 per share. The Agreement was later amended
(effective as of the grant date) with respect to the vesting schedule and the
general counsel and consultant became employees of the Company. According to
the terms of the amended agreement, all the options vest at the date of grant.
The options are exercisable for a period of ten years after grant. In
addition, the Company granted options to purchase 15,000 shares of common
stock, at $3.50 per share, to the family of Tan Kim Poh, deceased former
Chairman of the Board of Directors of the Company. These options were all
granted outside the Plan. No compensation expense was recorded as a result of
these issuances during Fiscal Year 2002, Fiscal Year 2001 or Fiscal Year 2000.
The options were granted at fair market value on the date of grant.

On December 16, 1998, the Company adopted the 1998 Omnibus Stock Option
Plan (the 1998 Plan). The 1998 Plan was adopted for employees, key
executives and directors of the Company, and options to purchase 324,500 shares
of common stock at an exercise price of $6.00 per share were granted by the
Company. Of these options, 118,000 options vest over a three-year period from
December 16, 1998, and are exercisable for a period of ten years after the date
of grant. The remaining 206,500 options vest over a three-year period
beginning on December 16, 1999, and are exercisable for a period of ten years
after the date of grant. The Company did not recognize compensation expense
related to the issuance of these options due to issuance at fair market value.

On November 4, 1999, the Companys Shareholders voted to amend the 1998
Omnibus Stock Option Plan whereby the number of shares issuable under the plan
increased from 236,000 to 436,000.

At April 28, 2002, there were 419,971 additional shares available for
grant under the Original Plan and the 1998 Plan. No stock options were granted
during Fiscal Year 2002 or Fiscal Year 2001. The weighted average fair value
of stock options granted during Fiscal Year 2000 was as follows using the
Black-Scholes option-pricing model with the following weighted average
assumptions:

F-21



---



##### Table of Contents



|                            |  |                |      |  
|--------------------------- |  | -------------- | ---- | -
|                            |  | Fifty-Three   
|                            |  | Weeks Ended   
|                            |  | April 30, 2000
|                            |  |               
|Weighted average fair value |  | $              | 3.81 |  
|                           
|                           
|                           
|                           
|Expected dividend yield     |  |                | 0.0  | %
|                           
|                           
|                           
|                           
|Risk-free interest rate     |  |                | 5.2  | %
|                           
|                           
|                           
|                           
|Historical volatility       |  |                | 70   | %
|                           
|                           
|                           
|                           
|Expected life               |  | 5 years       

There were no options issued during Fiscal 2002 or Fiscal 2001. On
February 11, 1997, the Board of Directors authorized a repricing program for
the Original Plan which allowed employees to elect to reprice all of their
outstanding options to purchase common stock of the Company, granted under the
Stock Option Agreement dated May 1, 1996. Effective February 11, 1997, the
employees stock options were repriced to $6.75 per share and registered with
the Securities and Exchange Commission (the SEC) effective July 2, 1997.

The Company applies Accounting Principles Board Opinion No. 25 Accounting
for Stock Issued to Employees, in accounting for its Plans and, accordingly,
recognized compensation expense for certain options, as discussed above. 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:

|                                    |             |  |                                         |         |                |  |                |         |   |  |   |       | 
|----------------------------------- | ----------- |  | --------------------------------------- | ------- | -------------- |  | -------------- | ------- | - |  | - | ----- | 
|                                    |             |  | ($ in thousands, except per share data)
|                                    |             |  | Fifty-Two                               |         | Fifty-Two      |  | Fifty-Three   
|                                    |             |  | Weeks Ended                             |         | Weeks Ended    |  | Weeks Ended   
|                                    |             |  | April 28, 2002                          |         | April 29, 2001 |  | April 30, 2000
|                                    |             |  |                                         |         |                |  |               
|Net (loss) income                   |             |  |                                         |         |                |  |                |         |   |  |   |      
|                                   
|                                   
|                                   
|                                   
|                                    | As reported |  | $                                       | (21,443 | )              |  | $              | (15,856 | ) |  | $ | 2,606 | 
|                                   
|                                   
|                                   
|                                   
|                                    | Pro forma   |  |                                         | (21,443 | )              |  |                | (16,262 | ) |  |   | 2,485 | 
|                                   
|                                   
|                                   
|                                   
|Basic net (loss) income
per share   |             |  |                                         |         |                |  |                |         |   |  |   |      
|                                   
|                                   
|                                   
|                                   
|                                    | As reported |  | $                                       | (2.21   | )              |  | $              | (1.63   | ) |  | $ | 0.27  | 
|                                   
|                                   
|                                   
|                                   
|                                    | Pro forma   |  |                                         | (2.21   | )              |  |                | (1.67   | ) |  |   | 0.26  | 
|                                   
|                                   
|                                   
|                                   
|Diluted net (loss) income
per share |             |  |                                         |         |                |  |                |         |   |  |   |      
|                                   
|                                   
|                                   
|                                   
|                                    | As reported |  | $                                       | (2.13   | )              |  | $              | (1.63   | ) |  | $ | 0.27  | 
|                                   
|                                   
|                                   
|                                   
|                                    | Pro forma   |  |                                         | (2.13   | )              |  |                | (1.67   | ) |  |   | 0.25  | 

Pro forma net (loss) income reflects only options granted during Fiscal
Year 2000 and Fiscal Year 1999. 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.

F-22



---



##### Table of Contents



Stock option activity during the periods indicated is as follows:

|                          |           |  |           |          |                  |  |      |      | 
|------------------------- | --------- |  | --------- | -------- | ---------------- |  | ---- | ---- | 
|                          |           |  | Number of |          | Weighted Average
|                          |           |  | Shares    |          | Exercise Price  
|                          |           |  |           |          |                 
|Balance at April 25, 1999 |           |  | 828,957   |          |                  |  | 5.25 |     
|                         
|                         
|                         
|                         
|                          | Granted   |  |           | 55,505   |                  |  |      | 6.00 | 
|                         
|                         
|                         
|                         
|                          | Exercised |  |           |         |                  |  |      |     | 
|                         
|                         
|                         
|                         
|                          | Forfeited |  |           | (58,767  | )                |  |      | 6.27 | 
|                         
|                         
|                         
|                         
|                          | Expired   |  |           |         |                  |  |      |     | 
|                         
|                         
|                         
|                         
|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 |     

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 April 29, 2001, the range of exercise prices and weighted average
remaining contractual life of outstanding options was $3.50 to $7.50 and 6.8
years, respectively.

At April 30, 2000, the range of exercise prices and weighted average
remaining contractual life of outstanding options was $3.50 to $7.50 and 7.9
years, respectively.

At April 28, 2002, April 29, 2001, and April 30, 2000 the number of
options exercisable was 521,099, 640,869 and 657,673, respectively, and the
weighted average exercise price of those options was $4.61, $4.98 and $5.01,
respectively.

Upon confirmation of the Confirmed Plan effective August 21, 2002, the
1998 Plan was terminated. The Company plans to implement a new stock option
plan during fiscal year 2003, subject to shareholder approval.



|(16) |  | ADVERTISING COSTS
|---- |  | -----------------

Advertising costs are expensed as incurred and amounted to $2.6
million, $3.5 million, and $4.4 million in fiscal 2002, fiscal 2001,
and fiscal 2000, respectively. These costs are included in the
Occupancy and Other Costs in the Consolidated Statement of Operations.



|(17) |  | SELF-FUNDED INSURANCE
|---- |  | ---------------------

The Company is self-funded for a portion of its exposure for
losses related to group medical, workers compensation, and general
liability costs. It is the Companys policy to record self-funded
reserves, as determined actuarially, based upon claims filed and
estimates of claims incurred but not yet reported.



|(18) |  | BANKRUPTCY ACCOUNTING
|---- |  | ---------------------

Since the Company entered into Chapter 11 bankruptcy, it has
applied the provisions of SOP 90-7, which does not significantly
change the application of

F-23



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##### Table of Contents



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 distinguish transactions
and events that are directly associated with the reorganization from
those transactions that are the result of ongoing operations of the
business.

(19) INCOME TAXES

Income tax expense for Fiscal Year 2002, Fiscal Year 2001, and
Fiscal Year 2000 consists of the following:

|                                                           |                          |                                  |    |                  |    |                |       |                |       |   |      |      |     |  
|---------------------------------------------------------- | ------------------------ | -------------------------------- | -- | ---------------- | -- | -------------- | ----- | -------------- | ----- | - | ---- | ---- | --- | -
|                                                           |                          |                                  |    | ($ in thousands)
|                                                           |                          |                                  |    | April 28, 2002   |    | April 29, 2001 |       | April 30, 2000
|                                                           |                          |                                  |    |                  |    |                |       |               
|                                                           | Current:                 |                                  |    |                  |    |                |       |                |       |   |      |      |    
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                          | Federal                          |    | $                |   |                |       | $              | (595  | ) |      | $    | (16 | )
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                          | State                            |    |                  | 49 |                |       |                | 19    |   |      |      | (4  | )
|                                                           |                          |                                  |    |                  |    |                |       |                |       |   |      |     
|                                                           |                          |                                  | 49 |                  |    |                | (576  | )              |       |   | (20  | )   
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           | Deferred:                |                                  |    |                  |    |                |       |                |       |   |      |      |    
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                          | Federal                          |    |                  |   |                |       |                | 2,238 |   |      |      | 78  |  
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                          | State                            |    |                  |   |                |       |                | 156   |   |      |      | 20  |  
|                                                           |                          |                                  |    |                  |    |                |       |                |       |   |      |     
|                                                           |                          |                                  |   |                  |    |                | 2,394 |                |       |   | 98   |     
|                                                          
|                                                          
|                                                          
|                                                          
|Total income tax expense before tax Benefit                |                          |                                  |    |                  |    |                |       |                |       |   |      |     
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                          | from cumulative effect of change |    |                  |    |                |       |                |       |   |      |      |     |  
|                                                          
|                                                          
|                                                          
|                                                          
|Change in accounting principle                             |                          |                                  | 49 |                  |    |                | 1,818 |                |       |   | 78   |     
|                                                           |                          |                                  |    |                  |    |                |       |                |       |   |      |     
|Tax benefit from cumulative change in
Accounting principle |                          |                                  |   |                  |    |                |      |                |       |   | (248 | )   
|                                                           |                          |                                  |    |                  |    |                |       |                |       |   |      |     
|                                                           | Total income tax expense |                                  |    | 49               |    |                |       | 1,818          |       |   |      | (170 | )  
|                                                           |                          |                                  |    |                  |    |                |       |                |       |   |      |     

The tax effects of the temporary differences comprising deferred tax assets and liabilities are as follows:

|                               |                           |                               |       |                   |         |                |       |  |        |  
|------------------------------ | ------------------------- | ----------------------------- | ----- | ----------------- | ------- | -------------- | ----- |  | ------ | -
|                               |                           |                               |       | ( $ in thousands)
|                               |                           |                               |       | April 28, 2002    |         | April 29, 2001
|                               |                           |                               |       |                   |         |               
|                               | Deferred tax assets:      |                               |       |                   |         |                |       |  |       
|                              
|                              
|                              
|                              
|Tax credit carryforwards       |                           |                               | 2,935 |                   |         |                | 2,624 | 
|                              
|                              
|                              
|                              
|NOL/Capital Loss
Carryforwards |                           |                               | 3,950 |                   |         |                | 1,339 | 
|                              
|                              
|                              
|                              
|                               |                           | Accrued workers compensation |       |                   | 263     |                |       |  | 322    |  
|                              
|                              
|                              
|                              
|                               |                           | Property and equipment        |       |                   | 4,547   |                |       |  | 2,447  |  
|                              
|                              
|                              
|                              
|                               |                           | Restructuring
Reserves        |       |                   | 1,755   |                |       |  |       |  
|                              
|                              
|                              
|                              
|                               |                           | Other                         |       |                   | 808     |                |       |  | 257    |  
|                              
|                              
|                              
|                              
|                               |                           | Less: valuation allowance     |       |                   | (14,258 | )              |       |  | (6,800 | )
|                               |                           |                               |       |                   |         |                |       | 
|                               | Deferred tax liabilities: |                               |       |                   |         |                |       |  |       
|                              
|                              
|                              
|                              
|                               |                           | Other                         |       |                   |        |                |       |  | (189   | )
|                               |                           |                               |       |                   |         |                |       | 
|                               |                           | $                             |      |                   |         | $              |      | 

The valuation allowance for deferred tax assets was $14.3 million and $6.8 million as of April 28, 2002 and April 29, 2001, respectively. The valuation
allowance increased by $7.5 million because management determined it is more likely than Not that the Company will not be able to utilize its deferred tax
assets.

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 generation of future taxable income during the period
in which those temporary differences become deductible.

At April 28, 2002, the Company had available net operating loss carryforwards of approximately $9.3 million which will
expire in years beginning in 2021and 2022.

F-24



---



##### Table of Contents



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 year 2002 and
2001 is as follows:

|                                      |  |                   |        |                |  |  |        |   
|------------------------------------- |  | ----------------- | ------ | -------------- |  |  | ------ | --
|                                      |  | ( $ in thousands)
|                                      |  | April 28, 2002    |        | April 29, 2001
|                                      |  |                   |        |               
|Income taxes at statutory rates       |  |                   | (34.00 | )%             |  |  | (34.00 | )%
|                                     
|                                     
|                                     
|                                     
|State and local taxes, net of benefit |  |                   | 3.63   | %              |  |  | 0.82   | % 
|                                     
|                                     
|                                     
|                                     
|FICA tip tax credit                   |  |                   | 1.18   | %              |  |  | 1.27   | % 
|                                     
|                                     
|                                     
|                                     
|Other items                           |  |                   | (5.68  | )%             |  |  | 3.44   | % 
|                                     
|                                     
|                                     
|                                     
|Permanent Differences                 |  |                   | 0.26   | %              |  |  |       |   
|                                     
|                                     
|                                     
|                                     
|Change in valuation allowance %       |  |                   | 34.76  | %              |  |  | 41.42  | % 
|                                      |  |                   |        |                |  |  |        |   
|                                      |  |                   | 0.15   | %              |  |  | 12.95  | % 
|                                      |  |                   |        |                |  |  |        |   

(20) 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 34 (49%) of its 69 restaurants
(after the four closings subsequent to April 28, 2002) within the state of
Florida. Consequently, the operations of the Company are affected by
fluctuations in the Florida economy. Furthermore, the Company may be affected
by changing conditions within the food service industry.

For Fiscal Year 2002, Fiscal Year 2001 and Fiscal Year 2000, two suppliers
comprised approximately 66%, 33% and 27%, respectively, of the Companys
purchases. Purchases from these suppliers were approximately $47.4 million,
$35.3 million and $33.6 million for Fiscal Year 2002, Fiscal Year 2001 and
Fiscal Year 2000, respectively.

(21) COMMITMENTS AND CONTINGENCIES

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.

The Company plans to open the two Company-owned restaurants under
construction or development as of April 28, 2002 in fiscal year 2003. The
Company expects that the average cash investment required to open these new
restaurants in fiscal year 2003, excluding land and pre-opening costs, will be
approximately $0.8 million per restaurant. It is expected that this amount
will be funded by cash from operations.

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 Company is the guarantor of equipment leases for three restaurants
owned by Roadhouse Operating. Roadhouse Operating 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 28, 2002.
Approximately $250,000 of these payments was in arrears as of April 28, 2002.
The Company is currently in negotiations with the lessors and Roadhouse
Operating to restructure the lease agreements and bring the payments current.
Should these negotiations fail, under the guaranty the Company could be held
liable to make payment to the lessors.

F-25



---



##### Table of Contents



CLASS ACTION SUIT

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 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
Reorganization Plan as subordinate to the claims of all creditors. To
the extent, if any, such claims are allowed, they will share in the
distribution of stock in Reorganized Roadhouse Grill with the Holders of
the Old Common Stock, and will not dilute the recoveries of Roadhouse
Grills creditors. The Company believes there is no merit to the Action.

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 United States
Bankruptcy Court for the Southern District of Florida (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. Therefore, based on discussions with counsel, it
is the Companys expectation that the case against the Company will be
dismissed. Should the Action brought by the plaintiffs not be dismissed,
the plaintiffs will share in the distribution of stock in Reorganized
Roadhouse Grill with the Holders of the Old Common Stock, and will not
dilute the recoveries of Roadhouse Grills creditors.

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, the Company will indemnify the individual
defendants to the extent deductibles are paid.

F-26



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##### Table of Contents



(22) OTHER

As of April 28, 2002 the Company had paid $158,206 to Cornerstone
Consulting Group, LLC. for interim CFO and consulting services including
expenses. No amounts were paid during fiscal years 2001 or 2000.

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

On June 3, 1997, the Board of Directors of the Company approved 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 would have required the Company to extend plan benefits
to a broader group of employees, the Company also authorized a Supplemental
Executive Retirement Plan (the SERP) for execution. A formal plan, in each
case, was adopted by the Company during the fourth quarter of 1997.

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 2002, Fiscal Year 2001 and Fiscal Year 2000 was
approximately $19,000, $14,800 and $16,300, respectively.

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 2002, Fiscal Year 2001 and Fiscal Year
2000 was approximately $112,500, $147,000 and $116,500, respectively.

(24) RELATED PARTY TRANSACTIONS

Berjaya directly or indirectly owns Roadhouse Grill Hong Kong and
Roadhouse Grill Asia. In January 1996, the Company entered into the Hong Kong
Master Development Agreement which 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 or its affiliates are not required to pay
any franchise or reservation fee for restaurants that it develops, but it 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 a royalty based 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, 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. The Company did not recognize royalty
income from Roadhouse Grill Hong Kong for Fiscal Year 2002, Fiscal Year 2001 or
Fiscal Year 2000.

In January 1996, the Company also entered into the Asia Master Development
Agreement, 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 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 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
Hong Kong Master Development Agreement.

F-27



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##### Table of Contents



As of December 28, 1997, there were three Roadhouse Grill restaurants
operating in Malaysia under the Asia Master Development Agreement.
Subsequently, two of the franchisees in Malaysia ceased operations, and two new
restaurants were opened in Malaysia. As of April 28, 2002, there were three
Roadhouse Grill restaurants operating in Malaysia. The Company
accrued $84,000, $40,000 and $12,000 in royalty income from those restaurants
during Fiscal Year 2002, Fiscal Year 2001 and Fiscal Year 2000, respectively.
As of April 28, 2002, $125,510 of the Royalty Receivable from Roadhouse Grill
Asia has been fully reserved due to lack of payment. The remaining receivable
of $86,399 is not reserved, as it will be offset by interest payable to
Berjaya.

National Retail Group, Inc. (NRG) is an affiliate of Ayman Sabi. Mr.
Sabi was and remains a director of the Company, was Chairman of the Companys
Executive Committee from November 1997 to February 1998, and was elected
President and Chief Executive Officer of the Company on February 6, 1998.
Martin Bernholz, President of NRG, is Secretary of the Company and in-house
counsel of the Company as of April 25, 1999. During Fiscal Year 2002, Fiscal
Year 2001 and Fiscal Year 2000, the Company paid fees and reimbursed expenses
in the aggregate amount of $0, $3,345, and $1,069,316 respectively to NRG.

On February 14, 2001, Berjaya (which owns approximately 62% of the
Companys common stock) loaned the Company $1.5 million. The loan is evidenced
by a promissory note which bears interest at 10% per annum and is payable by
the Company on demand at any time after August 14, 2001 and is collateralized
by intellectual property and certain unencumbered real and personal property.
Pursuant to the Confirmed Plan, on the Effective Date, Berjaya will receive, in
full satisfaction of the $1.5 million loan, 4,166,667 shares of New Common
Stock at the rate of $.36 per share, representing 14.26% of the outstanding
common stock in the reorganized Company.

(25) NET (LOSS) INCOME 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;

|                                                   |  |                                         |         |        |  |        |           |  |  |   |       |  
|-------------------------------------------------- |  | --------------------------------------- | ------- | ------ |  | ------ | --------- |  |  | - | ----- | -
|                                                   |  | Fifty-two Weeks Ended April 28, 2002   
|                                                   |  |                                        
|                                                   |  | Net Income                              |         | Shares |  | Amount
|                                                   |  |                                         |         |        |  |       
|                                                   |  | ($ in thousands, except per share data)
|BASIC EPS                                          |  |                                         |         |        |  |        |           |  |  |   |       |  
|                                                  
|                                                  
|                                                  
|                                                  
|Net (loss) income 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.
The options, which expire on varying dates, were still outstanding as of April
28, 2002. No new options were granted during Fiscal Year 2002. Convertible
debt is not included in the computation of diluted EPS because the Company
recognized a loss for the Fiscal year 2002 and including such conversion would
result in antidilutive EPS.

F-28



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##### Table of Contents



|                                                   |  |                                         |         |        |  |        |           |  |  |   |       |  
|-------------------------------------------------- |  | --------------------------------------- | ------- | ------ |  | ------ | --------- |  |  | - | ----- | -
|                                                   |  | Fifty-two Weeks Ended April 29, 2001   
|                                                   |  |                                        
|                                                   |  | Net Income                              |         | Shares |  | Amount
|                                                   |  |                                         |         |        |  |       
|                                                   |  | ($ in thousands, except per share data)
|BASIC EPS                                          |  |                                         |         |        |  |        |           |  |  |   |       |  
|                                                  
|                                                  
|                                                  
|                                                  
|Net (loss) income 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.
The options, which expire on varying dates, were still outstanding as of April
29, 2001. No new options were granted in Fiscal Year 2001. Convertible debt
is not included in the computation of diluted EPS because the Company
recognized a loss for the Fiscal year 2001 and including such conversion would
result in antidilutive EPS.

|                                            |  |                                         |       |        |  |        |           |  |  |   |      | 
|------------------------------------------- |  | --------------------------------------- | ----- | ------ |  | ------ | --------- |  |  | - | ---- | 
|                                            |  | Fifty-three Weeks Ended April 30, 2000 
|                                            |  |                                        
|                                            |  | Net Income                              |       | Shares |  | Amount
|                                            |  |                                         |       |        |  |       
|                                            |  | ($ in thousands, except per share data)
|BASIC EPS                                   |  |                                         |       |        |  |        |           |  |  |   |      | 
|                                           
|                                           
|                                           
|                                           
|Net income available
to common shareholders |  | $                                       | 2,606 |        |  |        | 9,708,741 |  |  | $ | 0.27 | 
|                                           
|                                           
|                                           
|                                           
|EFFECT OF DILUTIVE SECURITIES               |  |                                         |       |        |  |        |           |  |  |   |      | 
|                                           
|                                           
|                                           
|                                           
|Stock options                               |  |                                         |      |        |  |        | 83,278    |  |  |   |     | 
|                                            |  |                                         |       |        |  |        |           |  |  |   |      | 
|DILUTED EPS                                 |  | $                                       | 2,606 |        |  |        | 9,792,019 |  |  | $ | 0.27 | 
|                                            |  |                                         |       |        |  |        |           |  |  |   |      | 

Options to purchase 525,695 shares of common stock at a weighted average
exercise price of $6.21 per share were outstanding during Fiscal Year 2000, 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.
The options, which expire on varying dates, were still outstanding as of April
30, 2000.

(26) PRO FORMA BALANCE SHEET

The following is a pro forma balance sheet of the Companys estimated
position at the time of reorganization under the Chapter 11 bankruptcy.

F-29



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##### Table of Contents



|                                                   |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |               |            |            |            | 
|-------------------------------------------------- | ------------------- | ------------ | ---------------------------------------- | ------------------------------------------ | ---------- | -------------- | ---------- | ---------- | --------- | --------- | ----------- | ---------- | ------------- | ---------- | ---------- | ---------- | 
|                                                   |                     |              |                                          |                                            |            | RGH Fiscal     |            |            |           |           |             |            |               |            |           
|                                                   |                     |              |                                          |                                            |            | April 28, 2002 |            |            |           |           |             |            | CONFIRMATION 
|                                                   |                     |              |                                          |                                            |            |                |            |            |           |           |             |            | PROFORMA     
|                                                   |                     |              |                                          |                                            |            | YTD            |            |            |           |           |             |            | BALANCE SHEET
|                                                   |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              
|                                                   |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |               |            | UNAUDITED 
|Current assets                                     |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                     |              | Cash and cash equivalents                |                                            | $          | 3,193,270      | (1         | )          |           | $         | 600,000     |            |               | $          | 3,793,270  |           
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                     |              | Accounts receivable                      |                                            |            | 491,665        |            |            |           |           | 0           |            |               |            | 491,665    |           
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                     |              | Inventory                                |                                            |            | 1,305,177      |            |            |           |           | 0           |            |               |            | 1,305,177  |           
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                     |              | Prepaid expenses                         |                                            |            | 2,627,935      |            |            |           |           | 0           |            |               |            | 2,627,935  |           
|                                                   |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              
|                                                   |                     |              | Total current assets                     |                                            |            | 7,618,047      |            |            |           |           | 600,000     |            |               |            | 8,218,047  |           
|                                                   |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              
|Property, plant & equipment, net                   |                     |              | 71,926,161                               | (2                                         | )          |                |            | 4,393,000  |           |           |             | 76,319,161 |              
|                                                  
|                                                  
|                                                  
|                                                  
|Intangible assets, net of accumulated
amortization |                     |              | 1,934,831                                |                                            |            |                |            | 0          |           |           |             | 1,934,831  |              
|                                                  
|                                                  
|                                                  
|                                                  
|Other assets                                       |                     |              | 1,874,938                                |                                            |            |                |            | 0          |           |           |             | 1,874,938  |              
|                                                   |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              
|                                                   |                     | Total assets |                                          | $                                          | 83,353,977 |                |            |            | $         | 4,993,000 |             |            | $             | 88,346,977 |           
|                                                   |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              
|Current liabilities:                               |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                     |              | Accounts payable                         |                                            | $          | 7,253,661      | (3         | )          |           |           | ($4,478,960 | )          |               | $          | 2,774,701  |           
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                     |              | Accrued expenses                         |                                            |            | 17,285,019     | (4         | )          |           |           | (6,831,000  | )          |               |            | 10,454,019 |           
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                     |              | Note payable shareholder                 |                                            |            | 1,500,000      | (5         | )          |           |           | (1,500,000  | )          |               |            | 0          |           
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                     |              | Short-term note payable                  |                                            |            | 4,785,040      | (6         | )          |           |           | (4,785,040  | )          |               |            | 0          |           
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                     |              | Current portion of long-term debt        |                                            |            | 0              | (7         | )          |           |           | 4,549,000   |            |               |            | 4,549,000  |           
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                     |              | Current portion of capital lease payable |                                            |            | 0              | (8         | )          |           |           | 926,000     |            |               |            | 926,000    |           
|                                                   |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              
|                                                   |                     |              | Total current liabilities                |                                            |            | 30,823,720     |            |            |           |           | (12,120,000 | )          |               |            | 18,703,720 |           
|                                                   |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              
|Other liabilities                                  |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              
|                                                  
|                                                  
|                                                  
|                                                  
|Long-term debt                                     |                     |              | 33,092,369                               | (9                                         | )          |                |            | 11,539,000 |           |           |             | 44,631,369 |              
|                                                  
|                                                  
|                                                  
|                                                  
|Capital lease payable                              |                     |              | 3,909,939                                | (10                                        | )          |                |            | (926,000   | )         |           |             | 2,983,939  |              
|                                                   |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              
|                                                   |                     |              | Total liabilities                        |                                            |            | 67,826,028     |            |            |           |           | (1,507,000  | )          |               |            | 66,319,028 |           
|                                                   |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              
|Shareholders equity                               |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Common stock        |              |                                          | 291,262                                    | (11        | )              |            |            | 585,356   |           |             |            | 876,618       |           
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Paid in capital     |              |                                          | 50,038,843                                 | (12        | )              |            |            | 5,914,644 |           |             |            | 55,953,487    |           
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Accumulated deficit |              |                                          | (34,802,156                                | )          |                |            |            | 0         |           |             |            | (34,802,156   | )         
|                                                   |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              
|                                                   |                     |              | Total shareholders equity               |                                            |            | 15,527,949     |            |            |           |           | 6,500,000   |            |               |            | 22,027,949 |           
|                                                   |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              
|                                                   |                     |              |                                          | Total liabilities and shareholders
equity |            | $              | 83,353,977 |            |           |           | $           | 4,993,000  |               |            | $          | 88,346,977 | 
|                                                   |                     |              |                                          |                                            |            |                |            |            |           |           |             |            |              

1) Received $5,000,000 from DIP financing and paid $4,400,000 due on effective date.

2) $4,393,000 transferred into property and equipment due to conversion of operating leases to notes payable.

3) Recording $2,300,000 of effective date payments and conversion of accounts payable to long-term debt of $2,178,960.

4) $5,731,000 represents rejected leases, real estate taxes and accrued interest converted to debt and $1,100,000 in effective date payments.

5) Shareholder receives equity in full
satisfaction of $1,500,000 note payable.

6) Reclassified to long-term notes payable.

7) To record current portion of long-term
debt.

8) To record current portion of capital
lease payable.

9) Record conversion of closed store leases, accounts payable, rejected leases and accrued expenses into long-term debt totaling $17,088,000 less
$1,000,000 of effective date payments and $4,549,000 reclassed to current portion of long-term debt.

10) Adjustment to reclassify $926,000 into current portion of capital
lease payable.

11) To record additional common stock.

12) To record additional paid in capital resulting from shares issued in connection with DIP financing and issuance of stock to shareholder in full
satisfaction of note payable.

(27) QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of the unaudited quarterly results of
operations for Fiscal Year 2001 and Fiscal Year 2000 with the quarters
structured according to the fiscal year:

F-30



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##### Table of Contents



|      |                                                                 |                                                                             |   |                                         |       |         |   |         |       |         |   |            |       |   |   |        |       |   |   |         |       |  
|----- | --------------------------------------------------------------- | --------------------------------------------------------------------------- | - | --------------------------------------- | ----- | ------- | - | ------- | ----- | ------- | - | ---------- | ----- | - | - | ------ | ----- | - | - | ------- | ----- | -
|      |                                                                 |                                                                             |   | ($ in thousands, except per share data)
|      |                                                                 |                                                                             |   | 1ST QTR                                 |       | 2ND QTR |   | 3RD QTR |       | 4TH QTR |   | TOTAL YEAR
|      |                                                                 |                                                                             |   |                                         |       |         |   |         |       |         |   |           
|2002: |                                                                 |                                                                             |   |                                         |       |         |   |         |       |         |   |            |       |   |   |        |       |   |   |        
|     
|     
|     
|     
|      | Total revenues                                                  |                                                                             | $ | 43,230                                  |       |         | $ | 39,388  |       |         | $ | 36,477     |       |   | $ | 39,887 |       |   | $ | 158,982 |      
|     
|     
|     
|     
|      | Operating income (loss)                                         |                                                                             |   | (1,118                                  | )     |         |   | (7,661  | )     |         |   | (502       | )     |   |   | (8,243 | )     |   |   | (17,524 | )    
|     
|     
|     
|     
|      | Loss before cumulative effect of
change in accounting principle |                                                                             |   | (2,194                                  | )     |         | $ | (8,976  | )     |         |   | (1,644     | )     |   |   | (8,629 | )     |   |   | (21,443 | )    
|     
|     
|     
|     
|      | Cumulative effect of change in accounting
principle             |                                                                             |   |                                        |       |         |   |        |       |         |   |           |       |   |   |       |       |   |   |        |      
|     
|     
|     
|     
|      | Net loss                                                        |                                                                             | $ | (2,194                                  | )     |         | $ | (8,976  | )     |         |   | (1,644     | )     |   |   | (8,629 | )     |   |   | (21,443 | )    
|     
|     
|     
|     
|      | Basic net loss per common share:                                |                                                                             |   |                                         |       |         |   |         |       |         |   |            |       |   |   |        |       |   |   |         |      
|     
|     
|     
|     
|      |                                                                 | Basic net loss before cumulative
effect of change in accounting principle   |   | $                                       | (0.23 | )       |   | $       | (0.92 | )       |   | $          | (0.17 | ) |   | $      | (0.89 | ) |   | $       | (2.21 | )
|     
|     
|     
|     
|      |                                                                 | Cumulative effect of change in
accounting principle                         |   |                                         |      |         |   |         |      |         |   |            |      |   |   |        |      |   |   |         |      |  
|     
|     
|     
|     
|      | Basic net loss per common share                                 |                                                                             | $ | (0.23                                   | )     |         | $ | (0.92   | )     |         | $ | (0.17      | )     |   | $ | (0.89  | )     |   | $ | (2.21   | )    
|     
|     
|     
|     
|      | Diluted net loss per common share:                              |                                                                             |   |                                         |       |         |   |         |       |         |   |            |       |   |   |        |       |   |   |         |      
|     
|     
|     
|     
|      |                                                                 | Diluted net loss before cumulative
effect of change in accounting principle |   | $                                       | (0.23 | )       |   | $       | (0.92 | )       |   | $          | (0.17 | ) |   | $      | (0.89 | ) |   | $       | (2.21 | )
|     
|     
|     
|     
|      |                                                                 | Cumulative effect of change in
accounting principle                         |   |                                         |      |         |   |         |      |         |   |            |      |   |   |        |      |   |   |         |      |  
|     
|     
|     
|     
|      | Diluted net loss per common share                               |                                                                             | $ | (0.23                                   | )     |         | $ | (0.92   | )     |         | $ | (0.17      | )     |   | $ | (0.89  | )     |   | $ | (2.21   | )    
|     
|     
|     
|     
|2001: |                                                                 |                                                                             |   |                                         |       |         |   |         |       |         |   |            |       |   |   |        |       |   |   |        
|     
|     
|     
|     
|      | Total revenues                                                  |                                                                             | $ | 41,420                                  |       |         | $ | 39,396  |       |         | $ | 41,789     |       |   | $ | 45,450 |       |   | $ | 168,055 |      
|     
|     
|     
|     
|      | Operating income (loss)                                         |                                                                             |   | 499                                     |       |         |   | (3,296  | )     |         |   | (6,571     | )     |   |   | (1,815 | )     |   |   | (11,183 | )    
|     
|     
|     
|     
|      | Loss before cumulative effect of
change in accounting principle |                                                                             |   | (111                                    | )     |         | $ | (2,829  | )     |         |   | (10,813    | )     |   |   | (2,103 | )     |   |   | (15,856 | )    
|     
|     
|     
|     
|      | Cumulative effect of change in accounting
principle             |                                                                             |   |                                        |       |         |   |        |       |         |   |           |       |   |   |       |       |   |   |        |      
|     
|     
|     
|     
|      | Net loss                                                        |                                                                             | $ | (111                                    | )     |         | $ | (2,829  | )     |         | $ | (10,813    | )     |   | $ | (2,103 | )     |   | $ | (15,856 | )    
|     
|     
|     
|     
|      | Basic net loss per common share:                                |                                                                             |   |                                         |       |         |   |         |       |         |   |            |       |   |   |        |       |   |   |         |      
|     
|     
|     
|     
|      |                                                                 | Basic net loss before cumulative
effect of change in accounting principle   |   | $                                       | (0.01 | )       |   | $       | (0.29 | )       |   | $          | (1.11 | ) |   | $      | (0.22 | ) |   | $       | (1.63 | )
|     
|     
|     
|     
|      |                                                                 | Cumulative effect of change in
accounting principle                         |   |                                         |      |         |   |         |      |         |   |            |      |   |   |        |      |   |   |         |      |  
|     
|     
|     
|     
|      | Basic net loss per common share                                 |                                                                             | $ | (0.01                                   | )     |         | $ | (0.29   | )     |         | $ | (1.11      | )     |   | $ | (0.22  | )     |   | $ | (1.63   | )    
|     
|     
|     
|     
|      | Diluted net loss per common share:                              |                                                                             |   |                                         |       |         |   |         |       |         |   |            |       |   |   |        |       |   |   |         |      
|     
|     
|     
|     
|      |                                                                 | Diluted net loss before cumulative
effect of change in accounting principle |   | $                                       | (0.01 | )       |   | $       | (0.29 | )       |   | $          | (1.11 | ) |   | $      | (0.22 | ) |   | $       | (1.63 | )
|     
|     
|     
|     
|      |                                                                 | Cumulative effect of change in
accounting principle                         |   |                                         |      |         |   |         |      |         |   |            |      |   |   |        |      |   |   |         |      |  
|     
|     
|     
|     
|      | Diluted net loss per common share                               |                                                                             | $ | (0.01                                   | )     |         | $ | (0.29   | )     |         | $ | (1.11      | )     |   | $ | (0.22  | )     |   | $ | (1.63   | )    

F-31



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##### Table of Contents



EXHIBIT INDEX

|            |  |                                                                                                                                            
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | 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
|           
|           
|           
|           
|            |  |                                                                                                                                            
|           
|           
|           
|           
|2.2         |  | Debtors Second Amended and Restated Chapter 11 Plan of
Reorganization, as Modified, Dated June 12, 2002                                   
|           
|           
|           
|           
|            |  |                                                                                                                                            
|           
|           
|           
|           
|2.3         |  | Order Confirming Debtors Second Amended and Restated Chapter
11 Plan of Reorganization, as Modified                                       
|           
|           
|           
|           
|            |  |                                                                                                                                            
|           
|           
|           
|           
|99.1        |  | Certification of Chief Executive Officer and Acting Chief
Financial Officer Relating to a Periodic Report Containing
Financial Statements  

F-32