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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
      þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 28,
    2009ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to  Commission File
    No. 000-50052
 Cosi, Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

06-1393745(State or other jurisdiction
    of incorporation or organization)

(I.R.S. Employer
    Identification No.)   1751 Lake
    Cook Road, Suite 600, Deerfield, Illinois 60015 (Address
    and Zip Code of Principal Executive Offices)
  (847) 597-8800 (Registrants
    telephone number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of classCommon Stock
    ($.01 par value)   Securities registered pursuant to Section 12(g) of the
    Act:
    None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K.  Yes o þ
  Rule 12b-2
  Large accelerated filer o

Accelerated filer o

Non-accelerated filer o

Smaller reporting company þ(Do not check if a smaller reporting company)   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K




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##### 





TABLE OF
    CONTENTS
   
 Item

Description

PagePART I1.


Business


31A.


Risk Factors


81B.


Unresolved Staff Comments


182.


Properties


183.


Legal Proceedings


214.


Reserved


21PART II5.


Market for Registrants Common Equity,
    Related Stockholder Matters, and Issuer Purchases of Equity
    Securities


226.


Selected Financial Data


247.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


257A.


Quantitative and Qualitative Disclosures about
    Market Risk


398.


Financial Statements and Supplementary Data


409.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


409A.


Controls and Procedures


409B.


Other Information


41PART III10.


Directors, Executive Officers and Corporate
    Governance


4111.


Executive Compensation


4112.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


4113.


Certain Relationships and Related Transactions
    and Director Independence


4114.


Principal Accounting Fees and Services


41PART IV15.


Exhibits and Financial Statement Schedules


42EX-23.1EX-31.1EX-31.2EX-32.1   2




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PART I  Item 1.
    BUSINESS  General
    ®
  www.getcosi.com free-of-charge Form 10-K, Form 10-Q, Form 8-K c/o Investor
  Business
    Strategy
  Così Fan Tutte
      Offering an innovative menu appealing to the sophisticated
    tastes of our target customer. made-to-order
  Providing customers with an exceptional service and dining
    experience.
    Expanding marketing initiatives to build brand
    awareness.
 3




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out-of-restaurant
  Increasing comparable restaurant sales and average unit
    volumes. top-of-mind
  Operating our restaurants efficiently.
  Growth
    Strategy
    Build a system of franchised restaurants and develop
    Company-owned restaurants. multi-unit
  Pursue foodservice strategic alliances. grab-and-go grab-and-go
  Cosi
    Product Offerings
   4




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People
    Restaurant
    Operations
  Management Structure.
      Sales Forecasting.
  Product Quality.
 5




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Food and Labor Cost Controls. item-by-item
  multi-unit
  day-to-day
  Management
    Information Systems
  point-of-sale
  up-to-date
  back-ups,
  Purchasing
      Coca-Cola
 6




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Competition
    Intellectual
    Property
            Governmental
    Regulation
   7




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and/or
        Item 1A.
    RISK
    FACTORS  Risks
    Related to Our Growth Strategy
  We may
    not be able to achieve our planned expansion. If we or our
    franchisees are unable to successfully open new restaurants, our
    revenue growth rate and profits may be reduced.
    
    locating suitable restaurant sites in new and existing markets; 8




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
    negotiating acceptable lease terms;
    generating positive cash flow from existing and new restaurants;
    successful operation and execution in new and existing markets;
    recruiting, training and retaining qualified corporate and
    restaurant personnel and management;
    attracting and retaining qualified franchisees with sufficient
    experience and financial resources to develop and operate our
    restaurants successfully;
    cost effective and timely planning, design and build-out of
    restaurants;
    the reliability of our customer and market studies;
    the reliability of our site identification studies;
    consumer trends;
    obtaining and maintaining required local, state, federal and
    where applicable, foreign governmental approvals and permits
    related to the construction of the sites and the sale of food
    and alcoholic beverages;
    creating customer awareness of our restaurants in new markets;
    competition in our markets, both in our business and in locating
    suitable restaurant sites;
    the cost of our principal food products and supply and delivery
    shortages or interruptions;
    weather conditions; and
    general economic conditions.  We
    must identify and obtain a sufficient number of suitable new
    restaurant sites for us to achieve a sustainable revenue growth
    rate.
    Our
    expansion in existing markets can cause sales in some of our
    existing restaurants to decline, which could result in
    restaurant closures.
    Our
    expansion into new markets, both foreign and domestic, may
    present increased risks due to our unfamiliarity with the area.
    The restaurants we open in new geographic regions may not
    achieve market acceptance.
  ®
 9




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We may
    not be able to successfully incorporate a franchising and area
    developer model into our strategy.
    If our
    franchisees cannot develop or finance new restaurants, build
    them on suitable sites or open them on schedule, our growth and
    success may be impeded.
    Additional
    foodservice strategic alliances may not be successful and may
    materially adversely affect our business and results of
    operations.
   10




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Any
    inability to manage our growth effectively could materially
    adversely affect our operating results.
    If we
    are unable to successfully integrate future acquisitions, our
    business could be negatively impacted. Any acquisitions may also
    be costly.
    Risks
    Related to Our Business
  If we
    are unable to execute our business strategy, we could be
    materially adversely affected.
    
    our ability to generate positive cash flow from operations;
    identification and availability of suitable restaurant sites;
    competition for restaurant sites and customers;
    negotiation of favorable leases;
    management of construction and development costs of new and
    renovated restaurants;
    securing required governmental approvals and permits;
    recruitment and retention of qualified operating personnel;
    successful operation and execution in new and existing markets;
    recruiting, training and retaining qualified corporate and
    restaurant personnel and management;
    identification of under-performing restaurants and our ability
    to improve or efficiently close under-performing restaurants,
    including securing favorable lease termination terms;
    the rate of our internal growth, and our ability to generate
    increased revenue from existing restaurants;
    our ability to incorporate a franchising and area developer
    model into our strategy;
    competition in new and existing markets;
    the reliability of our customer and market studies; 11




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
    the impact of the general economic conditions and high
    unemployment rates on consumer spending, particularly in
    geographic regions that contain a high concentration of our
    restaurants;
    the cost of our principal food products and supply and delivery
    shortages or interruptions;
    changes in commodity costs, labor, supply, fuel, utilities,
    distribution and other operating costs;
    availability of additional capital and financing;
    weather conditions; and
    general regional, national and, where applicable, foreign
    economic conditions.    During
    our operating history, we have been unable to achieve
    profitability.
  Form 10-K
  If
    internally generated cash flow from our restaurants does not
    meet our expectations, our business, results of operations and
    financial condition could be materially adversely
    affected.
    We may
    need additional capital in the future and it may not be
    available on acceptable terms.
    The
    current economic recession could adversely affect our business
    and financial results and have a material adverse effect on our
    liquidity and capital resources.
   12




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Seasonality,
    inclement weather and other variable factors may adversely
    affect our sales and results of operations and could cause our
    quarterly results to fluctuate and fall below expectations of
    securities analysts and investors, resulting in a decline in our
    stock price.
    Our
    franchisees could take actions that could harm our
    business.
    We
    could face liability from our franchisees.
    Our
    financial results are affected by the financial results of our
    franchisees.
    Our
    restaurants are currently concentrated in the Northeastern and
    Mid-Atlantic regions of the United States, particularly in
    the New York City and Washington, D.C. areas. Accordingly,
    we are highly vulnerable to negative occurrences in these
    regions.
   13




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You
    should not rely on past increases in our average unit volumes as
    an indication of our future results of operations because they
    may fluctuate significantly.
    
    our ability to execute our business and growth strategy
    effectively;
    success of promotional and marketing initiatives including
    advertising and new product and concept development;
    sales performance by our new and existing restaurants;
    management turnover in the restaurants;
    competition;
    general regional, national and where applicable, foreign
    economic conditions;
    weather conditions; and
    the impact of the general economic conditions and high
    unemployment rates on consumer spending, particularly in
    geographic regions that contain a high concentration of our
    restaurants .    Our
    common stock may be delisted from the Nasdaq Global Market,
    which could have an adverse impact on the liquidity and market
    price of our common stock.
    over-the-counter
 14




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If we
    fail to comply with governmental regulations or if these
    regulations change, our business could suffer.
    Form 10-K
  Our
    operations depend upon governmental licenses and we may face
    liability under dram shop statutes.
  and/or
  Our
    failure or inability to enforce our trademarks or other
    proprietary rights could adversely affect our competitive
    position or the value of our brand.
      We
    hold significant amounts of illiquid assets and may have to
    dispose of them on unfavorable terms.
   15




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We may
    face litigation that could have a material adverse effect on our
    business, financial condition and results of
    operations.
  ® ®
    If we
    are unable to protect our customers credit card data, we
    could be exposed to data loss, litigation and liability, and our
    reputation could be significantly harmed.
    We
    rely on computer systems and information technology to run our
    business. Any material failure, interruption or security breach
    of our computer systems or information technology may adversely
    affect the operation of the business and our results of
    operations.
    Risks
    Relating to the Food Service Industry
  Our
    business is affected by changes in consumer
    preferences.
  made-to-order
 16




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Natural
    disasters, war, acts of terrorism or other armed conflict, or
    the threat of such actions, on the United States or
    international economies may cause a decline in discretionary
    consumer spending, which would negatively affect our
    business.
    Our
    success depends on our ability to compete with many food service
    businesses.
      Changes
    in food and supply costs and availability could adversely affect
    our results of operations.
     17




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Health
    concerns relating to the consumption of beef, poultry, produce
    or other food products could adversely affect the price and
    availability of beef, poultry, produce, and other food products,
    consumer preferences and our results of operations and stock
    price.
      The
    food service industry is affected by litigation and publicity
    concerning food quality, health and other issues, which can
    cause customers to avoid our products and result in
    liabilities.
    Our
    business could be adversely affected by increased labor costs or
    labor shortages.
    Item 1B.
    UNRESOLVED
    STAFF COMMENTS    Item 2.
    PROPERTIES    10-year
 18




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Street Address

City

Date Opened

FormatMIDATLANTIC234 South 15th Street

Philadelphia, PA

September-96

Cosi325 Chestnut Street

Philadelphia, PA

April-97

Cosi1350 Connecticut Avenue

Washington, DC

September-97

Cosi1128 Walnut Street

Philadelphia, PA

December-97

Cosi1647 20th Street NW

Washington, DC

August-98

Cosi140 South 36th Street

Philadelphia, PA

August-98

Cosi761 Lancaster Avenue

Bryn Mawr, PA

September-98

Cosi301 Pennsylvania Avenue SE

Washington, DC

March-99

Cosi2050 Wilson Boulevard

Arlington, VA

April-99

Cosi1700 Pennsylvania Avenue

Washington, DC

August-99

Cosi Downtown1700 Market Street

Philadelphia, PA

September-99

Cosi Downtown700 King Street

Alexandria, VA

May-00

Cosi700 11th Street

Washington, DC

May-00

Cosi4250 Fairfax Drive

Arlington, VA

June-00

Cosi1919 M Street

Washington, DC

September-00

Cosi201 South 18th Street

Philadelphia, PA

October-00

Cosi1001 Pennsylvania Avenue NW

Washington, DC

October-00

Cosi Downtown7251 Woodmont Avenue

Bethesda, MD

December-00

Cosi11909 Democracy Drive

Reston, VA

May-01

Cosi4074 The Strand West

Columbus, OH

October-01

Cosi1501 K Street NW

Washington, DC

December-01

Cosi Downtown1875 K Street

Washington, DC

July-02

Cosi Downtown6390 Sawmill Road

Columbus, OH

September-02

Cosi601 Pennsylvania Ave. NW

Washington, DC

September-02

Cosi1275 K Street

Washington, DC

September-02

Cosi2212 East Main Street

Bexley, OH

September-02

Cosi1478 Bethel Road

Columbus, OH

November-02

Cosi295 Main Street

Exton, PA

November-02

Cosi7166 N. High Street

Worthington, OH

December-02

Cosi5252 Wisconsin Ave, NW

Washington, DC

December-02

Cosi177 Kentlands Blvd

Gaithersburg, MD

January-03

Cosi1333 H Street, NW

Washington DC

January-03

Cosi Downtown1310 Polaris Parkway

Columbus, OH

February-03

Cosi1801 N. Lynn Street

Arlington, VA

November-05

Cosi4025 Welsh Road

Willow Grove, PA

December-05

Cosi50 Yorktown Plaza

Elkins Park, PA

April-06

Cosi833 Chestnut

Philadelphia, PA

June-06

Cosi9177 Reisterstown Road

Owing Mills, MD

June-06

Cosi424 West Swedesford Road

Berwyn, PA

June-06

Cosi100 South Charles

Baltimore, MD

July-06

Cosi513 West Broad Street

Falls Church, VA

October-06

Cosi3503 Fairfax Drive, Suite 200

Arlington, VA

November-06

Cosi 19




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Street Address

City

Date Opened

Format201 N. Washington #290

Rockville, MD

March-07

Cosi2955 Market St.

Philadelphia, PA

July-07

Cosi2011 Crystal Drive, ste 100

Arlington, VA

May-08

CosiMIDWEST116 S. Michigan Avenue

Chicago, IL

September-00

Cosi55 E. Grand Street

Chicago, IL

October-00

Cosi230 W. Washington Street

Chicago, IL

November-00

Cosi Downtown203 North LaSalle Street

Chicago, IL

May-01

Cosi Downtown301 South State Street

Ann Arbor, MI

May-01

Cosi1101 Lake Street

Oak Park, IL

June-01

Cosi101 North Old Woodward Avenue

Birmingham, MI

August-01

Cosi25 E. Hinsdale

Hinsdale, IL

December-01

Cosi8775 N. Port Washington Road

Fox Point, WI

December-01

Cosi230 West Monroe Street

Chicago, IL

May-02

Cosi Downtown301 East Grand River Avenue

East Lansing, MI

May-02

Cosi84 W. Adams Road

Rochester Hills, MI

September-02

Cosi28674 Telegraph Road

Southfield, MI

November-02

Cosi37652 Twelve Mile Road

Farmington Hills, MI

December-02

Cosi15131 LaGrange Road

Orland Park, IL

December-02

Cosi233 North Michigan Avenue

Chicago, IL

December-02

Cosi Downtown33 N Dearborn

Chicago, IL

June-05

Cosi Downtown1740 Sherman Avenue

Evanston, IL

September-05

Cosi18 West 066 22nd Street

Oak Brook Terrace, IL

August-06

Cosi2200 North Clark

Chicago, IL

August-06

Cosi8310 Greenway Boulevard, #106

Middleton, WI

September-06

Cosi250 State Street

Madison, WI

September-06

Cosi910 North Milwaukee Avenue, Suite A

Lincolnshire, IL

November-06

CosiCrystal Court Ste 150, 710 Marquette Ave

Minneapolis, MN

March-09

Cosi2100 Patriot Blvd

Glenview, IL

September-09

CosiNORTHEAST257 Park Avenue South

New York, NY

February-97

Cosi38 East 45th Street

New York, NY

February-97

Cosi Downtown11 West 42nd Street

New York, NY

June-97

Cosi Downtown60 East 56th Street

New York, NY

September-97

Cosi Downtown3 World Financial Center

New York, NY

January-98

Cosi Downtown55 Broad Street

New York, NY

March-98

Cosi Downtown1633 Broadway

New York, NY

July-98

Cosi Downtown61 West 48th Street

New York, NY

August-98

Cosi Downtown685 Third Avenue

New York, NY

June-99

Cosi Downtown970 Farmington Avenue

W. Hartford, CT

August-99

Cosi461 Park Avenue South

New York, NY

January-00

Cosi50 Purchase Street

Rye, NY

March-00

Cosi841 Broadway

New York, NY

September-00

Cosi15 S. Moger Avenue

Mt. Kisco, NY

December-00

Cosi 20




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Street Address

City

Date Opened

Format77 Quaker Ridge Road

New Rochelle, NY

November-01

Cosi1298 Boston Post Road

Larchmont, NY

December-01

Cosi471 Mount Pleasant Road

Livingston, NJ

September-02

Cosi29 Washington Street

Morristown, NJ

December-02

Cosi385 West Main Street

Avon, CT

December-02

Cosi498 7th Avenue

New York, NY

December-02

Cosi700 6th Avenue

New York, NY

February-03

Cosi980 Boston Post Road

Darien, CT

October-05

Cosi129 West Putnam Avenue

Greenwich, CT

February-06

Cosi441 South Oyster Bay Road

Plainview, NY

June-06

Cosi1209 High Ridge Road

Stamford, CT

July-06

Cosi44 Great Neck Road

Great Neck, NY

July-06

Cosi53 E. 8th St.

New York, NY

April-07

Cosi2186 Broadway

New York, NY

June-07

Cosi230 Tresser Blvd. Ste 005

Stamford, CT

November-07

Cosi   Item 3.
    LEGAL
    PROCEEDINGS      Item 4.
    RESERVED 21




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PART II  Item 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, STOCK AND RELATED
    STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY
    SECURITIES    Stock
    Price Information
    Fiscal 2009


Fiscal 2008Fiscal Quarter

High


Low


High


LowFirst Quarter

$
0.43


$
0.19


$
3.14


$
1.81Second Quarter

$
1.00


$
0.34


$
3.15


$
2.23Third Quarter

$
0.73


$
0.44


$
2.85


$
1.57Fourth Quarter

$
0.97


$
0.51


$
1.97


$
0.18   Stockholders
    Dividend
    Policy
   22




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Securities
    Authorized for Issuance Under Equity Compensation
    Plans
      Cummulative
    Total Return
  
 23




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##### Table of Contents



Item 6.
    SELECTED
    FINANCIAL DATA    Fiscal Year2009


2008


2007


2006


2005(In thousands, except per share data)Consolidated Statement of Operations Data:RevenuesRestaurant net sales

$
116,375


$
132,501


$
132,414


$
122,849


$
114,036Franchise fees and royalties


2,198



3,078



2,142



849



101Total revenus


118,573



135,579



134,556



123,698



114,137Costs and expenses:Cost of food and beverage


26,429



30,235



30,972



28,170



27,104Restaurant labor and related benefits


42,742



45,375



45,995



40,782



37,264Occupancy and other restaurant operating expenses


36,617



39,821



38,369



32,045



27,726105,788



115,431



115,336



100,997



92,094General and administrative expenses


15,044



19,966



22,973



26,887



24,265Depreciation and amortization


7,050



8,409



8,823



7,196



6,516Restaurant pre-opening expenses


13



100



710



1,451



824Provision for losses on asset impairments and disposals


1,530



7,099



3,845



249



675Closed store costs


48



69



262







Lease termination expense (benefit), net


322



551



347



(232
)


(179
)Gain on sale of assets


(102
)






(23
)


(482
)


(1,432
)Total costs and expenses


129,693



151,625



152,273



136,066



122,763Operating loss


(11,120
)


(16,046
)


(17,717
)


(12,368
)


(8,626
)Other income (expense):Interest income


3



102



524



1,411



802Interest expense


(4
)


(7
)


(42
)


(9
)


(34
)Allowance for notes receivable from stockholders


















(261
)Other income


17



41



705



77



104Total other income


16



136



1,187



1,479



611Loss from continuing operations


(11,104
)


(15,910
)


(16,530
)


(10,889
)


(8,015
)Discontinued operations:Operating loss from discontinued operations






(224
)


(903
)


(1,183
)


(1,906
)Asset impairments of discontinued operations






(88
)


(3,350
)


(256
)


(3,205
)Loss from discontinued operations






(312
)


(4,253
)


(1,439
)


(5,111
)Net loss

$
(11,104
)

$
(16,222
)

$
(20,783
)

$
(12,328
)

$
(13,126
)Per share data:Loss per share, basic and dilutedContinuing operations

$
(0.27
)

$
(0.40
)

$
(0.42
)

$
(0.28
)

$
(0.23
)Discontinued operations

$



$



$
(0.11
)

$
(0.04
)

$
(0.15
)Net loss

$
(0.27
)

$
(0.40
)

$
(0.53
)

$
(0.32
)

$
(0.38
)Weighted average shares used in computing net loss per
    share  basic and diluted


40,423



40,079



39,335



38,207



34,929  24




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Fiscal Year2009

2008

2007

2006

2005(In thousands, except per share data)Selected Consolidated Balance Sheet Data:Cash and cash equivalents

$
4,079


$
5,589


$
6,309


$
938


$
1,952Investments

$



$



$



$
18,962


$
32,918Total assets

$
31,570


$
42,781


$
56,412


$
75,757


$
76,544Total stockholders equity (deficit)

$
9,325


$
19,026


$
33,846


$
50,631


$
56,208Selected Consolidated Statement of Cash Flow Data:Net cash (used in) provided by operating activities

$
(1,190
)

$
2,044


$
(2,370
)

$
3,949


$
4,249Net cash (used in) provided by investing activities

$
(682
)

$
(2,817
)

$
5,727


$
(6,674
)

$
(31,536
)Net cash provided by financing activities

$
362


$
53


$
2,013


$
1,711


$
36,648Selected Operating Data:Company-owned restaurants open at the end of the fiscal year


99



101



107



110



96   Item 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  The following discussion and analysis of our financial
    condition and results of operations for the fiscal years ended
    December 28, 2009, December 29, 2008, and
    December 31, 2007 should be read in conjunction with
    Selected Consolidated Financial Data and our audited
    consolidated financial statements and the notes to those
    statements that are included elsewhere in this Annual Report.
    Our discussion contains forward-looking statements based upon
    current expectations that involve risks and uncertainties, such
    as our plans, objectives, expectations and intentions. Actual
    results and the timing of events could differ materially from
    those anticipated in these forward-looking statements as a
    result of a number of factors, including those set forth under
    Cautionary Note Regarding Forward-Looking Statements
    below and elsewhere in this Annual Report.
  Business
    Overview
  System-wide
    Restaurants:
  Fiscal Year2009


2008


2007Company-








Company-








Company-Owned


Franchise


Total


Owned


Franchise


Total


Owned


Franchise


TotalRestaurants at beginning of period


101



50



151



107
b


34



141



110
a


13



123New restaurants opened


2



6



8



1



19



20



6



22



28Restaurants permanently closed


4



10



14



7



3



10



9



1



10Restaurants at end of period


99



46



145



101



50



151



107
b


34



141     a
    
     Includes nine locations that are classified as
    discontinued operations.b
    
     Includes three locations that are classified as
    discontinued operations.   25




---



##### Table of Contents



made-to-order and/or
    ®
  ®
    Critical
    Accounting Policies
      Long Lived Assets: 360-10-35 Property, Plant, & Equipment
 26




---



##### Table of Contents



ramp-up
  Lease Termination Charges: 820-30 Exit or Disposal Cost Obligations
  Accounting for Lease Obligations: 840-25 Leases
  Landlord Allowances: 840-25 Leases
  Stock-Based Compensation Expense: 718-10-25 Compensation  Stock Compensation
      Income Taxes:
  740-10 Income Taxes
  Revenue
  Restaurant Net Sales.
  Franchise Fees and Royalties.
 27




---



##### Table of Contents



Gift Card Sales.
  Comparable
    Restaurant Sales
    Costs and
    Expenses
  Cost of Food and Beverage.
  Restaurant Labor and Related Benefits.
  Occupancy and Other Restaurant Operating
    Expenses.
  General and Administrative Expenses.
  Depreciation and Amortization.
  Restaurant Pre-opening Expenses.
 28




---



##### Table of Contents



Results
    of Operations
    Fiscal Year2009


2008


2007Revenues:Restaurant net sales


98.1
%


97.7
%


98.4
%Franchise fees and royalties


1.9



2.3



1.6Total revenues


100.0



100.0



100.0Cost and expenses:Cost of food and beverage(1)


22.7



22.8



23.4Restaurant labor and related benefits(1)


36.7



34.2



34.7Occupancy and other restaurant operating expenses(1)


31.5



30.1



29.090.9



87.1



87.1General and administrative expenses


12.7



14.7



17.1Depreciation and amortization


5.9



6.2



6.6Restaurant pre-opening expenses






0.1



0.5Provision for losses on asset impairments and disposals


1.3



5.2



2.9Closed store costs






0.1



0.2Lease termination expense, net


0.3



0.4



0.3Gain on sale of assets


(0.1
)






Total costs and expenses


109.4



111.8



113.2Operating loss


(9.4
)


(11.8
)


(13.2
)Other income (expense):Interest income










0.4Interest expense










Other income










0.5Loss from continuing operations


(9.4
)


(11.8
)


(12.3
)Discontinued operations:Operating loss from discontinued operations






(0.2
)


(0.7
)Asset impairments of discontinued operations










(2.4
)Loss from discontinued operations






(0.2
)


(3.1
)Net loss


(9.4
)%


(12.0
)%


(15.4
)%     (1)
    
    These are expressed as a pecentage of restaurant net sales
    versus all other items expressed as a percentage of total
    revenues.  Fiscal
    Year 2009 (52 weeks) compared to Fiscal Year 2008
    (52 weeks)
  Restaurant
    Net Sales
  Restaurant Net SalesAs a % of Total(In thousands)

RevenuesFiscal 2009

$
116,375



98.1
%Fiscal 2008

$
132,501



97.7
%  29




---



##### Table of Contents



Franchise
    Fees and Royalties
  Franchise Fees and RoyaltiesAs a % of Total(In thousands)

RevenuesFiscal 2009

$
2,198



1.9
%Fiscal 2008

$
3,078



2.3
%     Costs and
    Expenses
  Cost of Food and BeverageAs a % of Restaurant(In thousands)

Net SalesFiscal 2009

$
26,429



22.7
%Fiscal 2008

$
30,235



22.8
%   Cost of Food and Beverage. year-over-year
  Restaurant Labor andRelated BenefitsAs a % of Restaurant(In thousands)

Net SalesFiscal 2009

$
42,742



36.7
%Fiscal 2008

$
45,375



34.2
%   Restaurant Labor and Related Benefits.
  Occupancy and Other Restaurant Operating ExpensesAs a % of Restaurant(In thousands)

Net SalesFiscal 2009

$
36,617



31.5
%Fiscal 2008

$
39,821



30.1
%   Occupancy and Other Restaurant Operating
    Expenses.
  30




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##### Table of Contents



General and Administrative ExpensesAs a % of Total(In thousands)

Revenues(In thousands)Fiscal 2009

$
15,044



12.7
%Fiscal 2008

$
19,966



14.7
%   General and Administrative Expenses.
  Depreciation and AmortizationAs a % of Total(In thousands)

RevenuesFiscal 2009

$
7,050



5.9
%Fiscal 2008

$
8,409



6.2
%   Depreciation and Amortization.
  Restaurant Pre-opening ExpensesAs a % of Total(In thousands)

RevenuesFiscal 2009

$
13



Fiscal 2008

$
100



0.1
%   Restaurant Pre-Opening Expenses.
  Provision for Losses on Asset Impairments and DisposalsAs a % of Total(In thousands)

RevenuesFiscal 2009

$
1,530



1.3
%Fiscal 2008

$
7,099



5.2
%   Provision for Losses on Asset Impairments and
    Disposals.
  Closed Store CostsAs a % of Total(In thousands)

RevenuesFiscal 2009

$
48



Fiscal 2008

$
69



0.1
%  31




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##### Table of Contents



Closed Store Costs.
  Lease Termination Expense, netAs a % of Total(In thousands)

RevenuesFiscal 2009

$
322



0.3
%Fiscal 2008

$
551



0.4
%   Lease Termination Expense, net.
  Gain on Sale of AssetsAs a % of Total(In thousands)

RevenuesFiscal 2009

$
102



0.1
%Fiscal 2008






   Gain on Sale of Assets.
  Interest Income

Interest ExpenseAs a % of



As a % ofTotal



Total(In thousands)

Revenues

(In thousands)

RevenuesFiscal 2009

$
3






$
4



Fiscal 2008

$
102






$
7



   Interest Income and Expense.
  Other IncomeAs a % of Total(In thousands)

RevenuesFiscal 2009

$
17



Fiscal 2008

$
41



   Other income.
  Loss from Continuing OperationsAs a % of Total(In thousands)

Revenues(In thousands)Fiscal 2009

$
(11,104
)


(9.4
)%Fiscal 2008

$
(15,910
)


(11.8
)%   Loss from Continuing Operations.
 32




---



##### Table of Contents



Discontinued Operations.
  Fiscal
    Year 2008 (52 weeks) compared to Fiscal Year 2007
    (52 weeks)
  Restaurant
    Net Sales
  Restaurant Net SalesAs a % of Total(In thousands)

RevenuesFiscal 2008

$
132,501



97.7
%Fiscal 2007

$
132,414



98.4
%     Franchise
    Fees and Royalties
  Franchise Fees and RoyaltiesAs a % of Total(In thousands)

RevenuesFiscal 2008

$
3,078



2.3
%Fiscal 2007

$
2,142



1.6
%     Costs and
    Expenses
  Cost of Food and BeverageAs a % of Restaurant(In thousands)

Net SalesFiscal 2008

$
30,235



22.8
%Fiscal 2007

$
30,972



23.4
%   Cost of Food and Beverage. year-over-year
  33




---



##### Table of Contents



Restaurant Labor and Related BenefitsAs a % of Restaurant(In thousands)

Net SalesFiscal 2008

$
45,375



34.2
%Fiscal 2007

$
45,995



34.7
%   Restaurant Labor and Related Benefits.
  Occupancy and Other Restaurant Operating ExpensesAs a % of Restaurant(In thousands)

Net Sales(In thousands)Fiscal 2008

$
39,821



30.1
%Fiscal 2007

$
38,369



29.0
%   Occupancy and Other Restaurant Operating
    Expenses.
  General and Administrative ExpensesAs a % of Total(In thousands)

RevenuesFiscal 2008

$
19,966



14.7
%Fiscal 2007

$
22,973



17.1
%   General and administrative Expenses.
  Depreciation and AmortizationAs a % of Total(In thousands)

RevenuesFiscal 2008

$
8,409



6.2
%Fiscal 2007

$
8,823



6.6
%   Depreciation and Amortization.
  Restaurant Pre-opening ExpensesAs a % of Total(In thousands)

RevenuesFiscal 2008

$
100



0.1
%Fiscal 2007

$
710



0.5
%   Restaurant Pre-Opening Expenses.
 34




---



##### Table of Contents



Provision for Losses on Asset Impairments and DisposalsAs a % of Total(In thousands)

RevenuesFiscal 2008

$
7,099



5.2
%Fiscal 2007

$
3,845



2.9
%   Provision for Losses on Asset Impairments and
    Disposals.
  Closed Store CostsAs a % of Total(In thousands)

RevenuesFiscal 2008

$
69



0.1
%Fiscal 2007

$
262



0.2
%   Closed Store Costs.
  Lease Termination Expense, netAs a % of Total(In thousands)

RevenuesFiscal 2008

$
551



0.4
%Fiscal 2007

$
347



0.3
%   Lease Termination Expense, net.
  Gain on Sale of AssetsAs a % of Total(In thousands)

RevenuesFiscal 2008






Fiscal 2007

$
23



  35




---



##### Table of Contents



Gain on Sale of Assets.
  Interest Income

Interest ExpenseAs a % of Total



As a % of Total(In thousands)

Revenues

(In thousands)

RevenuesFiscal 2008

$
102






$
7



Fiscal 2007

$
524



0.4
%

$
42



   Interest Income and Expense.
  Other IncomeAs a % of Total(In thousands)

RevenuesFiscal 2008

$
41



Fiscal 2007

$
705



0.5
%   Other income.
  Loss from Continuing OperationsAs a % of Total(In thousands)

RevenuesFiscal 2008

$
(15,910
)


(11.8
)%Fiscal 2007

$
(16,530
)


(12.3
)%   Loss from Continuing Operations.
  Discontinued Operations.
    360-10-45, Property, Plant, Equipment
    Liquidity
    and Capital Resources
   36




---



##### Table of Contents



year-over-year
        and/or
   37




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
    Selected
    Quarterly Financial Data
    First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(Dollars in thousands, except share data)Fiscal 2009Total revenues

$
28,666


$
31,636


$
30,033


$
28,238Total costs and expenses

$
31,995


$
32,610


$
32,454


$
32,634Net loss

$
(3,326
)

$
(969
)

$
(2,362
)

$
(4,447
)Basic and diluted loss per share:

$
(0.08
)

$
(0.02
)

$
(0.06
)

$
(0.11
)Fiscal 2008Total revenues

$
33,191


$
36,723


$
34,930


$
30,735Total costs and expenses

$
35,979


$
38,447


$
38,078


$
39,121Net loss

$
(3,028
)

$
(1,729
)

$
(3,095
)

$
(8,370
)Basic and diluted loss per share:

$
(0.08
)

$
(0.04
)

$
(0.08
)

$
(0.21
)   Recent
    Accounting Pronouncements
    CAUTIONARY
    NOTE REGARDING FORWARD LOOKING STATEMENTS
  Form 10-K
    
    the cost of our principal food products and supply and delivery
    shortages or interruptions;
    labor shortages or increased labor costs;
    changes in demographic trends and consumer tastes and
    preferences, including changes resulting from concerns over
    nutritional or safety aspects of beef, poultry, produce or other
    foods or the effects of food-borne illnesses, such as E.coli,
    mad cow disease and avian influenza or bird
    flu; 38




---



##### Table of Contents




    competition in our markets, both in our existing business and
    locating suitable restaurant sites;
    our operation and execution in new and existing markets;
    expansion into new markets, including foreign countries;
    our ability to attract and retain qualified franchisees and our
    frachisees ability to open restaurants on a timely basis;
    our ability to locate suitable restaurant sites in new and
    existing markets and negotiate acceptable lease terms;
    the rate of our internal growth, and our ability to generate
    increased revenue from our new and existing restaurants;
    our ability to generate positive cash flow from existing and new
    restaurants;
    fluctuations in our quarterly results due to seasonality;
    increased government regulation and our ability to secure
    required governmental approvals and permits;
    our ability to create customer awareness of our restaurants in
    new markets;
    the reliability of our customer and market studies;
    cost effective and timely planning, design and build-out of new
    restaurants;
    our ability to recruit, train and retain qualified corporate and
    restaurant personnel and management;
    market saturation due to new restaurant openings;
    inadequate protection of our intellectual property;
    our ability to obtain additional capital and financing;
    adverse weather conditions, which impact customer traffic at our
    restaurants; and
    adverse economic conditions.    Item 7A:
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Interest
    Rate Risk
    Foreign
    Currency Risk
   39




---



##### Table of Contents



Inflation
    Item 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA    Item 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    Item 9A.
    CONTROLS
    AND PROCEDURES  Rule 13a-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
  Form 10-K.
  Rule 13a-15(f)
     40




---



##### Table of Contents



Internal
    Control-Integrated Framework
    Changes
    in Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
  Item 9B.
    OTHER
    INFORMATION   PART III  Item 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    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, AND DIRECTOR
    INDEPENDENCE    Item 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES   41




---



##### Table of Contents



PART IV  Item 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES        ExhibitNumber

Description of Exhibit2
.1

Merger Agreement by and among Xando, Incorporated, Xando Merger
    Corp. and Cosi Sandwich Bar, Inc. dated as of October 4, 1999
    (Filed as Exhibit 2.1 to the Companys Registration
    Statement on Form S-1, file #333-86390).3
.1

Amended and Restated Certificate of Incorporation of Cosi, Inc.
    (Filed as Exhibit 3.1 to the Companys Annual Report on
    Form 10-K for the period ended December 30, 2002).3
.2

Amended and Restated By-Laws of Cosi, Inc. (Filed as Exhibit 3.1
    to the Companys Quarterly Report on Form 10-Q for the
    fiscal quarter ended October 1, 2007).4
.1

Form of Certificate of Common Stock (Filed as Exhibit 4.1 to the
    Companys Registration Statement on Form S-1, file
    #333-86390).4
.2

Rights Agreement between Cosi, Inc. and American Stock Transfer
    and Trust Company as Rights Agent dated November 21, 2002 (Filed
    as Exhibit 4.2 to the Companys Annual Report on Form 10-K
    for the period ended December 30, 2002).4
.3

Amended and Restated Registration Agreement, dated as of March
    30, 1999 (Filed as Exhibit 4.3 to the Companys
    Registration Statement on Form S-1, file #333-86390).4
.4

Supplemental Registration Rights Agreement, dated as of August
    5, 2003 by and among the Company and the parties thereto (Filed
    as Exhibit 4.4.2 to the Companys Registration Statement on
    Form S-1,
    file #333-107689).4
.5

Amendment No. 1 to Rights Agreement dated as of November 21,
    2002, between Cosi, Inc. and American Stock Transfer and Trust
    Company, as rights agent (Filed as Exhibit 4.3 to the
    Companys Quarterly Report on Form 10-Q for the fiscal
    quarter ended March 31, 2003).4
.6

Amendment dated as of January 6, 2010, to Rights Agreement dated
    as of November 21, 2002, between Cosi, Inc. and American Stock
    Transfer Company, as rights agent (Filed as Exhibit 4.1 to the
    Companys Current Report on Form 8-K dated January 6, 2010).10
.1

Cosi, Inc. 2005 Omnibus Long-Term Incentive Plan (Filed as
    Exhibit C to the Companys Proxy Statement on Schedule 14A
    filed on March 31, 2005, file #000-50052).10
.2

Cosi Employee Stock Purchase Plan (Filed as Exhibit 10.2 to the
    Companys Registration Statement on Form S-1, file
    #333-86390).10
.3

Cosi Non-Employee Director Stock Incentive Plan (Filed as
    Exhibit 10.3 to the Companys Registration Statement on
    Form S-1, file #333-86390).10
.4

Cosi Sandwich Bar, Inc. Incentive Stock Option Plan (Filed as
    Exhibit 10.4 to the Companys Registration Statement on
    Form S-1, file #333-86390).10
.5.1

Terms of Employment between Cosi, Inc. and William E. Koziel,
    effective as of August 17, 2005 as described in the
    Companys Current Report on Form 8-K (Filed on August 23,
    2005).10
.5.2

Employment agreement, dated as of September 15, 2007 by and
    between the Company and James F. Hyatt (Filed as Exhibit 10.1 to
    the Companys Current Report on Form 8-K, dated September
    18, 2007).10
.5.3

General Separation and Release Agreement by and between the
    Company and Christopher Ames, dated August 26, 2008 (Filed as
    Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q
    for the fiscal quarter ended September 29, 2008).10
.5.4

General Separation and Release Agreement by and between the
    Company and Christopher Carroll, dated August 26, 2008 (Filed as
    Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q
    for the fiscal quarter ended September 29, 2008). 42




---



##### Table of Contents



ExhibitNumber

Description of Exhibit10
.5.5

Form of Indemnification Agreement, dated as of December 19, 2008
    by and between the Directors and Officers of the Company (filed
    as Exhibit 10.1 to the Companys Current Report on Form
    8-K, dated December 18, 2008).10
.5.6

Change in Control Severance Agreement, dated as of December 18,
    2008 by and between William Koziel and the Company (filed as
    Exhibit 10.2 to the Companys Current Report on Form 8-K,
    dated December 18, 2008).10
.5.7

Change in Control Severance Agreement, dated as of December 18,
    2008 by and between Vicki Baue and the Company (filed as Exhibit
    10.2 to the Companys Current Report on Form 8-K, dated
    December 18, 2008).10
.5.8

Change in Control Severance Agreement, dated as of December 18,
    2008 by and between Paul Bower and the Company (filed as Exhibit
    10.2 to the Companys Current Report on Form 8-K, dated
    December 18, 2008).10
.5.9

Change in Control Severance Agreement, dated as of December 18,
    2008 by and between Becky Iliff and the Company (filed as
    Exhibit 10.2 to the Companys Current Report on Form 8-K,
    dated December 18, 2008).10
.5.10

First Amendment to Employment Agreement, dated as of December
    18, 2008 by and between the Company and James Hyatt (filed as
    Exhibit 10.5 to the Companys Current Report on Form 8-K,
    dated December 18, 2008).10
.5.11

Form of Purchase Agreement, dated as of September 28, 2009, for
    Jim Hyatt, Bill Koziel, Vicki Baue, Paul Bower, Becky
    Iliff, Maggie Martensen, Bob Merritt, Creed Ford, Mark Demilio,
    Karl Okamoto and Mike ODonnell (Filed as Exhibit 10.1 to
    the Companys Registration Statement on Form S-3
    (Commission File No. 333-162233)).10
.6.1

Foodservice Distribution Agreement between Cosi, Inc. and
    Distribution Market Advantage, Inc. dated as of November 1,
    2005.(1)10
.7.1

Cosi, Inc. Form of Franchise Agreement (Filed as Exhibit 10.5 to
    the Companys Quarterly Report on Form 10-Q for the
    fiscal quarter ended July 4, 2005).10
.7.2

Cosi, Inc. Form of Area Developer Franchise Agreement (Filed as
    Exhibit 10.6 to the Companys Quarterly Report on Form 10-Q
    for the fiscal quarter ended July 4, 2005).10
.8

Form of Senior Secured Note and Warrant Purchase Agreement
    (Filed as Exhibit 10.7 to the Companys Registration on
    Form S-1, file #333-86390).10
.9

Securities Purchase Agreement dated as of April 27, 2004 (Filed
    as Exhibit 10.1 to the Companys Current Report on Form
    8-K, dated April 28, 2004).10
.10

Form of Restricted Stock Award Agreement (Filed as Exhibit 10.1
    to the Companys Current Report of Form 8-K, dated June 6,
    2005).16


Letter from Ernst & Young LLP to the Securities and
    Exchange Commission, dated as of August 13, 2004, acknowledging
    its agreement with the statements made in Current Report on Form
    8-K (Filed as Exhibit 16 to the Companys Current Report on
    Form 8-K, dated August 13, 2004).21


Subsidiaries of Cosi, Inc. (Filed as Exhibit 21.1 to the
    Companys Registration Statement on Form S-1,
    file #333-86390).23
.1

Filed herewith Consent of BDO Seidman, LLP, Registered Public
    Accounting Firm.31
.1

Filed herewith Certification of the Chief Executive Officer
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31
.2

Filed herewith Certification of the Chief Financial Officer
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32
.1

Filed herewith Certification of the Chief Executive Officer and
    Chief Financial Officer pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.     (1)
    
    Portions of Exhibit 10.6.1 have been omitted and filed
    separately with the Securities and Exchange Commission pursuant
    to a request for confidential treatment. 43




---



##### 



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageReport of BDO Seidman, LLP, Independent
    Registered Public Accounting Firm


45Consolidated Balance Sheets as of
    December 28, 2009 and December 29, 2008


46Consolidated Statements of Operations for the
    Fiscal Years Ended December 28, 2009, December 29,
    2008, and December 31, 2007


47Consolidated Statements of Stockholders
    Equity for the Fiscal Years Ended December 28, 2009,
    December 29, 2008, and December 31, 2007


48Consolidated Statements of Cash Flows for the
    Fiscal Years Ended December 28, 2009, December 29,
    2008, and December 31, 2007


49Notes to Consolidated Financial Statements for
    the Fiscal Years Ended December 28, 2009, December 29,
    2008, and December 31, 2007


50-68   44




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm          ,
      45




---



##### Table of Contents



Cosi,
    Inc.
  Consolidated Balance Sheets
 As of
    December 28, 2009 and December 29, 2008
  December 28,


December 29,2009


2008(Dollars in thousands)ASSETSCurrent assets:Cash and cash equivalents

$
4,079


$
5,589Accounts receivable, net


560



916Inventories


967



998Prepaid expenses and other current assets


2,136



3,650Total current assets


7,742



11,153Furniture and fixtures, equipment and leasehold improvements, net


22,100



29,779Intangibles, security deposits and other assets


1,728



1,849Total assets

$
31,570


$
42,781LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
3,079


$
3,378Accrued expenses


9,628



9,835Deferred franchise revenue


44



149Current liabilities of discontinued operations






4Current portion of other long-term liabilities


588



668Total current liabilities


13,339



14,034Deferred franchise revenue


2,563



2,545Other long-term liabilities, net of current portion


6,343



7,176Total liabilities


22,245



23,755Commitments and contingenciesStockholders equity:Common stock  $.01 par value;
    100,000,000 shares authorized, 40,862,474 and
    40,663,189 shares issued, respectively


409



407Additional paid-in capital


277,994



276,593Treasury stock, 239,543 shares at cost


(1,198
)


(1,198
)Accumulated deficit


(267,880
)


(256,776
)Total stockholders equity


9,325



19,026Total liabilities and stockholders equity

$
31,570


$
42,781    46




---



##### Table of Contents



Cosi,
    Inc.
  Consolidated
    Statements of Operations
 For the
    Fiscal Years Ended December 28, 2009, December 29,
    2008 and December 31, 2007
  December 28,


December 29,


December 31,2009


2008


2007(Dollars in thousands, except per share data)Revenues:Restaurant net sales

$
116,375


$
132,501


$
132,414Franchise fees and royalties


2,198



3,078



2,142Total revenues


118,573



135,579



134,556Costs and expenses:Cost of food and beverage


26,429



30,235



30,972Restaurant labor and related benefits


42,742



45,375



45,995Occupancy and other restaurant operating expenses


36,617



39,821



38,369105,788



115,431



115,336General and administrative expenses


15,044



19,966



22,973Depreciation and amortization


7,050



8,409



8,823Restaurant pre-opening expenses


13



100



710Provision for losses on asset impairments and disposals


1,530



7,099



3,845Closed store costs


48



69



262Lease termination expense (benefit), net


322



551



347Gain on sale of assets


(102
)






(23
)Total costs and expenses


129,693



151,625



152,273Operating loss


(11,120
)


(16,046
)


(17,717
)Other income (expense):Interest income


3



102



524Interest expense


(4
)


(7
)


(42
)Other income


17



41



705Total other income (expense)


16



136



1,187Loss from continuing operations


(11,104
)


(15,910
)


(16,530
)Discontinued operations:Operating loss from discontinued operations






(224
)


(903
)Asset impairments of discontinued operations






(88
)


(3,350
)Loss from discontinued operations






(312
)


(4,253
)Net loss

$
(11,104
)

$
(16,222
)

$
(20,783
)Per Share Data:Loss per share, basic and dilutedContinuing operations

$
(0.27
)

$
(0.40
)

$
(0.42
)Discontinued operations

$



$



$
(0.11
)Net loss

$
(0.27
)

$
(0.40
)

$
(0.53
)Weighted average common shares outstanding


40,423,424



40,078,962



39,334,753     47




---



##### Table of Contents



Cosi,
    Inc.
  Consolidated
    Statements of Stockholders Equity
 For the
    Fiscal Years Ended December 28, 2009, December 29,
    2008 and December 31, 2007
   Common Stock


Treasury StockAdditional


Shares of


AmountNumber of





Paid In


Treasury


Treasury


AccumulatedShares


Amount


Capital


Stock


Stock


Deficit


Total(Dollars in thousands, except share data)Balance, January 1, 2007


39,910,114



399



271,200



239,543



(1,198
)


(219,771
)


50,631Issuance of restricted stock, net of forfeitures


147,932



1



(1
)














Stock-based compensation










1,969















1,969Exercise of warrants


699



1



(1
)














Exercise of stock options


989,240



10



2,020















2,030Net loss






















(20,783
)


(20,783
)Balance, December 31, 2007


41,047,985



411



275,187



239,543



(1,198
)


(240,554
)


33,846Net forfeiture of restricted stock


(420,330
)


(4
)


4















Stock-based compensation










1,349















1,349Exercise of warrants


11,538























Exercise of stock options


23,971







53















53Net loss






















(16,222
)


(16,222
)Balance, December 29, 2008


40,663,164


$
407


$
276,593



239,543


$
(1,198
)

$
(256,776
)

$
19,026Issuance of restricted stock, net of forfeitures


199,310



2



(2
)














Stock-based compensation










1,003















1,003Stock claim settlement










400















400Net loss






















(11,104
)


(11,104
)Balance, December 28, 2009


40,862,474


$
409


$
277,994



239,543


$
(1,198
)

$
(267,880
)

$
9,325     48




---



##### Table of Contents



Cosi,
    Inc.Consolidated Statements of Cash FlowsFor the Fiscal Years Ended December 28, 2009,
    December 29, 2008 and December 31, 2007
  December 28,


December 29,


December 31,2009


2008


2007(In thousands)Cash flows from operating activities:Net loss

$
(11,104
)

$
(16,222
)

$
(20,783
)Adjustments to reconcile net loss to net cash (used in) provided
    by operating activitiesDepreciation and amortization


7,050



8,414



9,233Gain on sale of assets


(102
)






(23
)Non-cash portion of asset impairments and disposals


1,530



7,187



7,195Non-cash portion of store closing costs






24



370Provision for bad debts


90



23



1Stock-based compensation expense


1,003



1,349



1,968Changes in operating assets and liabilities:Accounts receivable


267



(281
)


1,292Inventories


31



76



(87
)Prepaid expenses and other current assets


1,516



144



237Other assets


3



95



171Accounts payable and accrued expenses


(557
)


1,967



(1,074
)Deferred franchise revenue


(88
)


(819
)


(5
)Lease termination reserve


(83
)


608



(171
)Other liabilities


(746
)


(521
)


(693
)Net cash (used in) provided by operating activities


(1,190
)


2,044



(2,369
)Cash flows from investing activities:Capital expenditures


(901
)


(2,881
)


(14,363
)Proceeds from sale of assets


219



30



650Purchases of investments










(20,777
)Redemptions of investments










39,738Return of security deposits, net






34



479Net cash (used in) provided by investing activities


(682
)


(2,817
)


5,727Cash flows from financing activities:Proceed from stock claim settlement


400







Proceeds from issuance of common stock






53



2,030Principal payments on long-term debt


(38
)






(17
)Net cash provided by financing activities


362



53



2,013Net (decrease) increase in cash and cash equivalents


(1,510
)


(720
)


5,371Cash and cash equivalents, beginning of year


5,589



6,309



938Cash and cash equivalents, end of year

$
4,079


$
5,589


$
6,309Supplemental disclosures of cash flow information:Cash paid for:Interest

$
4


$
7


$
42Corporate franchise and income taxes

$
202


$
213


$
300    49




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##### Table of Contents



COSI,
    INC.Notes to Consolidated Financial Statements
    For the Fiscal Years Ended December 28, 2009,
    December 29, 2008, and December 31, 2007
  1.
    Organization
    and Summary of Significant Accounting Policies  Organization
    Fiscal
    Year
    Basis
    of Presentation
    105-10 Generally Accepted Accounting Principles
  Cash
    and Cash Equivalents
    Concentration
    of Credit Risks
      Accounts
    Receivable
    Inventories
  first-in,
 50




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##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Furniture
    and Fixtures, Equipment and Leasehold Improvements
      Long-Lived
    Assets
  restaurant-by-restaurant
    Property,
    Plant & Equipment,
  Prices in Active


Significant


SignificantTotal


Markets for


Observable


Unobservable


TotalDecember 28,


Identical Assets


Inputs


Inputs


Gains2009


(Level 1)


(Level 2)


(Level 3)


(Losses)(In thousands)Long-lived assets held and used

$
956


$



$



$
956


$
(1,530
)$
956


$



$



$
956


$
(1,530
)    51




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##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Accounting
    for Lease Obligations
    Intangibles,
    Security Deposits and Other Assets
    350-10, Intangibles  Goodwill and Other,
  Lease
    Termination Charges
     52




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##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    (In thousands)Balance as of January 1, 2007

$
431Charged to costs and expenses


347Deductions and adjustments


(518
)(a)Balance as of December 31, 2007


260Charged to costs and expenses


551Deductions and adjustments


57
(a)Balance as of December 29, 2008


868Charged to costs and expenses


322Deductions and adjustments


(405
)(a)Balance as of December 28, 2009


785     (a)
    
    Payments to landlords for lease obligations. Deductions and
    adjustments include payments to landlords for lease obligations.  Other
    Liabilities
    Income
    Taxes
      740-10, Income Taxes
   53




---



##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
        Revenue
    Recognition
  Restaurant Net Sales.
  Franchise Fees and Royalties.
  Gift Card Sales.
  Gain
    on Sale of Assets
    Restaurant
    Pre-opening Expenses
    Advertising
    Costs
   54




---



##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Net
    Loss Per Share
  No. EITF 03-6-1, Determining Whether Instruments Granted in Shared-Based
    Payment Transactions Are Participating Securities, 260-10).
  in-the-money In-the-money in-the-money Out-of-the-money out-of-the-money
  Stock-Based
    Compensation
  718-10-25 Compensation  Stock Compensation
  Segment
    Information
    Accounting
    Estimates
   55




---



##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Recent
    Accounting Pronouncements
  No. 2010-06, Fair Value Measurements and Disclosures No. 2009-05 2005-5) Fair Value Measurements and
    Disclosures 820-10 Fair Value Measurements and Disclosures SFAS 157-2,Effective SFAS 157-4
  105-10 Generally Accepted Accounting Principles 105-10-05
  855-10 Subsequent Events
  805-10 Business Combinations
  810-10 Consolidation 810-10
  815-10 Derivatives and Hedging
 56




---



##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2.
    Accounts
    Receivable    December 28,


December 29,2009


2008(In thousands)Accounts receivable, trade

$
295


$
262Due from franchisees


258



548Other


123



132Total receivables


676



942Less: allowance for doubtful accounts


(116
)


(26
)Accounts receivable, net

$
560


$
916     (In thousands)Balance as of January 1, 2007

$
4Charged to costs and expenses


12Deductions


(13
)(a)Balance as of December 31, 2007


3Charged to costs and expenses


18Deductions


5
(a)Balance as of December 29, 2008


26Charged to costs and expenses


120Deductions


(30
)(a)Balance as of December 28, 2009


116     (a)
    
    Recovery (write-off) of uncollectible accounts.  3.
    Prepaid
    Expenses and Other Current Assets  :
  December 28,


December 29,2009


2008(In thousands)Prepaid insurance

$
1,559


$
1,640Prepaid rent






1,631Other


577



379Prepaid expenses and other current assets

$
2,136


$
3,650  57




---



##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   4.
    Discontinued
    Operations      360-10-45, Property, Plant, Equipment
  Fiscal Year2009


2008


2007(In thousands)RevenuesRestaurant net sales

$



$
373


$
3,203Costs and expensesCost of food and beverage






107



949Restaurant labor and related expenses






188



1,580Occupancy and other restaurant operating expenses






181



1,168



476



3,697Depreciation and amortization






5



409Closed store costs






116



Total costs and expenses






597



4,106Operating loss from discontinued operations

$



$
(224
)

$
(903
)    58




---



##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   5.
    Furniture
    and Fixtures, Equipment and Leasehold Improvements    Fiscal Year2009


2008(In thousands)Leasehold improvements

$
41,652


$
42,997Restaurant equipment


19,826



20,174Furniture and fixtures


13,571



13,922Computer and telephone equipment


12,164



11,901Construction in progress






69Vehicles


30



30Total furniture and fixtures, equipment and leasehold
    improvements


87,243



89,093Less accumulated depreciation and amortization


(65,143
)


(59,314
)Furniture and fixtures, equipment and leasehold improvements, net

$
22,100


$
29,779     6.
    Intangibles,
    Security Deposits and Other Assets    Fiscal Year2009


2008(In thousands)Security deposits

$
874


$
949Liquor licenses


287



385Trademarks


195



195Other


372



320Total other assets

$
1,728


$
1,849   7.
    Accrued
    Expenses    December 28,


December 29,2009


2008(In thousands)Payroll and related benefits and taxes

$
2,040


$
1,873Insurance


1,652



1,596Unredeemed gift cards/certificates


1,351



1,183Utilities


1,086



1,253Taxes other than income taxes


878



845Rent


674



740Professional and legal


662



960Deferred credits


351



466Other


934



919  59




---



##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   8.
    Income
    Taxes    December 28,


December 29,2009


2008(In thousands)Deferred tax assets:Net operating loss carryforward

$
71,263


$
66,867Depreciation expense and impairment of long-lived assets


17,617



18,260Contractual lease increases


1,675



1,744Deferred franchise revenue


1,020



964Stock-based compensation


940



625Lease termination accrual


298



329Accrued expenses


594



486Allowance for doubtful accounts


44



10Total deferred tax assets


93,451



89,285Valuation allowance


(93,451
)


(89,285
)Net deferred taxes

$



$
       December 28,


December 29,


December 31,2009


2008


2007Statutory federal income tax rate


35.0
%


35.0
%


35.0
%State income taxes


3.0



3.0



3.038.0



38.0



38.0Less valuation allowance


(38.0
)


(38.0
)


(38.0
)Effective Tax Rate


0.0
%


0.0
%


0.0
%    60




---



##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   9.
    Stockholders
    Equity  Common
    Stock Purchase Rights
             61




---



##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Stock
    Purchase Warrants
    Rights
    Offering
    10.
    Stock-Based
    Employee Compensation  718-10-25 Compensation  Stock Compensation.
        Fiscal Year2009


2008


2007(In thousands)Stock option compensation expense

$
41


$
104


$
363Restricted stock compensation expense, net of forfeitures


962



1,245



1,605Total non-cash, stock-based compensation expense, net of
    forfeitures

$
1,003


$
1,349


$
1,968    62




---



##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    718-10-25 Compensation  Stock Compensation
  2005Expected dividend yield

0%Expected stock price volatility

68%Average risk-free interest rate

3.79%Average expected life of options

5 yearsWeighted average grant date fair value

$3.89   718-10-25 Compensation  Stock Compensation 718-10-25 Compensation  Stock Compensation paid-in-capital
      WeightedWeighted


Average


AggregateNumber of


Average Exercise


Remaining


IntrinsicOptions


Price


Contractual Term


Value(In years)


(In thousands)Outstanding as of January 1, 2007


3,279,008


$
6.32



5.9


$
4,339Granted






Exercised


(989,240
)

$
2.06Cancelled/Expired


(505,075
)

$
4.95Outstanding as of December 31, 2007


1,784,693


$
7.76



3.9


$
1Granted






Exercised


(23,971
)

$
2.24Cancelled/Expired


(456,652
)

$
8.52Outstanding as of December 29, 2008


1,304,070


$
7.60



1.7


$
Granted






Exercised






Cancelled/Expired


(641,536
)

$
2.18Outstanding as of December 28, 2009


662,534


$
9.96



1.3


$
Exercisable as of December 28, 2009


656,973


$
9.99



1.3


$
  63




---



##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    WeightedAverageTotal Exercisable at the end of the Year:

Options


Exercise PriceAs of December 28, 2009


656,973


$
9.99As of December 29, 2008


1,274,705


$
7.65As of December 31, 2007


1,638,067


$
7.98     Options Outstanding

Options ExercisableWeightedAverage

Weighted



WeightedNumber of

Remaining

Average

Number of

AverageOptions

Contractual

Exercise

Options

ExerciseRange of Exercise Prices

Outstanding

Life in Years

Price

Exercisable

Price$1.36 - $ 2.04


385



3.4


$
1.56



385


$
1.56$2.09 - $ 3.14


33,701



1.9



2.28



33,701



2.28$4.33 - $ 6.50


163,409



4.7



5.13



158,018



5.10$6.52 - $ 9.78


2,250



4.7



6.68



2,080



6.66$9.84 - $12.25


462,789



0.1



12.25



462,789



12.25662,534



1.3


$
9.96



656,973


$
9.99    64




---



##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Number of


WeightedShares of


AverageRestricted


Grant-DateStock


Fair ValueNon-vested at January 1, 2007


1,149,700


$
7.48Granted


698,250



3.73Vested


353,700



6.44Forfeited


(574,450
)


7.04Non-vested at December 31, 2007


919,800


$
5.31Granted


50,000



2.87Vested


288,600



4.95Forfeited/Canceled


(517,150
)


4.98Non-vested at December 29, 2008


164,050


$
5.31Granted


10,000



0.76Vested


80,850



6.47Forfeited/Canceled


(6,000
)


7.26Non-vested at December 28,2009


87,200


$
5.35   Number of


WeightedRestricted


AverageStock


Grant-DateUnits


Fair ValueNon-vested at December 31, 2007





$
Granted


265,000



3.24Vested






Forfeited






Non-vested at December 29, 2008


265,000



3.24Granted






Vested


155,000



3.24Forfeited






Non-vested at December 28, 2009


110,000


$
3.24     11.
    Defined
    Contribution Plan   65




---



##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    12.
    Commitments
    and Contingencies  Commitments
    Fiscal Year

Amount(In thousands)2010

$
15,5982011


14,3712012


12,6502013


9,6822014


7,456Thereafter


10,846$
70,603            66




---



##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
            Purchase
    Commitments
    Coca-Cola
   67




---



##### Table of Contents



COSI,
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Self-Insurance
    Litigation
     68




---



##### Table of Contents



SIGNATURES
      By:
    /s/  WILIAM
    KOZIEL    (Principal Financial Officer and
 Principal Accounting Officer)
      Signature

Title

Date/s/  MARK
    DEMILIOMark
    Demilio

Chairman of the Board

March 29, 2010/s/  JAMES
    F. HYATTJames
    F. Hyatt

Chief Executive Officer, President and Director(Principal Executive Officer)

March 29, 2010/s/  WILLIAM
    E. KOZIELWilliam
    E. Koziel

Chief Financial Officer, Secretary and Treasurer(Principal Financial Officer and 
    Principal Accounting Officer)

March 29, 2010/s/  CREED
    L. FORD IIICreed
    L. Ford III

Director

March 29, 2010/s/  ROBERT
    MERRITTRobert
    Merritt

Director

March 29, 2010/s/  MICHAEL
    ODONNELLMichael
    ODonnell

Director

March 29, 2010/s/  KARL
    S. OKAMOTOKarl
    S. Okamoto

Director

March 29, 2010  69




---



##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description of Exhibit2
.1

Merger Agreement by and among Xando, Incorporated, Xando Merger
    Corp. and Cosi Sandwich Bar, Inc. dated as of October 4,
    1999 (Filed as Exhibit 2.1 to the Companys
    Registration Statement on
    Form S-1,
    file #333-86390).3
.1

Amended and Restated Certificate of Incorporation of Cosi, Inc.
    (Filed as Exhibit 3.1 to the Companys Annual Report
    on
    Form 10-K
    for the period ended December 30, 2002).3
.2

Amended and Restated By-Laws of Cosi, Inc. (Filed as
    Exhibit 3.1 to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended October 1, 2007).4
.1

Form of Certificate of Common Stock (Filed as Exhibit 4.1
    to the Companys Registration Statement on
    Form S-1,
    file #333-86390).4
.2

Rights Agreement between Cosi, Inc. and American Stock Transfer
    and Trust Company as Rights Agent dated November 21,
    2002 (Filed as Exhibit 4.2 to the Companys Annual
    Report on
    Form 10-K
    for the period ended December 30, 2002).4
.3

Amended and Restated Registration Agreement, dated as of
    March 30, 1999 (Filed as Exhibit 4.3 to the
    Companys Registration Statement on
    Form S-1,
    file #333-86390).4
.4

Supplemental Registration Rights Agreement, dated as of
    August 5, 2003 by and among the Company and the parties
    thereto (Filed as Exhibit 4.4.2 to the Companys
    Registration Statement on
    Form S-1,
    file #333-107689).4
.5

Amendment No. 1 to Rights Agreement dated as of
    November 21, 2002, between Cosi, Inc. and American Stock
    Transfer and Trust Company, as rights agent (Filed as
    Exhibit 4.3 to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended March 31, 2003).4
.6

Amendment dated as of January 6, 2010, to Rights Agreement
    dated as of November 21, 2002, between Cosi, Inc. and
    American Stock Transfer Company, as rights agent (Filed as
    Exhibit 4.1 to the Companys Current Report on
    Form 8-K
    dated January 6, 2010).10
.1

Cosi, Inc. 2005 Omnibus Long-Term Incentive Plan (Filed as
    Exhibit C to the Companys Proxy Statement on
    Schedule 14A filed on March 31, 2005, file #000-50052.10
.2

Cosi Employee Stock Purchase Plan (Filed as Exhibit 10.2 to
    the Companys Registration Statement on
    Form S-1,
    file #333-86390).10
.3

Cosi Non-Employee Director Stock Incentive Plan (Filed as
    Exhibit 10.3 to the Companys Registration Statement
    on
    Form S-1,
    file #333-86390).10
.4

Cosi Sandwich Bar, Inc. Incentive Stock Option Plan (Filed as
    Exhibit 10.4 to the Companys Registration Statement
    on
    Form S-1,
    file #333-86390).10
.5.1

Terms of Employment between Cosi, Inc. and William E. Koziel,
    effective as of August 17, 2005 as described in the
    Companys Current Report on
    Form 8-K
    (Filed on August 23, 2005).10
.5.2

Employment agreement, dated as of September 15, 2007 by and
    between the Company and James F. Hyatt (Filed as
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    dated September 18, 2007).10
.5.3

General Separation and Release Agreement by and between the
    Company and Christopher Ames, dated August 26, 2008 (Filed
    as Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended September 29, 2008).10
.5.4

General Separation and Release Agreement by and between the
    Company and Christopher Carroll, dated August 26, 2008
    (Filed as Exhibit 10.2 to the Companys Quarterly
    Report on
    Form 10-Q
    for the fiscal quarter ended September 29, 2008).10
.5.5

Form of Indemnification Agreement, dated as of December 19,
    2008 by and between the Directors and Officers of the Company
    (filed as Exhibit 10.1 to the Companys Current Report
    on
    Form 8-K,
    dated December 18, 2008).10
.5.6

Change in Control Severance Agreement, dated as of
    December 18, 2008 by and between William Koziel and the
    Company (filed as Exhibit 10.2 to the Companys
    Current Report on
    Form 8-K,
    dated December 18, 2008). 70




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##### Table of Contents



ExhibitNumber

Description of Exhibit10
.5.7

Change in Control Severance Agreement, dated as of
    December 18, 2008 by and between Vicki Baue and the Company
    (filed as Exhibit 10.2 to the Companys Current Report
    on
    Form 8-K,
    dated December 18, 2008).10
.5.8

Change in Control Severance Agreement, dated as of
    December 18, 2008 by and between Paul Bower and the Company
    (filed as Exhibit 10.2 to the Companys Current Report
    on
    Form 8-K,
    dated December 18, 2008).10
.5.9

Change in Control Severance Agreement, dated as of
    December 18, 2008 by and between Becky Iliff and the
    Company (filed as Exhibit 10.2 to the Companys
    Current Report on
    Form 8-K,
    dated December 18, 2008).10
.5.10

First Amendment to Employment Agreement, dated as of
    December 18, 2008 by and between the Company and James
    Hyatt (filed as Exhibit 10.5 to the Companys Current
    Report on
    Form 8-K,
    dated December 18, 2008).10
.5.11

Form of Purchase Agreement, dated as of September 28, 2009,
    for Jim Hyatt, Bill Koziel, Vicki Baue, Paul Bower, Becky Iliff,
    Maggie Martensen, Bob Merritt, Creed Ford, Mark Demilio, Karl
    Okamoto and Mike ODonnell (Filed as Exhibit 10.1 to
    the Companys Registration Statement on
    Form S-3
    (Commission File
    No. 333-162233)).10
.6.1

Foodservice Distribution Agreement between Cosi, Inc. and
    Distribution Market Advantage, Inc. dated as of November 1,
    2005.(1)10
.7.1

Cosi, Inc. Form of Area Developer Franchise Agreement (Filed as
    Exhibit 10.6 to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 4, 2005).10
.7.2

Cosi, Inc. Form of Area Developer Franchise Agreement (Filed as
    Exhibit 10.6 to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 4, 2005).10
.8

Form of Senior Secured Note and Warrant Purchase Agreement
    (Filed as Exhibit 10.7 to the Companys Registration
    on
    Form S-1,
    file #333-86390).10
.9

Securities Purchase Agreement dated as of April 27, 2004
    (Filed as Exhibit 10.1 to the Companys Current Report
    on
    Form 8-K,
    dated April 28, 2004).10
.10

Form of Restricted Stock Award Agreement (Filed as
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    dated June 6, 2005).16


Letter from Ernst & Young LLP to the Securities and
    Exchange Commission, dated as of August 13, 2004,
    acknowledging its agreement with the statements made in Current
    Report on
    Form 8-K
    (Filed as Exhibit 16 to the Companys Current Report
    on
    Form 8-K,
    dated August 13, 2004.21


Subsidiaries of Cosi, Inc. (Filed as Exhibit 21.1 to the
    Companys Registration Statement on
    Form S-1,
    file #333-86390)23
.1

Filed herewith Consent of BDO Seidman, LLP, Independent
    Registered Public Accounting Firm31
.1

Filed herewith Certification of the Chief Executive Officer
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31
.2

Filed herewith Certification of the Chief Financial Officer
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32
.1

Certification of the Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.     (1)
    
    Portions of Exhibit 10.6.1 have been omitted and filed
    separately with the Securities and Exchange Commission pursuant
    to a request for confidential treatment. 71