UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-K/A
 (Amendment
No. 1) FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED DECEMBER 28, 2008
 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 333-116310
 
 Real Mex Restaurants, Inc.
  DELAWARE
    
    13-4012902(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)5660 Katella Avenue, Suite 100, Cypress, CA
    
    90630(Address of principal executive offices)
    
    (Zip Code)
 (562) 346-1200
 Securities registered pursuant to Section 12(b) of the Act: NONE
 Securities registered pursuant to Section 12(g) of the Act: NONE
 o þ
 o þ
 þ o
 þ
  Large Accelerated Filer o
    
    Accelerated Filer o
    
    Non-Accelerated Filer þ
    
    Smaller Reporting Company o
 o þ
   None




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##### 



EXPLANATORY NOTE This Amendment No. 1 to our Annual Report on Form 10-K for the fiscal year ended December 28, 2008, filed with the
Securities and Exchange Commission on March 30, 2009 (the Original Filing) is being filed to correct a typographical
error appearing in the content of Item 7, Managements Discussion and Analysis of Financial Condition and Results of
Operations and Item 8, Notes to Consolidated Financial Statements. The error appears in the fourth paragraph on page
23 and the fifth paragraph on page 42 of the Original Filing. The final sentences in these paragraphs indicate that
$5.1 million was outstanding under the New Senior Secured Letter of Credit Facility at December 28, 2008, but have been
corrected to indicate that $5.1 million remained available under the New Senior Secured Letter of Credit Facility at
December 28, 2008. Additionally, corrections have been made for immaterial typographical errors within Item 6,
Selected Financial Data and Item 7, Managements Discussion and Analysis of Financial Condition and Results of
Operations. Except as described above, no other changes have been made to the Original Filing. We have not updated the information
contained herein for events occurring subsequent to the filing date of the Original Filing. New certifications of our
principal executive and financial officer are included as exhibits to this amendment. 2




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##### 



Successor
    
    
    PredecessorNovember
    
    
    December
    
    
    Fiscal
    
    
    August
    
    
    December14, 2008 to
    
    
    31, 2007 to
    
    
    Year
    
    
    21, 2006 to
    
    
    26, 2005 to
    
    
    PredecessorDecember
    
    
    November
    
    
    Ended
    
    
    December
    
    
    August
    
    
    Fiscal Year Ended28, 2008
    
    
    13, 2008
    
    
    2007
    
    
    31, 2006
    
    
    20, 2006
    
    
    2005(4)
    
    
    2004(in thousands)Statement of Operations Data:Restaurant revenues
    
    $
    52,448
    
    
    $
    456,587
    
    
    $
    523,352
    
    
    $
    179,630
    
    
    $
    351,591
    
    
    $
    510,013
    
    
    $
    314,157Other revenue
    
    
    4,571
    
    
    
    37,110
    
    
    
    38,164
    
    
    
    11,094
    
    
    
    18,358
    
    
    
    20,532
    
    
    
    10,787Total revenues
    
    
    57,316
    
    
    
    496,429
    
    
    
    565,191
    
    
    
    192,098
    
    
    
    372,552
    
    
    
    534,296
    
    
    
    326,810Cost of sales
    
    
    14,255
    
    
    
    123,878
    
    
    
    140,824
    
    
    
    46,883
    
    
    
    87,388
    
    
    
    127,126
    
    
    
    80,839Labor
    
    
    21,210
    
    
    
    178,962
    
    
    
    199,843
    
    
    
    67,729
    
    
    
    125,748
    
    
    
    186,390
    
    
    
    118,888Direct operating and occupancy expense
    
    
    14,886
    
    
    
    133,337
    
    
    
    148,088
    
    
    
    51,127
    
    
    
    94,422
    
    
    
    140,648
    
    
    
    76,760Total operating costs
    
    
    50,351
    
    
    
    436,177
    
    
    
    488,755
    
    
    
    165,739
    
    
    
    307,558
    
    
    
    454,164
    
    
    
    276,487General and administrative expenses
    
    
    3,219
    
    
    
    25,726
    
    
    
    31,718
    
    
    
    11,414
    
    
    
    18,893
    
    
    
    28,346
    
    
    
    17,725Depreciation and amortization
    
    
    3,750
    
    
    
    21,724
    
    
    
    23,961
    
    
    
    10,323
    
    
    
    12,230
    
    
    
    18,498
    
    
    
    11,837Goodwill impairment
    
    
    
    
    
    
    163,196
    
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating (loss) income
    
    
    (19
    )
    
    
    (158,668
    )
    
    
    6,854
    
    
    
    3,379
    
    
    
    18,150
    
    
    
    31,433
    
    
    
    20,299Interest expense
    
    
    4,108
    
    
    
    16,407
    
    
    
    19,326
    
    
    
    10,481
    
    
    
    16,005
    
    
    
    22,973
    
    
    
    12,528Debt termination costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,677(Loss) income before income tax provision
    
    
    (4,103
    )
    
    
    (173,061
    )
    
    
    (10,802
    )
    
    
    (8,238
    )
    
    
    2,787
    
    
    
    8,677
    
    
    
    4,546Net (loss) income
    
    
    (4,103
    )
    
    
    (173,113
    )
    
    
    (23,546
    )
    
    
    (5,047
    )
    
    
    1,480
    
    
    
    13,386
    
    
    
    13,616Redeemable preferred stock accretion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,126
    )
    
    
    (14,583
    )
    
    
    (11,862
    )Net (loss) income attributable to common
stockholders(1)
    
    $
    (4,103
    )
    
    $
    (173,113
    )
    
    $
    (23,546
    )
    
    $
    (5,047
    )
    
    $
    (8,646
    )
    
    $
    (1,197
    )
    
    $
    1,754Balance Sheet Data:Cash and cash equivalents
    
    
    2,099
    
    
    
    
    
    
    
    2,323
    
    
    
    2,710
    
    
    
    
    
    
    
    14,871
    
    
    
    10,690Property and equipment, net
    
    
    110,505
    
    
    
    
    
    
    
    96,179
    
    
    
    90,802
    
    
    
    
    
    
    
    82,592
    
    
    
    36,589Total assets
    
    
    298,328
    
    
    
    
    
    
    
    434,455
    
    
    
    447,135
    
    
    
    
    
    
    
    310,889
    
    
    
    186,951Total debt(2)
    
    
    161,813
    
    
    
    
    
    
    
    186,187
    
    
    
    183,905
    
    
    
    
    
    
    
    182,031
    
    
    
    106,503Total stockholders equity
    
    
    23,044
    
    
    
    
    
    
    
    163,113
    
    
    
    184,077
    
    
    
    
    
    
    
    50,584
    
    
    
    29,849Other Financial Data:Capital expenditures
    
    $
    736
    
    
    
    
    
    
    $
    34,404
    
    
    $
    23,545
    
    
    
    
    
    
    $
    23,408
    
    
    $
    9,982Ratio of earnings to fixed charges(3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.2
    x
    
    
    1.2
    x
 
 (1)
    
    Net (loss) income attributable to common stockholders includes the effect of the accretion of
the liquidation preference on the redeemable preferred stock which reduces net income or increases
net loss attributable to common stockholders for the relevant periods through August 20, 2006.(2)
    
    Total debt includes long-term debt, obligations under capital leases and unamortized debt
premium/discount.(3)
    
    For purposes of calculating the ratio of earnings to fixed charges, earnings consist of net
income before income taxes plus fixed charges. Fixed charges consist of interest expense on all
indebtedness, plus one-third of rental expense (the portion deemed representative of the interest
factor). For periods with a net loss before income taxes, this calculation is not performed since
the ratio is not meaningful.(4)
    
    Includes the results of Chevys since January 12, 2005, the date of acquisition.  3




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##### 



ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The following Managements Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements as a result of certain factors, including those set
forth under the heading Forward-Looking Statements above and elsewhere in this report. Unless
otherwise provided below, references to we, us and our Company refer to Real Mex
Restaurants, Inc. and our consolidated subsidiaries. The following discussion should be read in
conjunction with our consolidated financial statements and related notes thereto included elsewhere
in this report.
 Overview
  ·
           4




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##### 



Results of Operations
  Successor (1)
    
    
    Predecessor (1)November
    
    
    December
    
    
    Fiscal
    
    
    August
    
    
    December14, 2008 to
    
    
    31, 2007 to
    
    
    Year
    
    
    21, 2006 to
    
    
    26, 2005 toDecember
    
    
    November
    
    
    Ended
    
    
    December
    
    
    August28, 2008
    
    
    13, 2008
    
    

2007
(5)
    
    
    31, 2006
    
    
    20, 2006Total revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    24.9
    
    
    
    25.0
    
    
    
    24.9
    
    
    
    24.4
    
    
    
    23.5Labor
    
    
    37.0
    
    
    
    36.0
    
    
    
    35.4
    
    
    
    35.3
    
    
    
    33.8Direct operating and occupancy expense
    
    
    26.0
    
    
    
    26.9
    
    
    
    26.2
    
    
    
    26.6
    
    
    
    25.3Total operating costs
    
    
    87.8
    
    
    
    87.9
    
    
    
    86.5
    
    
    
    86.3
    
    
    
    82.6General and administrative expense
    
    
    5.6
    
    
    
    5.2
    
    
    
    5.6
    
    
    
    5.9
    
    
    
    5.1Depreciation and amortization
    
    
    6.5
    
    
    
    4.4
    
    
    
    4.2
    
    
    
    5.4
    
    
    
    3.3Goodwill impairment
    
    
    
    
    
    
    32.9
    
    
    
    1.8
    
    
    
    
    
    
    
    Operating (loss) income
    
    
    
    
    
    
    (32.0
    )
    
    
    1.2
    
    
    
    1.8
    
    
    
    4.9Interest expense
    
    
    7.2
    
    
    
    3.3
    
    
    
    3.4
    
    
    
    5.5
    
    
    
    4.3(Loss) income before income tax provision
    
    
    (7.2
    )
    
    
    (34.9
    )
    
    
    (1.9
    )
    
    
    (4.3
    )
    
    
    0.7Net (loss) income
    
    
    (7.2
    )
    
    
    (34.9
    )
    
    
    (4.2
    )
    
    
    (2.6
    )
    
    
    0.4
 
 (1)
    
    When combined, Fiscal Years 2008 and 2007 are comprised of 52 weeks and Fiscal Year 2006 is
comprised of 53 weeks.  5




---



##### 



Fiscal Year 2008 Compared to Fiscal Year 2007
 Total Revenues
 Cost of Sales
 Labor
 Direct Operating and Occupancy Expense
 General and Administrative Expense
 Depreciation and Amortization
 Goodwill Impairment.
 Interest Expense
  6




---



##### 



Income tax provision.
 Fiscal Year 2007 Compared to Fiscal Year 2006
 Total Revenues
 Cost of Sales
 Labor
 Direct
Operating and Occupancy Expense
 General
and Administrative Expense
 Depreciation
and Amortization
 Goodwill Impairment.
  7




---



##### 



Interest Expense
 Income tax provision.
 Liquidity and Capital Resources
  Working Capital and Cash Flows
  Operating Activities
 Investing Activities
   8




---



##### 



Financing Activities
 Debt and Other Obligations
 Senior Secured Notes due 2010
   Senior Secured Revolving Credit Facilities
    9




---



##### 



Senior Unsecured Credit Facility
   10




---



##### 



Mortgage.
 Capital Leases
  Less than
    
    
    
    
    
    
    
    
    
    
    More than 5Total
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    Years($ in thousands)Contractual ObligationsLong Term Debt Obligations(1)
    
    $
    178,833
    
    
    $
    8,313
    
    
    $
    170,166
    
    
    $
    199
    
    
    $
    155Capital Lease Obligations
    
    
    1,794
    
    
    
    565
    
    
    
    702
    
    
    
    223
    
    
    
    304Operating Lease Obligations(2)
    
    
    251,670
    
    
    
    41,389
    
    
    
    68,976
    
    
    
    52,301
    
    
    
    89,004Purchase Obligations
    
    
    43,810
    
    
    
    27,244
    
    
    
    5,522
    
    
    
    5,522
    
    
    
    5,522Total
    
    $
    476,107
    
    
    $
    77,511
    
    
    $
    245,366
    
    
    $
    58,245
    
    
    $
    94,985
 
 (1)
    
    Includes our Senior Secured Notes, unsecured term loan, New Senior Secured Revolving Credit
Facility, mortgage and an obligation to a vendor. We have not included any scheduled interest
payments in this table. Please see discussion of terms for each significant component of long
term debt above.(2)
    
    In addition to the base rent, many of our leases contain percentage rent clauses, which
obligate us to pay additional rents based on a percentage of sales, when sales levels exceed a
contractually defined base. We recorded such additional rent expenses of $198 in Successor
2008, $1,926 in Predecessor 2008, $2,164 in Predecessor 2007, $907 in Predecessor 2006-2 and
$1,755 in Predecessor 2006-1. Operating Lease Obligations do not reflect potential renewals
or replacements of expiring leases. Off-Balance Sheet Arrangements
  Inflation
    11




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##### 



Critical Accounting Policies
   Property and Equipment
  Long-Lived Asset Impairment
    Goodwill and Intangible Assets
   12




---



##### 



Self-Insurance
   Income Taxes
   Revenue Recognition
   13




---



##### 



Recent Accounting Pronouncements
    
  14




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
  15




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
  16




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##### 



Real Mex Restaurants, Inc.
 Consolidated Balance Sheets
 (In Thousands, Except For Share Data)
 Successor
    
    
    PredecessorDecember 28,
    
    
    December 30,2008
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    2,099
    
    
    $
    2,323Trade receivables, net
    
    
    9,102
    
    
    
    10,160Other receivables
    
    
    873
    
    
    
    2,594Inventories, net
    
    
    13,563
    
    
    
    12,049Deferred compensation plan assets
    
    
    1,848
    
    
    
    3,115Prepaid expenses and other current assets
    
    
    7,253
    
    
    
    7,186Current portion of favorable lease asset, net
    
    
    5,902
    
    
    
    3,454Total current assets
    
    
    40,640
    
    
    
    40,881Property and equipment, net
    
    
    110,505
    
    
    
    96,179Goodwill, net
    
    
    43,200
    
    
    
    160,621Trademarks and other intangibles
    
    
    68,900
    
    
    
    113,000Deferred charges
    
    
    1,404
    
    
    
    3,115Favorable lease asset, less current portion, net
    
    
    25,382
    
    
    
    11,313Other assets
    
    
    8,297
    
    
    
    9,346Total assets
    
    $
    298,328
    
    
    $
    434,455Liabilities and stockholders equityCurrent liabilities:Accounts payable
    
    $
    23,198
    
    
    $
    22,692Accrued self-insurance reserves
    
    
    15,619
    
    
    
    15,479Accrued compensation and benefits
    
    
    16,216
    
    
    
    17,402Other accrued liabilities
    
    
    15,426
    
    
    
    14,014Related party payables
    
    
    
    
    
    
    2,505Current portion of long-term debt
    
    
    8,313
    
    
    
    12,579Current portion of capital lease obligations
    
    
    453
    
    
    
    433Total current liabilities
    
    
    79,225
    
    
    
    85,104Long-term debt, less current portion
    
    
    152,105
    
    
    
    172,057Capital lease obligations, less current portion
    
    
    942
    
    
    
    1,118Deferred tax liabilities
    
    
    31,549
    
    
    
    Unfavorable lease liability, less current portion, net
    
    
    8,445
    
    
    
    4,394Other liabilities
    
    
    3,018
    
    
    
    8,669Total liabilities
    
    
    275,284
    
    
    
    271,342Commitments and contingencies
    
    
    
    
    
    
    Stockholders equity:Common stock, $.001 par value, 1,000 shares
authorized, issued and outstanding at December 28,
2008 and December 30, 2007
    
    
    
    
    
    
    Additional paid-in capital
    
    
    27,147
    
    
    
    201,706Accumulated deficit
    
    
    (4,103
    )
    
    
    (38,593
    )Total stockholders equity
    
    
    23,044
    
    
    
    163,113Total liabilities and stockholders equity
    
    $
    298,328
    
    
    $
    434,455
 See notes to consolidated financial statements.
  17




---



##### 



Real Mex Restaurants, Inc.
 Consolidated Statements of Operations
 (In Thousands)
 Successor
    
    
    PredecessorNovember 14,
    
    
    December 31,
    
    
    Fiscal
    
    
    August 21,
    
    
    December 26,2008 to
    
    
    2007 to
    
    
    Year Ended
    
    
    2006 to
    
    
    2005 toDecember 28,
    
    
    November 13,
    
    
    December 30,
    
    
    December 31,
    
    
    August 20,2008
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2006Revenues:Restaurant revenues
    
    $
    52,448
    
    
    $
    456,587
    
    
    $
    523,352
    
    
    $
    179,630
    
    
    $
    351,591Other revenues
    
    
    4,571
    
    
    
    37,110
    
    
    
    38,164
    
    
    
    11,094
    
    
    
    18,358Franchise revenues
    
    
    297
    
    
    
    2,732
    
    
    
    3,675
    
    
    
    1,374
    
    
    
    2,603Total revenues
    
    
    57,316
    
    
    
    496,429
    
    
    
    565,191
    
    
    
    192,098
    
    
    
    372,552Costs and expenses:Cost of sales
    
    
    14,255
    
    
    
    123,878
    
    
    
    140,824
    
    
    
    46,883
    
    
    
    87,388Labor
    
    
    21,210
    
    
    
    178,962
    
    
    
    199,843
    
    
    
    67,729
    
    
    
    125,748Direct operating and occupancy expense
    
    
    14,886
    
    
    
    133,337
    
    
    
    148,088
    
    
    
    51,127
    
    
    
    94,422General and administrative expense
    
    
    3,219
    
    
    
    25,726
    
    
    
    31,718
    
    
    
    11,414
    
    
    
    18,893Depreciation and amortization
    
    
    3,750
    
    
    
    21,724
    
    
    
    23,961
    
    
    
    10,323
    
    
    
    12,230Legal settlement costs
    
    
    15
    
    
    
    781
    
    
    
    402
    
    
    
    19
    
    
    
    4,180Merger costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    307
    
    
    
    9,434Pre-opening costs
    
    
    
    
    
    
    2,342
    
    
    
    2,139
    
    
    
    917
    
    
    
    910Impairment of goodwill and intangible assets
    
    
    
    
    
    
    163,196
    
    
    
    10,000
    
    
    
    
    
    
    
    Impairment of property and equipment
    
    
    
    
    
    
    5,151
    
    
    
    1,362
    
    
    
    
    
    
    
    1,197Operating (loss) income
    
    
    (19
    )
    
    
    (158,668
    )
    
    
    6,854
    
    
    
    3,379
    
    
    
    18,150Other income (expense):Interest expense
    
    
    (4,108
    )
    
    
    (16,407
    )
    
    
    (19,326
    )
    
    
    (10,481
    )
    
    
    (16,005
    )Other income (expense), net
    
    
    24
    
    
    
    2,014
    
    
    
    1,670
    
    
    
    (1,136
    )
    
    
    642Total other expense, net
    
    
    (4,084
    )
    
    
    (14,393
    )
    
    
    (17,656
    )
    
    
    (11,617
    )
    
    
    (15,363
    )(Loss) income before income tax provision
    
    
    (4,103
    )
    
    
    (173,061
    )
    
    
    (10,802
    )
    
    
    (8,238
    )
    
    
    2,787Income tax provision (benefit)
    
    
    
    
    
    
    52
    
    
    
    12,744
    
    
    
    (3,191
    )
    
    
    1,307Net (loss) income before redeemable
preferred stock accretion
    
    
    (4,103
    )
    
    
    (173,113
    )
    
    
    (23,546
    )
    
    
    (5,047
    )
    
    
    1,480Redeemable preferred stock accretion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,126
    )Net loss attributable to common stockholders
    
    $
    (4,103
    )
    
    $
    (173,113
    )
    
    $
    (23,546
    )
    
    $
    (5,047
    )
    
    $
    (8,646
    )
 See notes to consolidated financial statements.
  18




---



##### 



Real Mex Restaurants, Inc.
 Consolidated Statements of Stockholders Equity
(In Thousands, Except For Share Data)
  PredecessorSeries A
    
    
    Series B
    
    
    Series CRedeemable
    
    
    Redeemable
    
    
    Redeemable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AdditionalPreferred
    
    
    Preferred
    
    
    Preferred
    
    
    Common Stock
    
    
    
    
    
    
    Paid-in
    
    
    AccumulatedStock
    
    
    Stock
    
    
    Stock
    
    
    Shares
    
    
    Amount
    
    
    Warrants
    
    
    Capital
    
    
    Deficit
    
    
    TotalBalance at December 25, 2005
    
    $
    35,646
    
    
    $
    25,365
    
    
    $
    58,080
    
    
    
    316,290
    
    
    $
    
    
    
    $
    4,027
    
    
    $
    16,203
    
    
    $
    (88,737
    )
    
    $
    50,584Issuance of Series A
Redeemable Preferred
Stock
    
    
    1,897
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,897Issuance of Series B
Redeemable Preferred
Stock
    
    
    
    
    
    
    1,433
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,433Issuance of Series D
Redeemable Preferred
Stock
    
    
    
    
    
    
    
    
    
    
    2,352
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,352Tax benefit from
employee stock option
exercise
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,800
    
    
    
    
    
    
    
    1,800Accretion on redeemable
preferred stock
    
    
    2,861
    
    
    
    2,177
    
    
    
    5,089
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,127
    )
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,480
    
    
    
    1,480Balance at August 20, 2006
    
    
    40,404
    
    
    
    28,975
    
    
    
    65,521
    
    
    
    316,290
    
    
    
    
    
    
    
    4,027
    
    
    
    18,003
    
    
    
    (97,384
    )
    
    
    59,546Initial capitalization
of the Company, August
21, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    199,124
    
    
    
    
    
    
    
    199,124Dividend distribution to
parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,000
    )
    
    
    (10,000
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,047
    )
    
    
    (5,047
    )Balance at December 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    199,124
    
    
    
    (15,047
    )
    
    
    184,077Contribution from parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,743
    
    
    
    
    
    
    
    1,743Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    839
    
    
    
    
    
    
    
    839Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23,546
    )
    
    
    (23,546
    )Balance at December 30, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    201,706
    
    
    
    (38,593
    )
    
    
    163,113Contribution from parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,554
    
    
    
    
    
    
    
    5,554Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    406
    
    
    
    
    
    
    
    406Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (173,113
    )
    
    
    (173,113
    )Balance at November 13, 2008
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    1,000
    
    
    $
    
    
    
    $
    
    
    
    $
    207,666
    
    
    $
    (211,706
    )
    
    $
    (4,040
    )SuccessorSeries A
    
    
    Series B
    
    
    Series CRedeemable
    
    
    Redeemable
    
    
    Redeemable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AdditionalPreferred
    
    
    Preferred
    
    
    Preferred
    
    
    Common Stock
    
    
    
    
    
    
    Paid-in
    
    
    AccumulatedStock
    
    
    Stock
    
    
    Stock
    
    
    Shares
    
    
    Amount
    
    
    Warrants
    
    
    Capital
    
    
    Deficit
    
    
    TotalRecapitalization of the
Company, November 14, 2008
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    1,000
    
    
    $
    
    
    
    $
    
    
    
    $
    27,175
    
    
    $
    
    
    
    $
    27,175Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28
    )
    
    
    
    
    
    
    (28
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,103
    )
    
    
    (4,103
    )Balance at December 28, 2008
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    1,000
    
    
    $
    
    
    
    $
    
    
    
    $
    27,147
    
    
    $
    (4,103
    )
    
    $
    23,044
 See notes to consolidated financial statements.
  19




---



##### 



Real Mex Restaurants, Inc.
 Consolidated Statements of Cash Flows
 (In Thousands)
  Successor
    
    
    PredecessorNovember 14,
    
    
    December 31,
    
    
    
    
    
    
    August 21,
    
    
    December 26,2008
    
    
    2007
    
    
    Fiscal Year
    
    
    2006
    
    
    2005to
    
    
    to
    
    
    Ended
    
    
    to
    
    
    toDecember 28,
    
    
    November 13,
    
    
    December 30,
    
    
    December 31,
    
    
    August 20,2008
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2006Operating activitiesNet (loss) income
    
    $
    (4,103
    )
    
    $
    (173,113
    )
    
    $
    (23,546
    )
    
    $
    (5,047
    )
    
    $
    1,480Adjustments to reconcile net (loss) income to
net cash provided by (used in) operating
activities:Depreciation
    
    
    3,334
    
    
    
    19,780
    
    
    
    22,254
    
    
    
    8,505
    
    
    
    12,230Amortization of:Favorable lease asset and unfavorable
lease liability, net
    
    
    416
    
    
    
    1,944
    
    
    
    1,707
    
    
    
    1,818
    
    
    
    Deferred financing costs
    
    
    169
    
    
    
    1,571
    
    
    
    1,828
    
    
    
    2,286
    
    
    
    1,179Debt discount/(premium)
    
    
    1,535
    
    
    
    (1,050
    )
    
    
    (1,563
    )
    
    
    
    
    
    
    Impairment of goodwill and intangible assets
    
    
    
    
    
    
    163,196
    
    
    
    10,000
    
    
    
    
    
    
    
    (Gain) loss on disposal of property and
equipment
    
    
    
    
    
    
    (402
    )
    
    
    (877
    )
    
    
    706
    
    
    
    (19
    )Gain on lease termination
    
    
    
    
    
    
    (600
    )
    
    
    
    
    
    
    
    
    
    
    Impairment of property and equipment
    
    
    
    
    
    
    5,151
    
    
    
    1,362
    
    
    
    
    
    
    
    1,197Stock-based compensation expense
    
    
    (28
    )
    
    
    406
    
    
    
    839
    
    
    
    
    
    
    
    1,800Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    12,731
    
    
    
    (3,218
    )
    
    
    (1,108
    )Other
    
    
    
    
    
    
    
    
    
    
    231
    
    
    
    
    
    
    
    Changes in operating assets and liabilities:Trade and other receivables
    
    
    2,125
    
    
    
    654
    
    
    
    (2,578
    )
    
    
    1,449
    
    
    
    (1,071
    )Inventories
    
    
    (625
    )
    
    
    (889
    )
    
    
    (1,484
    )
    
    
    (553
    )
    
    
    (35
    )Deferred compensation plan assets
    
    
    (51
    )
    
    
    1,347
    
    
    
    (745
    )
    
    
    (755
    )
    
    
    (573
    )Prepaid expenses and other current
assets
    
    
    (3,358
    )
    
    
    3,291
    
    
    
    544
    
    
    
    (3,310
    )
    
    
    (952
    )Related party receivable/payable
    
    
    
    
    
    
    (66
    )
    
    
    6,096
    
    
    
    (3,591
    )
    
    
    Deferred charges, net
    
    
    
    
    
    
    35
    
    
    
    (148
    )
    
    
    (80
    )
    
    
    (301
    )Other assets
    
    
    6
    
    
    
    66
    
    
    
    73
    
    
    
    (107
    )
    
    
    912Accounts payable and accrued liabilities
    
    
    7,342
    
    
    
    (7,551
    )
    
    
    (6,519
    )
    
    
    (2,151
    )
    
    
    14,235Other liabilities
    
    
    424
    
    
    
    3,959
    
    
    
    5,225
    
    
    
    629
    
    
    
    1,484Net cash provided by (used in) operating
activities
    
    
    7,186
    
    
    
    17,729
    
    
    
    25,430
    
    
    
    (3,419
    )
    
    
    30,458Investing activitiesPurchases of property and equipment
    
    
    (736
    )
    
    
    (23,332
    )
    
    
    (34,404
    )
    
    
    (10,495
    )
    
    
    (15,885
    )Exchange transaction costs
    
    
    (20
    )
    
    
    (1,153
    )
    
    
    
    
    
    
    
    
    
    
    Sale of Fuzio trademark
    
    
    
    
    
    
    
    
    
    
    1,200
    
    
    
    
    
    
    
    Proceeds from lease termination
    
    
    
    
    
    
    600
    
    
    
    
    
    
    
    
    
    
    
    Net proceeds from disposal of property and
equipment
    
    
    
    
    
    
    302
    
    
    
    4,789
    
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    (756
    )
    
    
    (23,583
    )
    
    
    (28,415
    )
    
    
    (10,495
    )
    
    
    (15,885
    )Financing activitiesNet (payment) borrowing under revolving credit
facility
    
    
    (5,900
    )
    
    
    2,500
    
    
    
    3,050
    
    
    
    7,950
    
    
    
    Borrowings under long-term debt agreements
    
    
    466
    
    
    
    1,375
    
    
    
    981
    
    
    
    437
    
    
    
    Payments on long-term debt agreements and
capital lease obligations
    
    
    (314
    )
    
    
    (1,449
    )
    
    
    (577
    )
    
    
    (10,148
    )
    
    
    (174
    )Payment of financing costs
    
    
    
    
    
    
    (500
    )
    
    
    (856
    )
    
    
    (885
    )
    
    
    Dividend paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,000
    )
    
    
    Capital contributions
    
    
    
    
    
    
    3,022
    
    
    
    
    
    
    
    
    
    
    
    Net cash (used in) provided by financing
activities
    
    
    (5,748
    )
    
    
    4,948
    
    
    
    2,598
    
    
    
    (12,646
    )
    
    
    (174
    )Net increase (decrease) in cash and cash
equivalents
    
    
    682
    
    
    
    (906
    )
    
    
    (387
    )
    
    
    (26,560
    )
    
    
    14,399Cash and cash equivalents at beginning of
period
    
    
    1,417
    
    
    
    2,323
    
    
    
    2,710
    
    
    
    29,270
    
    
    
    14,871Cash and cash equivalents at end of period
    
    $
    2,099
    
    
    $
    1,417
    
    
    $
    2,323
    
    
    $
    2,710
    
    
    $
    29,270Supplemental disclosure of cash flow
informationInterest paid
    
    $
    873
    
    
    $
    16,910
    
    
    $
    19,722
    
    
    $
    11,225
    
    
    $
    11,405Income taxes paid
    
    $
    
    
    
    $
    52
    
    
    $
    38
    
    
    $
    17
    
    
    $
    44Supplemental disclosure of noncash investing
and financing activitiesPreferred
and common stock issued as consideration for the Chevys Acquisition
    
     $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5,682
 See notes to consolidated financial statements.
  20




---



##### 



Real Mex Restaurants, Inc.
 
 Notes to Consolidated Financial Statements
 December 28, 2008
(In Thousands, Except For Share Data)
 1. Description of Business
 ® ® ®
 Basis of Presentation
   Liquidity
   2. Acquisitions
 Exchange Agreement
   21




---



##### 



Cash and cash equivalents
    
    $
    1,417Trade and other accounts receivable
    
    
    12,100Inventories
    
    
    12,938Other current assets
    
    
    5,692Property and equipment
    
    
    113,154Other assets
    
    
    41,841Trademark and other intangibles
    
    
    68,900Goodwill
    
    
    43,178Total assets acquired
    
    
    299,220Accounts payable and accrued liabilities
    
    
    60,616Long-term debt
    
    
    166,026Deferred tax liability
    
    
    31,549Other liabilities
    
    
    13,854Total liabilities assumed
    
    
    272,045Net assets acquired
    
    $
    27,175
  Merger Agreement
   22




---



##### 



3. Summary of Accounting Policies
 Principles of Consolidation
  Use of Estimates
  Cash and Cash Equivalents
  Receivables
  Inventories
  Supplies and Expendable Equipment
  Pre-Opening Costs
  Property and Equipment
  Impairment of Long-Lived Assets
   23




---



##### 



Impairment of Goodwill and Intangible Assets
    Intangible Assets
  Successor
    
    
    PredecessorDecember 28,
    
    
    December 30,2008
    
    
    2007Trademarks
    
    $
    55,900
    
    
    $
    101,500Franchise agreements
    
    
    13,000
    
    
    
    11,500$
    68,900
    
    
    $
    113,000
  24




---



##### 



Deferred Charges
  2009
    
    
    2010Financing and lease acquisition costs
    
    $
    1,074
    
    
    $
    330
 Favorable Lease Asset and Unfavorable Lease Liability
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    ThereafterFavorable lease asset
    
    $
    5,902
    
    
    $
    5,511
    
    
    $
    4,855
    
    
    $
    4,404
    
    
    $
    3,710
    
    
    $
    6,902Unfavorable lease liability
    
    
    (2,286
    )
    
    
    (2,017
    )
    
    
    (1,532
    )
    
    
    (1,380
    )
    
    
    (833
    )
    
    
    (2,683
    )Net amortization expense
    
    $
    3,616
    
    
    $
    3,494
    
    
    $
    3,323
    
    
    $
    3,024
    
    
    $
    2,877
    
    
    $
    4,219
 Liquor Licenses
  Income Taxes
    Revenue Recognition
  Self Insurance
   25




---



##### 



Gift Certificates and Gift Cards
  Segment Information
  Promotion and Advertising Expense
  Operating Leases
  Concentration of Credit Risk
  Fair Value of Financial Instruments
  Recent Accounting Pronouncements
   26




---



##### 



4. Property and Equipment
  Successor
    
    
    PredecessorDecember 28,
    
    
    December 30,2008
    
    
    2007Land and land improvements
    
    $
    1,530
    
    
    $
    2,079Buildings and improvements
    
    
    939
    
    
    
    1,201Furniture, fixtures and equipment
    
    
    43,789
    
    
    
    51,240Leasehold improvements and leasehold rights
    
    
    79,193
    
    
    
    73,207Property and equipment, total
    
    
    125,451
    
    
    
    127,727Less accumulated depreciation and amortization
    
    
    (14,946
    )
    
    
    (31,548
    )Property and equipment, net
    
    $
    110,505
    
    
    $
    96,179
 5. Accounts Payable and Other Accrued Liabilities
  Successor
    
    
    PredecessorDecember 28,
    
    
    December 30,2008
    
    
    2007Trade accounts payable
    
    $
    20,329
    
    
    $
    19,445Gift cards and gift certificates
    
    
    2,869
    
    
    
    3,247$
    23,198
    
    
    $
    22,692
  Successor
    
    
    PredecessorDecember 28,
    
    
    December 30,2008
    
    
    2007Rent and occupancy expenses
    
    $
    1,500
    
    
    $
    1,345Sales taxes
    
    
    3,960
    
    
    
    4,378Accrued interest
    
    
    3,444
    
    
    
    2,937Other
    
    
    6,522
    
    
    
    5,354$
    15,426
    
    
    $
    14,014
  27




---



##### 



6. Long-Term Debt
  Successor
    
    
    PredecessorDecember 28,
    
    
    December 30,2008
    
    
    2007Senior Secured Notes due 2010
    
    $
    105,000
    
    
    $
    105,000Senior Secured Notes unamortized debt (discount)/premium
    
    
    (18,415
    )
    
    
    2,637Senior Secured Revolving Credit Facility
    
    
    7,600
    
    
    
    11,000Senior Unsecured Credit Facility  Related Party
    
    
    65,000
    
    
    
    65,000Mortgage
    
    
    591
    
    
    
    656Other
    
    
    642
    
    
    
    343160,418
    
    
    
    184,636Less current portion
    
    
    (8,313
    )
    
    
    (12,579
    )$
    152,105
    
    
    $
    172,057
 Senior Secured Notes due 2010
   Senior Secured Revolving Credit Facilities
   28




---



##### 



Senior Unsecured Credit Facility
   29




---



##### 



Mortgage.
  Successor
    
    PredecessorDecember 28,
    
    December 30,2008
    
    2007Senior Secured Notes due 2010
    
    10.25%
    
    10.00%Senior Secured Revolving Credit Facilities
    
    7.11 to 7.94%
    
    7.02 to 8.00%Senior Unsecured Credit Facility
    
    12.50%
    
    9.83%Mortgage
    
    9.28%
    
    9.28%Other
    
    3.98 to 4.70%
    
    6.45 to 7.75%
  UnamortizedDebtPrincipal
    
    
    Discount
    
    
    Total2009
    
    $
    8,313
    
    
    $
    (14,732
    )
    
    $
    (6,419
    )2010
    
    
    170,079
    
    
    
    (3,683
    )
    
    
    166,3962011
    
    
    87
    
    
    
    
    
    
    
    872012
    
    
    95
    
    
    
    
    
    
    
    952013
    
    
    104
    
    
    
    
    
    
    
    104Thereafter
    
    
    155
    
    
    
    
    
    
    
    155$
    178,833
    
    
    $
    (18,415
    )
    
    $
    160,418
 7. Capitalization
 Common Stock-Successor
  Redeemable Preferred Stock-Predecessor
    30




---



##### 



Stock Option Plans
      Successor
    
    
    Predecessor2008
    
    
    2007Weighted average fair value of grants
    
    $
    3,942.64
    
    
    $
    3,942.64Risk-free interest rate
    
    
    4.52
    %
    
    
    4.52
    %Expected volatility
    
    
    42.28
    %
    
    
    42.28
    %Expected life in years
    
    
    7.67
    
    
    
    6.15
  31




---



##### 



WeightedAverageShares
    
    
    Exercise PriceOutstanding at December 31, 2006  Predecessor
    
    
    
    
    
    
    Granted
    
    
    808
    
    
    $
    8,150Exercised
    
    
    
    
    
    
    Forfeited/expired
    
    
    (9
    )
    
    
    8,150Outstanding at December 30, 2007  Predecessor
    
    
    799
    
    
    $
    8,150Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited/expired
    
    
    (169
    )
    
    
    8,150Outstanding at November 13, 2008  Predecessor
    
    
    630
    
    
    $
    8,150Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited/expired
    
    
    (300
    )
    
    
    8,150Outstanding at December 28, 2008  Successor
    
    
    330
    
    
    $
    8,150Vested and expected to vest at December 28, 2008
    
    
    314
    
    
    $
    8,150Exercisable at December 28, 2008
    
    
    129
    
    
    $
    8,150
   8. Income Taxes
  Successor
    
    
    PredecessorDecember 28,
    
    
    November 13,
    
    
    December 30,
    
    
    December 31,
    
    
    August 20,2008
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2006Current:Federal
    
    $
    
    
    
    $
    28
    
    
    $
    
    
    
    $
    
    
    
    $
    1,570State
    
    
    
    
    
    
    24
    
    
    
    58
    
    
    
    61
    
    
    
    344
    
    
    
    52
    
    
    
    58
    
    
    
    61
    
    
    
    1,914Deferred:Federal
    
    
    
    
    
    
    
    
    
    
    (467
    )
    
    
    (2,729
    )
    
    
    (367
    )State
    
    
    
    
    
    
    
    
    
    
    (129
    )
    
    
    (523
    )
    
    
    (240
    )
    
    
    
    
    
    
    
    (596
    )
    
    
    (3,252
    )
    
    
    (607
    )
    
    
    
    
    
    
    
    (538
    )
    
    
    (3,191
    )
    
    
    1,307
    )Change in valuation allowance
    
    
    
    
    
    
    
    
    
    
    13,282
    
    
    
    
    
    
    
    $
    
    
    
    $
    52
    
    
    $
    12,744
    
    
    $
    (3,191
    )
    
    $
    1,307
  32




---



##### 



Successor
    
    
    PredecessorDecember 28,
    
    
    December 30,2008
    
    
    2007Deferred tax assets:Federal net operating loss carry-forwards
    
    $
    
    
    
    $
    9,481State net operating loss carry-forwards
    
    
    
    
    
    
    1,805Goodwill and other intangibles
    
    
    24,808
    
    
    
    4,398Accrued expenses not currently deductible
    
    
    6,470
    
    
    
    3,394Tax credit carry-forwards
    
    
    
    
    
    
    592Property and equipment basis difference
    
    
    7,144
    
    
    
    17,455Deferred rent
    
    
    72
    
    
    
    1,006Gift certificates and other deferred income
    
    
    537
    
    
    
    692Unamortized debt premium
    
    
    
    
    
    
    1,729Deferred compensation
    
    
    1,262
    
    
    
    1,640State taxes
    
    
    1,872
    
    
    
    Other
    
    
    5,204
    
    
    
    784Total deferred tax assets
    
    
    47,369
    
    
    
    42,976Deferred tax liabilities:Prepaid expenses
    
    
    (397
    )
    
    
    (504
    )Trademarks and other indefinite lived intangibles
    
    
    (31,549
    )
    
    
    (17,170
    )Lease amortization
    
    
    (12,732
    )
    
    
    (10,279
    )State taxes
    
    
    
    
    
    
    (631
    )Unamortized landlord allowance
    
    
    (3,097
    )
    
    
    (1,110
    )Unamortized debt discount
    
    
    (8,019
    )
    
    
    Total deferred tax liabilities
    
    
    (55,794
    )
    
    
    (29,694
    )Valuation allowance
    
    
    (23,124
    )
    
    
    (13,282
    )Net deferred tax liability
    
    $
    (31,549
    )
    
    $
    
   Successor
    
    
    PredecessorDecember 28,
    
    
    December 30,
    
    
    December 31,
    
    
    August 20,2008
    
    
    2007
    
    
    2006
    
    
    2006Income tax at U.S. federal statutory tax rate
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.0
    %State income tax, net of federal benefit
    
    
    0.0
    
    
    
    4.7
    
    
    
    5.8
    
    
    
    5.7Valuation allowance
    
    
    (13.0
    )
    
    
    (123.0
    )
    
    
    
    
    
    
    Non-deductible transaction costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.2Impairment
of goodwill and intangibles
    
    
    (92.1
    )
    
    
    
    
    
    
    
    
    
    
    Purchase accounting adjustment
    
    
    71.2
    
    
    
    
    
    
    
    
    
    
    
    Permanent true-ups
    
    
    
    
    
    
    (33.3
    )
    
    
    
    
    
    
    Other
    
    
    (0.1
    )
    
    
    (0.4
    )
    
    
    (1.1
    )
    
    
    (4.0
    )Effective tax rate
    
    
    (0.0
    )%
    
    
    (118.0
    )%
    
    
    38.7
    %
    
    
    46.9
    %
     33




---



##### 



9. Fair Value Measurement
   Level 1:
    
    Quoted prices are available in active markets for identical
assets or liabilities as of the reporting date. Active markets
are those in which transactions for the asset or liability occur
in sufficient frequency and volume to provide pricing information
on an ongoing basis. Level 1 primarily consists of financial
instruments such as exchange-traded derivatives, listed equities
and U.S. government treasury securities.Level 2:
    
    Pricing inputs are other than quoted prices in active markets
included in Level 1, which are either directly or indirectly
observable as of the reporting date. Level 2 includes those
financial instruments that are valued using models or other
valuation methodologies. These models are primarily
industry-standard models that consider various assumptions,
including quoted forward prices for commodities, time value,
volatility factors, and current market and contractual prices for
the underlying instruments, as well as other relevant economic
measures. Substantially all of these assumptions are observable
in the marketplace throughout the full term of the instrument,
can be derived from observable data or are supported by
observable levels at which transactions are executed in the
marketplace. Instruments in this category include
non-exchange-traded derivatives such as over the counter
forwards, options and repurchase agreements.Level 3:
    
    Pricing inputs include significant inputs that are generally less
observable from objective sources. These inputs may be used with
internally developed methodologies that result in managements
best estimate of fair value. At each balance sheet date, we
perform an analysis of all instruments subject to SFAS 157
and include in Level 3 all of those whose fair value is based on
significant unobservable inputs.
  Level 1: Quoted Prices in Active Markets
   34




---



##### 



Level 2: Significant Other Observable Inputs
    Level 3: Significant Unobservable Inputs
  10. Commitments and Contingencies
 Leases
    Capital
    
    
    Minimum
    
    
    
    
    
    
    NetLease
    
    
    Lease
    
    
    Sublease
    
    
    LeaseObligations
    
    
    Commitments
    
    
    Income
    
    
    Commitments2009
    
    $
    565
    
    
    $
    41,389
    
    
    $
    (678
    )
    
    $
    41,2762010
    
    
    433
    
    
    
    36,742
    
    
    
    (505
    )
    
    
    36,6702011
    
    
    269
    
    
    
    32,234
    
    
    
    (420
    )
    
    
    32,0832012
    
    
    194
    
    
    
    28,561
    
    
    
    (345
    )
    
    
    28,4102013
    
    
    29
    
    
    
    23,740
    
    
    
    (240
    )
    
    
    23,529Thereafter
    
    
    304
    
    
    
    89,004
    
    
    
    (559
    )
    
    
    88,749Total minimum lease payments
    
    
    1,794
    
    
    $
    251,670
    
    
    $
    (2,747
    )
    
    $
    250,717Less: Amount representing interest
    
    
    (399
    )Present value of net minimum capital lease payments
    
    
    1,395Less: Current maturities of capital lease obligations
    
    
    (453
    )Long-term capital lease obligations
    
    $
    942
   Successor
    
    
    PredecessorDecember 28,
    
    
    November 13,
    
    
    December 30,
    
    
    December 31,
    
    
    August 20,2008
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2006Rental expense
    
    $
    4,997
    
    
    $
    41,935
    
    
    $
    45,369
    
    
    $
    14,893
    
    
    $
    30,003Percentage rent expense above minimum rent
(included in rental expense)
    
    
    198
    
    
    
    1,926
    
    
    
    2,164
    
    
    
    907
    
    
    
    1,755Net sublease income
    
    
    45
    
    
    
    344
    
    
    
    227
    
    
    
    122
    
    
    
    289
  35




---



##### 



Purchase Obligations
  Litigation
  Self-Insurance
   11. Related Party Transactions
 Successor Transactions
     36




---



##### 



Predecessor Transactions
 Net Income
   12. Employee Benefit Plan
  13. Other Events
    37




---



##### 



14. Condensed Consolidating Financial Statements
  15. Quarterly Results of Operations (Unaudited)
  Predecessor
    
    
    SuccessorPredecessor
    
    
    Predecessor
    
    
    Predecessor
    
    
    Period from
    
    
    Period from13 weeks ended
    
    
    13 weeks ended
    
    
    13 weeks ended
    
    
    September 29, 2008
    
    
    November 14, 2008March 30,
    
    
    June 29,
    
    
    September 28,
    
    
    to
    
    
    to2008
    
    
    2008
    
    
    2008
    
    
    November 13, 2008
    
    
    December 28, 2008Total revenues
    
    $
    137,577
    
    
    $
    152,528
    
    
    $
    137,461
    
    
    $
    68,863
    
    
    $
    57,316Operating income (loss)
    
    $
    2,242
    
    
    $
    (27,728
    )
    
    $
    1,931
    
    
    $
    (135,113
    )
    
    $
    (20
    )Net loss
    
    $
    (2,204
    )
    
    $
    (31,839
    )(1)
    
    $
    (1,080
    )
    
    $
    (137,990
    )(2)
    
    $
    (4,103
    )
 Predecessor13 weeks ended
    
    
    13 weeks ended
    
    
    13 weeks ended
    
    
    13 weeks endedApril 1,
 2007
    
    
    July 1,
 2007
    
    
    September 30, 
2007
    
    
    December 30,
 2007Total revenues
    
    $
    138,511
    
    
    $
    149,575
    
    
    $
    142,510
    
    
    $
    134,595Operating income (loss)
    
    $
    5,593
    
    
    $
    7,813
    
    
    $
    4,070
    
    
    $
    (10,622
    )Net income (loss)
    
    $
    380
    
    
    $
    2,973
    
    
    $
    (591
    )
    
    $
    (26,679
    )(3)
 
 (1)
    
    Includes goodwill impairment of $34,000.(2)
    
    Includes goodwill impairment of $129,196.(3)
    
    Includes goodwill impairment charge of $10,000 and a deferred tax valuation allowance of
$13,300.  38




---



##### 



REAL MEX RESTAURANTS, INC.By:
    
    /s/ Steven TannerSteven TannerDate:
April 2, 2009
    
    
    
    Interim Chief Executive Officer
  39




---



##### 



EXHIBITNO.
    
    DESCRIPTION31.1
    
    
    Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 of
the Chief Executive and Chief Financial Officer. (Filed herewith)32.1
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, of the Chief Executive and Chief Financial Officer. (Filed herewith)