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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended April 1, 2002

|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 1-9684

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CHART HOUSE ENTERPRISES, INC.(Exact name of registrant as specified in its charter)Delaware(State or other jurisdiction of
Incorporation or organization)
33-0147725(I.R.S. Employer
Identification No.)640 North LaSalle, Suite 295, Chicago, Illinois, 60610(Address of principal executive offices, including zip code)(312) 266-1100(registrant's telephone number, including area code)


Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes        x              
  No

Indicate
the number of shares outstanding of each of the issuer's classes of common stock, as of May 14, 2002:

Common
Stock ($.01 par value) 1,978,385

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PART IFINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

CHART HOUSE ENTERPRISES, INC. AND SUBSIDIARIES        CONSOLIDATED BALANCE SHEETS        (In thousands)

|                                                |                                           | April 1, 2002 |         | December 31, 2001
|----------------------------------------------- | ----------------------------------------- | ------------- | ------- | -----------------
|
|ASSETS                                          |                                           |               |         |                  
|Current assets:                                 |                                           |               |         |                  
|                                                | Cash                                      |               | $       | 217              
|                                                | Accounts receivable, net                  |               |         | 2,305            
|                                                | Inventories                               |               |         | 2,265            
|                                                | Prepaid expenses and other current assets |               |         | 825              
|                                                |                                           |               |         |                  
|Total current assets                            |                                           |               | 5,612   |                  
|                                                |                                           |               |         |                  
|Equipment and improvements:                     |                                           |               |         |                  
|                                                | Equipment                                 |               |         | 36,822           
|                                                | Leasehold interests & improvements        |               |         | 74,109           
|                                                |                                           |               |         |                  
|                                                |                                           |               | 110,931 |                  
|Less: Accumulated depreciation and amortization |                                           |               | 44,955  |                  
|                                                |                                           |               |         |                  
|Equipment and improvements, net                 |                                           |               | 65,976  |                  
|                                                |                                           |               |         |                  
|Leased property under capital leases, net       |                                           |               | 1,729   |                  
|                                                |                                           |               |         |                  
|Intangible assets, net                          |                                           |               | 13,902  |                  
|Other assets                                    |                                           |               | 797     |                  
|                                                |                                           |               |         |                  
|Total other assets, net                         |                                           |               | 14,699  |                  
|                                                |                                           |               |         |                  
|Total assets                                    |                                           | $             | 88,016  |                  
|                                                |                                           |               |         |                  

The
accompanying notes are an integral part of these consolidated balance sheets.

1

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CHART HOUSE ENTERPRISES, INC. AND SUBSIDIARIES        CONSOLIDATED BALANCE SHEETS        (In thousands, except share data)

|                                                                                                                                                                           |                                            | April 1, 2002 |         | December 31, 2001 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------- | ------- | ----------------- | -
|
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                       |                                            |               |         |                   |  
|Current liabilities:                                                                                                                                                       |                                            |               |         |                   |  
|                                                                                                                                                                           | Current portion of long-term obligations   |               | $       | 25,190            |  
|                                                                                                                                                                           | Accounts payable                           |               |         | 9,326             |  
|                                                                                                                                                                           | Accrued liabilities                        |               |         | 12,508            |  
|                                                                                                                                                                           |                                            |               |         |                   |  
|Total current liabilities                                                                                                                                                  |                                            |               | 47,024  |                   |  
|                                                                                                                                                                           |                                            |               |         |                   |  
|Non-current liabilities (excluding current portion):                                                                                                                       |                                            |               |         |                   |  
|                                                                                                                                                                           | Long-term debt to related parties          |               |         | 5,892             |  
|                                                                                                                                                                           | Long-term obligations under capital leases |               |         | 2,772             |  
|                                                                                                                                                                           |                                            |               |         |                   |  
|Total non-current liabilities (excluding current portion)                                                                                                                  |                                            |               | 8,664   |                   |  
|                                                                                                                                                                           |                                            |               |         |                   |  
|Stockholders' equity:                                                                                                                                                      |                                            |               |         |                   |  
|Preferred stock, $1.00 par value, 10,000,000 shares authorized; 4,068,992 and 3,970,550 shares issued and outstanding at April 1, 2002 and December 31, 2001, respectively |                                            |               | 4,069   |                   |  
|Common Stock, $0.01 par value, 30,000,000 shares authorized; 1,978,353 and 1,975,766 shares issued and outstanding at April 1, 2002 and December 31, 2001, respectively    |                                            |               | 20      |                   |  
|Additional paid-in capital                                                                                                                                                 |                                            |               | 65,282  |                   |  
|Retained deficit                                                                                                                                                           |                                            |               | (37,043 | )                 |  
|                                                                                                                                                                           |                                            |               |         |                   |  
|Total stockholders' equity                                                                                                                                                 |                                            |               | 32,328  |                   |  
|                                                                                                                                                                           |                                            |               |         |                   |  
|Total liabilities and stockholders' equity                                                                                                                                 |                                            | $             | 88,016  |                   | $
|                                                                                                                                                                           |                                            |               |         |                   |  

The
accompanying notes are an integral part of these consolidated balance sheets.

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CHART HOUSE ENTERPRISES, INC. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF OPERATIONS        (In thousands, except per share data)        (Unaudited)

|                                              |                                              | Thirteen weeks
ended
April 1, 2002   |        | Thirteen weeks
ended
March 26, 2001 |       
|--------------------------------------------- | -------------------------------------------- | ------------------------------------ | ------ | ----------------------------------- | ------
|Revenues                                      |                                              | $                                    | 35,192 |                                     | $     
|                                              |                                              |                                      |        |                                     |       
|Operating costs and expenses:                 |                                              |                                      |        |                                     |       
|                                              | Cost of sales                                |                                      |        | 11,078                              |       
|                                              | Restaurant labor                             |                                      |        | 9,756                               |       
|                                              | Other operating costs                        |                                      |        | 7,879                               |       
|                                              | Rent                                         |                                      |        | 2,280                               |       
|                                              |                                              |                                      |        |                                     |       
|                                              |                                              | Total restaurant costs               |        |                                     | 30,993
|                                              | Selling, general and administrative expenses |                                      |        | 2,576                               |       
|                                              | Depreciation and amortization                |                                      |        | 1,696                               |       
|                                              | Pre-opening costs                            |                                      |        |                                    |       
|                                              | Loss on disposal of assets                   |                                      |        | 2                                   |       
|                                              |                                              |                                      |        |                                     |       
|                                              |                                              | Total restaurant and operating costs |        |                                     | 35,267
|                                              |                                              |                                      |        |                                     |       
|Loss from operations                          |                                              |                                      | (75    | )                                   |       
|                                              | Interest expense, net                        |                                      |        | 886                                 |       
|                                              | Other income                                 |                                      |        |                                    |       
|                                              |                                              |                                      |        |                                     |       
|Loss before income taxes                      |                                              |                                      | (961   | )                                   |       
|Provision for income taxes                    |                                              |                                      |       |                                     |       
|                                              |                                              |                                      |        |                                     |       
|Net loss                                      |                                              | $                                    | (961   | )                                   | $     
|Preferred stock dividends                     |                                              |                                      | 222    |                                     |       
|                                              |                                              |                                      |        |                                     |       
|Net loss available to common shares           |                                              | $                                    | (1,183 | )                                   | $     
|                                              |                                              |                                      |        |                                     |       
|Net loss per common share  Basic and diluted |                                              | $                                    | (0.60  | )                                   | $     
|                                              |                                              |                                      |        |                                     |       
|Weighted-average shares outstanding           |                                              |                                      | 1,977  |                                     |       

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

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CHART HOUSE ENTERPRISES, INC. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF CASH FLOWS        (In thousands)        (Unaudited)

|                                                                                           |                                                                  | Thirteen weeks
ended
April 1, 2002 |      | Thirteen weeks
ended
March 26, 2001 |  
|------------------------------------------------------------------------------------------ | ---------------------------------------------------------------- | ---------------------------------- | ---- | ----------------------------------- | -
|Cash flows from operating activities:                                                      |                                                                  |                                    |      |                                     |  
|Net loss                                                                                   |                                                                  | $                                  | (961 | )                                   | $
|Adjustments to reconcile net loss to cash flow provided by (used in) operating activities: |                                                                  |                                    |      |                                     |  
|                                                                                           | Depreciation and amortization                                    |                                    |      | 1,696                               |  
|                                                                                           | Amortization of debt issuance costs                              |                                    |      | 3                                   |  
|                                                                                           | Common Stock issued in lieu of compensation                      |                                    |      | 35                                  |  
|                                                                                           | Loss on disposal of assets                                       |                                    |      | 2                                   |  
|                                                                                           | Decrease in accounts receivable                                  |                                    |      | 416                                 |  
|                                                                                           | Decrease (increase) in inventories                               |                                    |      | 100                                 |  
|                                                                                           | (Increase) decrease in prepaid expenses and other current assets |                                    |      | (178                                | )
|                                                                                           | Increase in other assets                                         |                                    |      | (88                                 | )
|                                                                                           | Decrease in accounts payable                                     |                                    |      | (528                                | )
|                                                                                           | Increase (decrease) in accrued liabilities                       |                                    |      | 176                                 |  
|                                                                                           |                                                                  |                                    |      |                                     |  
|Cash provided by (used in) operating activities                                            |                                                                  |                                    | 673  |                                     |  
|                                                                                           |                                                                  |                                    |      |                                     |  
|Cash flows from investing activities:                                                      |                                                                  |                                    |      |                                     |  
|                                                                                           | Expenditures for equipment and improvements                      |                                    |      | (332                                | )
|                                                                                           | Additions to other assets                                        |                                    |      |                                    |  
|                                                                                           |                                                                  |                                    |      |                                     |  
|Cash used in investing activities                                                          |                                                                  |                                    | (332 | )                                   |  
|                                                                                           |                                                                  |                                    |      |                                     |  
|Cash flows from financing activities:                                                      |                                                                  |                                    |      |                                     |  
|                                                                                           | Debt/equity issuance costs                                       |                                    |      |                                    |  
|                                                                                           | Principal payments on obligations under capital leases           |                                    |      | (60                                 | )
|                                                                                           | Payments under deferred acquisition agreement                    |                                    |      | (124                                | )
|                                                                                           | Net (payments) borrowings under revolving credit agreement       |                                    |      | (200                                | )
|                                                                                           | Payments of long-term debt                                       |                                    |      |                                    |  
|                                                                                           | Proceeds of long-term debt from related parties                  |                                    |      |                                    |  
|                                                                                           | Proceeds from issuance of common stock                           |                                    |      |                                    |  
|                                                                                           |                                                                  |                                    |      |                                     |  
|Cash (used in) provided by financing activities                                            |                                                                  |                                    | (384 | )                                   |  
|                                                                                           |                                                                  |                                    |      |                                     |  
|(Decrease) increase in cash                                                                |                                                                  |                                    | (43  | )                                   |  
|Cash, beginning of period                                                                  |                                                                  |                                    | 260  |                                     |  
|                                                                                           |                                                                  |                                    |      |                                     |  
|Cash, end of period                                                                        |                                                                  | $                                  | 217  |                                     | $
|                                                                                           |                                                                  |                                    |      |                                     |  

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

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CHART HOUSE ENTERPRISES, INC. AND SUBSIDIARIES        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        April 1, 2002        (Unaudited)

(1) GOING CONCERN

The consolidated financial statements of Chart House Enterprises, Inc. and its wholly-owned subsidiaries (the "Company") have been prepared on the basis of
the Company's continuing as a going concern. The Company has experienced net losses in the most recent fiscal quarter and each of the last three fiscal years ended December 31, 2001. These
results, in conjunction with an extensive restaurant renovation and expansion program, have severely strained the Company's capital resources. At April 1, 2002, the Company had
$25.0 million of senior, secured debt that, as a result of an amendment entered into on May 1, 2002, now matures on August 30, 2002. See Note 3. "Debt." The debt maturity
issue raises substantial doubt about the Company's ability to continue as a going concern. Since December 2001, the Company has been conducting a review of strategic alternatives with a
principal focus on identifying appropriate sources of capital to address the debt maturity matter. Recent discussions with interested parties have concentrated on a sale of the Company or a sale of a
significant portion of the Company's assets. Although no assurances can be given, management continues to believe that this process will be successful and that the modifications to the credit facility
provide sufficient time to consider the alternatives and execute an acceptable solution to the Company's capital structure.

In
the event the Company is not able to obtain sufficient capital by August 30, 2002 to retire the senior, secured debt, the lenders have the right to foreclose on their
collateral. Alternatives to foreclosure include, among others, extension of the maturity date or a filing for reorganization by the Company under the Federal Bankruptcy Code. While no assurances can
be given, management believes that the
Company will be able to continue to operate its restaurants and that the debt maturity matter will be satisfactorily resolved. The accompanying financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

(2) BASIS OF PRESENTATION

The accompanying consolidated financial statements of the Company for the quarterly periods ended April 1, 2002 and March 26, 2001 have been
prepared in accordance with generally accepted accounting principles, and with the instructions to Form 10-Q. These financial statements have not been audited by independent public
accountants, but include all adjustments (consisting of a normal and recurring nature) that are, in the opinion of management, necessary for a fair presentation of the financial condition, results of
operations, and cash flows for such periods. However, these results are not necessarily indicative of results for any other interim period or for the full fiscal year.

On
February 22, 2002, the Company effected a reserve stock split ("Reverse Stock Split") of its Common Stock, par value $0.01 per share ("Common Stock"), pursuant to which each
six shares of Common Stock issued and outstanding on such date were reclassified as and converted into one share of Common Stock immediately following the Reverse Stock Split. The Reverse Stock Split
has been reflected in the accompanying financial statements as if the reverse split had occurred at the beginning of fiscal 2001.

The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial

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statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Certain
information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to
requirements of the Securities and Exchange Commission. Management believes that the disclosures included in the accompanying interim financial statements and footnotes are adequate, but should be
read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2001.

Certain
items previously reported in specific financial statement captions have been reclassified to conform to the 2002 presentation.

(3) DEBT

The Company has a Revolving Credit and Term Loan Agreement ("Credit Agreement") with a group of three banks. At April 1, 2002, the Company had
$25.0 million outstanding under the Credit Agreement, which accrues interest at the prime interest rate, plus 2.75% (7.5% at April 1, 2002). The balance outstanding under the Credit
Agreement includes $1.5 million funded by EGI-Fund (01) Investors, L.L.C. ("EGI-Fund (01)"), a related party, which accrues interest at 16.32% due to the
subordinate nature of the related party's participation in the Credit Agreement. Cash paid for interest, net of amounts capitalized, was $34,000 and $0.9 million for the first quarters of 2002
and 2001, respectively. At April 1, 2002, the unused portion of the commitment was approximately $3.8 million, including $0.5 million from the related party.

During
2001, the Credit Agreement was amended to provide for, among other things, deferral of principal and interest payments and an acceleration of the maturity date to April 30,
2002. Accordingly, the total amount due under the Credit Agreement is reflected as a current liability in the accompanying financial statements. The Credit Agreement was further amended on
May 1, 2002, to provide for, among other things, an extension of the maturity date to August 30, 2002. Additionally, in connection with the most recent amendment, the Company paid
previously deferred interest totaling $1.0 million plus fees of $0.4 million. The Company is now obligated to make scheduled principal payments on the term loan portion of the Credit
Agreement of $0.4 million and $0.5 million on June 28, 2002 and July 31, 2002, respectively. In addition, a fee of $0.2 million will be payable if the Company's
obligations under the Credit Agreement have not been satisfied in full on or before August 1, 2002.

During
the period from November 2000 to January 2001, related parties made available to the Company an aggregate $11.0 million pursuant to unsecured notes. Amounts
outstanding under the notes were subordinated to amounts owing under the Credit Agreement. The proceeds were used to fund working capital requirements as well as scheduled principal payments on the
term loan. The terms of the notes were amended and restated in February 2001, increasing the availability of borrowing to $13.0 million. During June 2001, one note was repaid and
availability under the second note agreement was reduced to $5.0 million in conjunction with the Company raising equity financing through the issuance of Series A preferred stock. The
remaining note, owing to EGI-Fund (01), accrues interest at the applicable Eurodollar rate plus 16.0%, which was 17.87% at April 1, 2002, and matures on

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March 31, 2005. A fee of 12.0% per annum was charged on the unused portion of the availability of the borrowings under the note through June 2001. Interest is payable at maturity or
when certain leverage ratios are attained. Management believes these ratios will not be attained for 2002.

(4) SALE OF GROUND LEASE

During the first quarter 2001, the Company sold the rights to a ground lease for one restaurant that had been closed for major remodeling. The Company received
proceeds of $0.9 million, which is recorded as "other income" in the accompanying Consolidated Statements of Operations.

(5) RELATED PARTY TRANSACTIONS

Payments to related parties totaled $0.1 million in the first quarter of 2002, primarily related to property leasing. There were no payments to related
parties during the first quarter of 2001.

The
Company is party to a marketing agreement with iDine Rewards Network, Inc. ("iDine"), a related party and owner of the iDine frequent diner program. In connection with the
advance sale of discounted food and beverage credits, the Company receives advertising in iDine publications and through the relationships iDine has established with major airlines to feature the
Company's restaurants as preferred dining choices. iDine provides web and print promotional services that are designed to create incentives for members to dine at the Company's restaurants, especially
during the Company's restaurants' non-peak days. The Company received from iDine $1.0 million during the first quarter 2002 related to this agreement. No amounts were received from
iDine during the first quarter of 2001. Pursuant to the agreement, the Company has paid $0.8 and $0.5 million to iDine towards its advances and for its marketing services during the first
quarters of 2002 and 2001, respectively. The current agreement provides for $2.0 million of additional advances subsequent to April 1, 2002.

Interest
accrued on related party notes totaled $0.3 million and $0.2 million during the first quarters of 2002 and 2001, respectively. See also Note 3. "Debt."

The
relationships stem from one or more Company stockholders and/or members of the Company's Board of Directors maintaining ownership interest in and influential management positions at
or within these organizations.

(6) SUBSEQUENT EVENTS

The Company amended its Credit Agreement on May 1, 2002. See Note 3. "Debt."

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This Quarterly Report on Form 10-Q contains forward-looking statements that have been made pursuant to provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements represent the Company's expectations or beliefs concerning future events, including any statements regarding: future sales and gross profit
percentages, the continuation of historical trends, the sufficiency of the Company's cash balances, and cash generated from operating, financing and/or investing activities for the Company's future
liquidity and capital resource needs. Without limiting the foregoing, the words "believes," "intends," "projects," "plans," "expects," "anticipates," and similar expressions are intended to identify
forward-looking statements. The Company cautions that these statements are qualified by important economic and competitive factors that could cause actual results to differ materially from those in
the forward-looking statements. These factors include, without limitation, risks of the restaurant industry, an industry with many well-established competitors with greater financial and
other resources than the Company, and the impact of changes in consumer trends, employee availability, and cost increases. In addition, the Company's ability to expand is dependent upon various
factors, such as the availability of attractive sites for new restaurants, the ability to negotiate suitable lease terms, the ability to generate or borrow funds to develop new restaurants, the
ability to obtain various government permits and licenses, and the recruitment and training of skilled management and restaurant employees. Accordingly, such forward-looking statements do not purport
to be predictions of future events or circumstances and may not be realized.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

RESULTS OF OPERATIONS

The following is a comparative analysis of the results of operations for the quarterly periods ended April 1, 2002 and March 26, 2001. The results
of operations for the first quarter of 2002 are not necessarily indicative of the results to be expected for any future periods, including the fiscal year ending December 30, 2002. At
April 1, 2002, the Company operated 38 Chart House restaurants, six Angelo and Maxie's Steakhouses, and one Peohe's restaurant. Of those restaurants, one restaurant has been designated for
closure in 2002. At March 26, 2001, the Company operated 40 Chart House restaurants, six Angelo and Maxie's Steakhouses, and one Peohe's restaurant.

8

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The
dollar amounts in the table below are in thousands.

|                                    |                                              | Thirteen weeks ended
April 1, 2002   |        | Thirteen weeks ended
March 26, 2001 |       
|----------------------------------- | -------------------------------------------- | ------------------------------------ | ------ | ----------------------------------- | ------
|
|
|Revenues                            |                                              | $                                    | 35,192 |                                     | 100.0 
|                                    |                                              |                                      |        |                                     |       
|Operating costs and expenses:       |                                              |                                      |        |                                     |       
|                                    | Cost of sales                                |                                      |        | 11,078                              |       
|                                    | Restaurant labor                             |                                      |        | 9,756                               |       
|                                    | Other operating costs                        |                                      |        | 7,879                               |       
|                                    | Rent                                         |                                      |        | 2,280                               |       
|                                    |                                              |                                      |        |                                     |       
|                                    |                                              | Total restaurant costs               |        |                                     | 30,993
|                                    |                                              |                                      |        |                                     |       
|Restaurant operating income         |                                              |                                      | 4,199  |                                     | 11.9  
|                                    |                                              |                                      |        |                                     |       
|                                    | Selling, general and administrative expenses |                                      |        | 2,576                               |       
|                                    | Depreciation and amortization                |                                      |        | 1,696                               |       
|                                    | Pre-opening costs                            |                                      |        |                                    |       
|                                    | Loss on disposal of assets                   |                                      |        | 2                                   |       
|                                    |                                              |                                      |        |                                     |       
|                                    |                                              | Total restaurant and operating costs |        |                                     | 35,267
|                                    |                                              |                                      |        |                                     |       
|Loss from operations                |                                              |                                      | (75    | )                                   | (0.2  
|                                    | Interest expense, net                        |                                      |        | 886                                 |       
|                                    | Other income                                 |                                      |        |                                    |       
|                                    |                                              |                                      |        |                                     |       
|Loss before income taxes            |                                              |                                      | (961   | )                                   | (2.7  
|Provision for income taxes          |                                              |                                      |       |                                     |      
|                                    |                                              |                                      |        |                                     |       
|Net loss                            |                                              | $                                    | (961   | )                                   | (2.7  
|Preferred stock dividends           |                                              |                                      | 222    |                                     | 0.7   
|                                    |                                              |                                      |        |                                     |       
|Net loss available to common shares |                                              | $                                    | (1,183 | )                                   | (3.4  
|                                    |                                              |                                      |        |                                     |       

Revenues
decreased $1.1 million, or 3.0%, to $35.2 million in the first quarter of 2002, compared to $36.3 million in the first quarter of 2001. The decrease in
revenues is primarily due to a 3.8% decrease in comparable restaurant revenues ($1.3 million) and a reduction in revenues from restaurants disposed during 2001 ($1.8 million). The
decrease in comparable restaurant revenues reflects the overall negative impact of the timing of the New Years Eve and Easter holidays relative to the Company's fiscal quarters. Specifically, the 2002
quarter included Easter but did not include New Years Eve while the inverse occurred in the first quarter of 2001. These decreases were offset by an increase in revenues resulting from the addition of
two new Angelo and Maxie's Steakhouses opened during March and May of 2001 ($2.0 million).

Cost
of sales as a percentage of restaurant revenues decreased by 0.3 percentage points in the first quarter of 2002, compared with the first quarter of 2001. This improvement was
primarily the result of the Angelo and Maxie's Steakhouses opened during 2001 and 2000 gaining operational efficiencies, as well as the closure of underperforming restaurants during 2001.

Restaurant
labor as a percentage of restaurant revenues decreased by 1.0 percentage point in the first quarter of 2002, compared with the first quarter of 2001. This improvement
was primarily the result of the Angelo and Maxie's Steakhouses opened during 2001 and 2000 gaining operational efficiencies, as well as the closure of underperforming restaurants during 2001.

Other
operating costs as a percentage of restaurant revenues increased by 1.5 percentage points in the first quarter of 2002, compared with the first quarter of 2001. This
increase was primarily due to increased marketing costs resulting from the growth in a frequent diner program implemented by the

9

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Company during the first quarter of 2001 with iDine Rewards Network, Inc. ("iDine"). See "Liquidity and Capital Resources" for further details.

Rent
as a percentage of restaurant revenues decreased by 0.5 percentage points in the first quarter of 2002, compared with the first quarter of 2001. This decrease results from
the fact the Company had 45 restaurants in operation at April 1, 2002, compared to 47 restaurants in operation at March 26, 2001. In addition, the majority of the Company's restaurants
incur rental costs as a percentage of revenues on a step-up basis; therefore, a reduction in revenues may reflect a more dramatic reduction in rental costs.

Selling,
general and administrative expenses decreased $0.4 million, or 12.9%, to $2.6 million in the first quarter of 2002, compared to $3.0 million in the first
quarter of 2001. The Company has decreased its
selling, general and administrative costs as the result of several reductions in force and tight control of discretionary spending, particularly salaries and wages, consulting, and legal fees.

Depreciation
and amortization decreased $0.2 million, or 8.8%, to $1.7 million in the first quarter of 2002, compared to $1.9 million in the first quarter of 2001,
primarily due to the cessation of amortization of goodwill and trade name intangibles as set forth in Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible
Assets." In addition, the number of operating restaurants in the first quarter of 2002 decreased from the first quarter of 2001.

As
the Company is not opening any new restaurants in the near future, there were no pre-opening costs during the first quarter of 2002. Pre-opening expenses
during the first quarter of 2001 primarily reflect salaries, benefits, and training costs for new employees at two Angelo and Maxie's Steakhouses opened during the first and second quarters of 2001.

Disposals
during the first quarter of 2002 resulted in minimal impact on operating results. Several asset disposals resulted in a $0.8 million loss during the first quarter of
2001.

Interest
expense decreased $0.4 million, or 30.6%, to $0.9 million in the first quarter of 2002, compared to $1.3 million in the first quarter of 2001. The decrease
is primarily the result of more favorable interest rates in 2002 and the elimination of fees charged the Company for unused portions of available borrowings under the related party debt in 2001.

The
Company recognized $0.9 million of other income during the first quarter of 2001, related to proceeds received from the sale of rights to a ground lease for one restaurant
that had been closed.

The
Company issued Series A convertible preferred stock during June 2001. The Series A preferred stock is entitled to dividends at the rate of 10.0% per annum, based
on the original price of $2.25 per share. The Company accrued preferred dividends of $0.2 million during the first quarter of 2002 that the Company intends to pay in the form of additional
shares of preferred stock during the second quarter of 2002, in part, because the Company's Credit Agreement prohibits the payment of cash dividends.

LIQUIDITY AND CAPITAL RESOURCES

|                                                |  | Thirteen weeks ended
April 1, 2002 |      | Thirteen weeks ended
March 26, 2001 |  
|----------------------------------------------- |  | ---------------------------------- | ---- | ----------------------------------- | -
|
|Cash provided by (used in) operating activities |  | $                                  | 673  |                                     | $
|Expenditures for property and equipment         |  |                                    | (332 | )                                   |  
|Expenditures for other assets                   |  |                                    |     |                                     |  
|Cash (used in) provided by financing activities |  |                                    | (384 | )                                   |  
|                                                |  |                                    |      |                                     |  
|Net (decrease) increase in cash                 |  | $                                  | (43  | )                                   | $
|                                                |  |                                    |      |                                     |  

The
Company requires capital to retire or refinance $25.0 million of senior, secured debt under the Credit Agreement that matures on August 30, 2002. In
December 2001, the Company's Board of

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Directors retained an investment bank to assist the management of the Company in a review of its strategic alternatives with a principal focus on identifying appropriate sources of capital to address
the debt maturity matter. Recent discussions with interested parties have concentrated on a sale of the Company or a sale of a significant portion of the Company's assets. Although no assurances can
be given, management continues to believe that this process will be successful and that the modifications to the credit facility provide sufficient time to consider the alternatives and execute an
acceptable solution to the Company's capital structure.

Historically,
the Company required significant capital principally for the construction and opening expenses for new restaurants and for the remodeling and refurbishing of existing
restaurants. The Company has funded its capital requirements through debt financing, both with third party banks and related parties, equity financing, and cash flows from operations. The Company does
not intend to open any new restaurants or incur any major remodeling or refurbishing costs during fiscal 2002, and anticipates capital expenditures to total approximately $1.2 million during
the same period.

Cash
provided by operating activities was $0.7 million in the first quarter 2002, compared to a deficit of $0.6 million of cash used in operating activities in the first
quarter of 2001, primarily due to reduced selling, general and administrative expenses from the prior year and interest and pre-opening expenses
paid in 2001, for which no corresponding payments were made in 2002. The Company also received $1.0 million during first quarter 2002 from iDine, a related party and owner of the iDine frequent
diner program, for the advance sale of discounted food and beverage credits. There were no such receipts in the first quarter of 2001. Pursuant to the agreement, the Company has paid
$0.8 million and $0.5 million to iDine towards its advances and for its marketing services during the first quarters of 2002 and 2001, respectively. The current agreement provides for
$2.0 million of additional cash advances subsequent to April 1, 2002. During the first quarter of 2001, the Company received $0.9 million in proceeds upon the sale of a ground
lease from a previously operated restaurant. There were no such proceeds received by the Company during the first quarter of 2002.

Cash
used in investing activities in the first quarter of 2002 consisted of restaurant capital expenditures of $0.3 million. Cash used in investing activities in the first quarter
of 2001 consisted of capital expenditures of $2.9 million primarily related to the opening of two new Angelo and Maxie's Steakhouses.

Cash
used for financing activities in the first quarter of 2002 included a net $0.2 million to pay down amounts owed under the Credit Agreement. In the first quarter of 2001, the
Company increased its borrowings on the revolving line of credit by a net $2.0 million to fund investing and operating activities and increased its borrowings from a related party by
$2.7 million primarily to fund capital expenditures. In the first quarter of 2001, the Company also made a scheduled principal payment. There were no principal payments due under the Credit
Agreement during the first quarter of 2002.

At
April 1, 2002, the Company had approximately $3.8 million available for future borrowings under the Credit Agreement, including $0.5 million from a related party.
Amounts outstanding under the Credit Agreement at April 1, 2002 totaled $25.0 million and accrued interest at the prime rate, plus 2.75%, which was 7.5% at April 1, 2002. The
balance outstanding under the Credit Agreement at April 1, 2002 includes $1.5 million funded by the related party, which accrues interest at 16.32% to give effect to the subordinate
nature of the related party's participation in the Credit Agreement.

The
Credit Agreement was amended on May 1, 2002, providing for an extension of the maturity date to August 30, 2002. In connection with the amendment, the Company paid
previously deferred interest totaling $1.0 million, plus fees of $0.4 million. Pursuant to the amendment, the Company is also obligated to make scheduled principal payments on the term
loan portion of the Credit Agreement of $0.4 million and $0.5 million on June 28, 2002 and July 31, 2002, respectively. A fee of $0.2 million will be payable if the
Company's obligations under the Credit Agreement have not been satisfied in full on or before August 1, 2002.

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The
Company also owed $5.9 million to EGI-Fund (01) Investors, L.L.C., a related party, at April 1, 2002. The amount consists of an aggregate
$5.0 million in notes, due March 31, 2005, and accrued interest at the applicable Eurodollar rate, plus 16.0%, which was 17.87% at April 1, 2002. The additional
$0.9 million consists of accrued interest and consulting fees. Interest is payable at maturity or when certain leverage ratios are attained, which management believes will not be met during
2002.

The
Company issued Series A convertible preferred stock during June 2001. The Series A preferred stock is entitled to dividends at the rate of 10.0% per annum, based
on the original price of $2.25 per share. The Company accrued preferred dividends of $0.2 million during the first quarter of 2002 that the Company intends to pay in additional shares of
preferred stock during the second quarter of 2002, in part, because the Company's Credit Agreement prohibits the payment of cash dividends.

The
Company is liable under various capital and operating lease agreements, primarily related to restaurant locations. The Company is also contingently liable under letters of credit,
primarily related to leasing obligations and self-insurance reserves, and guarantees on various third party leasing and debt agreements. The Company's contractual obligations and
contingent liabilities at April 1, 2002, have not materially changed from December 31, 2001.

On
January 31, 2002, the Company's common and Series A preferred shares were delisted from the New York Stock Exchange ("NYSE") due to failure to meet the continued listing
standards of the NYSE. The Company has submitted a listing application with the NASDAQ Stock Market. Until such time as the Company's listing application is approved, the Company's common and
Series A preferred shares are quoted on the NASD OTC Bulletin Board.

SEASONALITY

The Company's business is seasonal in nature, with revenues and operating income for the second and third quarters greater than in the first and fourth quarters
as the Company benefits from expanded seating capacity and the generally higher level of leisure travel in the spring and summer quarters.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is exposed to market risk from changes in interest rates on debt and changes in commodity prices. The Company's exposure to interest rate risk
consists of its Credit Agreement that is benchmarked to the prime rate. The impact on the Company's results of operations of a one-point interest rate change on this outstanding debt
balance as of April 1, 2002, would be approximately $0.3 million in incremental interest expense per annum. The Company's exposure to interest rate risk also consists of its related
party debt that is benchmarked to the Eurodollar rate. The impact on the Company's results of operations of a one-point interest rate change on this outstanding debt balance as of
April 1, 2002, would be approximately $0.1 million in incremental interest expense per annum. The Company does not use derivative instruments to manage borrowing costs or reduce exposure
to adverse fluctuations in the interest rate. The Company also does not use derivative instruments for trading purposes. The Company purchases certain commodities such as beef, seafood, chicken, and
cooking oil.
These commodities are generally purchased based upon purchase agreements or arrangements with vendors. These purchase agreements or arrangements may contain features that fix the commodity price or
define the price from an agreed upon formula. The Company does not use financial instruments to hedge commodity prices because these purchase arrangements help control the ultimate cost paid and any
commodity price fluctuations are generally short term in nature.

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PART IIOTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

|3.1  |  | (1)                                                                                                                                  |  | Restated Certificate of Incorporation of the Company, as amended. (1)                
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------------
|     |  | (2)                                                                                                                                  |  | Certificate of Amendment of Restated Certificate of Incorporation of the Company. (2)
|3.2  |  | Amended and Restated Bylaws of the Company. (1)                                                                                     
|3.3  |  | Certificate of Designations of the Series A Preferred Stock. (3)                                                                    
|4.1  |  | Specimen Common Stock Certificate. (2)                                                                                              
|4.2  |  | Section 203 of the Delaware General Corporation Law. (2)                                                                            
|4.3  |  | Specimen Series A Preferred Stock Certificate. (3)                                                                                  
|10.1 |  | Incentive Compensation Agreement dated as of February 12, 2002, between the Company and Thomas J. Walters and Kenneth R. Posner. (4)

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The
Company filed a report on Form 8-K on February 25, 2002. Under Item 5, the Company reported it had issued a press release announcing a reverse stock split
of its common stock, effective as of 5:00 p.m. (Eastern standard time) on February 22, 2002. In the reverse stock split, each six shares of the Company's common stock issued and
outstanding were automatically converted into one share of the Company's common stock and holders of the Company's common stock who otherwise would have been entitled to receive a fractional share as
a result of the reverse stock split received one share of the Company's common stock.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|                   |  | CHART HOUSE ENTERPRISES, INC.
|------------------ |  | -----------------------------
|Date: May 14, 2002 |  | By:                          
|                   |  |                              
|Date: May 14, 2002 |  | By:                          

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