**UNITEDSTATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**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  March 29, 2004**                                                                    |
|                                                                                                                             |   |                                                                                                 |
| **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**                                                                        |

 
| **ANGELO  AND MAXIE’S, INC.**                               |
|------------------------------------------------------------------|
| (Exact name of  registrant as specified in its charter)          |
|                                                             |   |   |
| **Delaware**                                                     |   | **33-0147725** |
| (State or other  jurisdiction of  Incorporation or organization) |   | (I.R.S. Employer  Identification No.) |
|                                                             |   |   |
| **2  North Riverside, Seventh Floor, Chicago, IL 60606**         |
| (Address of principal  executive offices, including zip code)    |
|                                                             |   |   |
| **(312)  466-3950**                                              |
| (registrant’s telephone  number, including area code)       |

 

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter periods that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for thepast 90 days.

 
|   | Yes | ý | No | o |
|--------|-----|--------|----|---|

 

Indicate by checkmark whether the registrant is an accelerated filer (as defined by Rule 12b-2of the Exchange Act).

 
|   | Yes | o | No | ý |
|--------|-----|---|----|--------|

 

Indicate thenumber of shares outstanding of each of the issuer’s classes of common stock,as of May 13, 2004:

 

Common Stock ($.01 parvalue) 2,005,131

 

 

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**PART I -FINANCIAL INFORMATION**

 

**ITEM 1.   FINANCIAL STATEMENTS.**

 

**ANGELO AND MAXIE’S, INC. AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

**(In thousands, except share data)**

 
|                                                                                                                                                                       |   | **March 29,  2004** |   | **December  29, 2003** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|------------------------|--------|
|                                                                                                                                                                       |   | **(Unaudited)**     |   |                   |   |
| **ASSETS**                                                                                                                                                                 |   |                |   |                   |   |
| Current assets:                                                                                                                                                            |   |                |   |                   |   |
| Cash and cash  equivalents                                                                                                                                                 |   | $                   | 8,552  |                   | $      | 4,551 |   |
| Accounts  receivable, net                                                                                                                                                  |   | 496                 |   | 600                    |   |
| Inventories                                                                                                                                                                |   | 151                 |   | 370                    |   |
| Prepaid expenses  and other current assets                                                                                                                                 |   | 783                 |   | 1,024                  |   |
| Total current  assets                                                                                                                                                      |   | 9,982               |   | 6,545                  |   |
| Equipment and  improvements (held for sale, see Note 2):                                                                                                                   |   |                |   |                   |   |
| Equipment                                                                                                                                                                  |   | 1,577               |   | 3,830                  |   |
| Leasehold  interests and improvements                                                                                                                                      |   | 2,941               |   | 8,422                  |   |
|                                                                                                                                                                       |   | 4,518               |   | 12,252                 |   |
| Less:  Accumulated depreciation and amortization                                                                                                                           |   | 1,428               |   | 3,340                  |   |
| Equipment and  improvements, net                                                                                                                                           |   | 3,090               |   | 8,912                  |   |
| Other  non-current assets:                                                                                                                                                 |   |                |   |                   |   |
| Restricted cash                                                                                                                                                            |   | 2,627               |   | 2,627                  |   |
| Leased property  under capital leases, net                                                                                                                                 |   | 1,062               |   | 1,077                  |   |
| Intangibles, net  (held for sale, see Note 2)                                                                                                                              |   | 2,355               |   | 2,370                  |   |
| Other  non-current assets                                                                                                                                                  |   | 199                 |   | 497                    |   |
| Total other  non-current assets                                                                                                                                            |   | 6,243               |   | 6,571                  |   |
| Total assets                                                                                                                                                               |   | 19,315              |   | 22,028                 |   |
|                                                                                                                                                                       |   |                |   |                   |   |
| **LIABILITIES  AND STOCKHOLDERS’ EQUITY**                                                                                                                             |   |                |   |                   |   |
| Current  liabilities:                                                                                                                                                      |   |                |   |                   |   |
| Current portion  of non-current liabilities                                                                                                                                |   | 32                  |   | 30                     |   |
| Accounts payable                                                                                                                                                           |   | 967                 |   | 1,289                  |   |
| Accrued  liabilities                                                                                                                                                       |   | 1,748               |   | 2,859                  |   |
| Deferred gain                                                                                                                                                              |   | —              |   | 967                    |   |
| Total current  liabilities                                                                                                                                                 |   | 2,747               |   | 5,145                  |   |
| Non-current  liabilities (excluding current portion):                                                                                                                      |   |                |   |                   |   |
| Long-term  portion of capital lease obligation                                                                                                                             |   | 1,836               |   | 1,848                  |   |
| Other long-term  obligations                                                                                                                                               |   | 101                 |   | 752                    |   |
| Total  non-current liabilities (excluding current portion)                                                                                                                 |   | 1,937               |   | 2,600                  |   |
| Stockholders’  equity:                                                                                                                                                |   |                |   |                   |   |
| Preferred stock,  $1.00 par value, 10,000,000 shares authorized; 4,134,736 shares issued and  outstanding at March 29, 2004 and December 29, 2003                          |   | 4,135               |   | 4,135                  |   |
| Common stock,  $0.01 par value, 30,000,000 shares authorized; 2,005,131 and 2,001,713 shares  issued and outstanding at March 29, 2004 and December 29, 2003, respectively |   | 20                  |   | 20                     |   |
| Additional  paid-in capital                                                                                                                                                |   | 65,460              |   | 65,451                 |   |
| Retained deficit                                                                                                                                                           |   | (54,984             | )      | (55,323                | )      |
| Total  stockholders’ equity                                                                                                                                           |   | 14,631              |   | 14,283                 |   |
| Total liabilities  and stockholders’ equity                                                                                                                           |   | $                   | 19,315 |                   | $      | 22,028 |   |

 

The accompanying notesare an integral part of these consolidated financial statements.

 

1

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**ANGELO AND MAXIE’S, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(In thousands, except per share data)**

**(Unaudited)**

 
|                                                     |   | **Quarterly  periods ended** |   |
|----------------------------------------------------------|--------|------------------------------|--------|
|                                                     |   | **March 29,  2004**          |   | **March 31,  2003** |   |
|                                                     |   |                         |   |   |   |
| Revenues                                                 |   | $                            | 3,045  |   | $ | 3,280 |   |
| Operating costs  and expenses:                           |   |                         |   |   |   |
| Cost of sales                                            |   | 1,135                        |   | 1,160 |   |
| Restaurant labor                                         |   | 627                          |   | 671 |   |
| Other operating  costs                                   |   | 612                          |   | 472 |   |
| Rent                                                     |   | 243                          |   | 242 |   |
| Total restaurant  costs                                  |   | 2,617                        |   | 2,545 |   |
| General and  administrative expenses                     |   | 466                          |   | 668 |   |
| Depreciation and  amortization                           |   | 28                           |   | 141 |   |
| Loss on disposal  of assets                              |   | —                       |   | 11 |   |
| Total restaurant  and operating costs                    |   | 3,111                        |   | 3,365 |   |
| Loss from  operations                                    |   | (66                          | )      | (85 | ) |
| Interest  expense, net                                   |   | 23                           |   | 30 |   |
| Other income                                             |   | (51                          | )      | (51 | ) |
| Loss from  continuing operations before income taxes     |   | (38                          | )      | (64 | ) |
| Provision for  income taxes                              |   | —                       |   | — |   |
| Loss from  continuing operations                         |   | (38                          | )      | (64 | ) |
| Discontinued  operations:                                |   |                         |   |   |   |
| (Loss) income  from operations                           |   | (107                         | )      | 121 |   |
| Loss on sale                                             |   | (253                         | )      | — |   |
| Recognition of  deferred gain on sale                    |   | 967                          |   | — |   |
| Income from  discontinued operations                     |   | 607                          |   | 121 |   |
| Net income                                               |   | $                            | 569    |   | $ | 57 |   |
| Preferred  dividends                                     |   | 232                          |   | 232 |   |
| Net income  (loss) applicable to common shares           |   | $                            | 337    |   | $ | (175 | ) |
| Net income  (loss) per common share - Basic and diluted: |   |                         |   |   |   |
| Continuing  operations                                   |   | $                            | (0.13  | ) | $ | (0.15 | ) |
| Discontinued  operations                                 |   | 0.30                         |   | 0.06 |   |
|                                                     |   | $                            | 0.17   |   | $ | (0.09 | ) |
| Weighted-average  shares outstanding                     |   | 2,004                        |   | 1,989 |   |

 

The accompanying notesare an integral part of these consolidated financial statements.

 

2

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**ANGELO AND MAXIE’S, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(In thousands, unaudited)**

 
|                                                                             |   | **Quarterly  periods ended** |     |
|----------------------------------------------------------------------------------|--------|------------------------------|----------|
|                                                                             |   | **March 29,  2004**          |     | **March 31,  2003** |   |
| Cash flows from  operating activities:                                           |   |                         | * * |   | * * |
| Net income                                                                       |   | $                            | 569      |   | $ | 57 |   |
| Adjustments to  reconcile net income to cash flows used in operating activities: |   |                         |     |   |   |
| Depreciation and  amortization                                                   |   | 28                           |     | 320 |   |
| Loss on disposal  of assets                                                      |   | —                       |     | 11 |   |
| Common stock  issued in lieu of compensation                                     |   | 9                            |     | 9 |   |
| Recognition of  deferred gain on sale                                            |   | (967                         | )        | — |   |
| Changes in  working capital:                                                     |   |                         |     |   |   |
| Decrease in  accounts receivable                                                 |   | 104                          |     | 36 |   |
| Decrease in  inventories                                                         |   | 219                          |     | 37 |   |
| Decrease in  prepaid expenses and other current assets                           |   | 241                          |     | 301 |   |
| Decrease in  other non-current assets                                            |   | 298                          |     | 9 |   |
| Decrease in  accounts payable                                                    |   | (322                         | )        | (189 | ) |
| Decrease in  accrued liabilities                                                 |   | (1,111                       | )        | (879 | ) |
| Decrease in  liabilities of discontinued operations                              |   | —                       |     | (170 | ) |
| Decrease in  other non-current obligations (excluding current portion)           |   | (651                         | )        | (54 | ) |
| Net cash used in  operating activities                                           |   | (1,583                       | )        | (512 | ) |
| Cash flows from  investing activities:                                           |   |                         |     |   |   |
| Expenditures for  equipment and improvements                                     |   | —                       |     | (11 | ) |
| Proceeds from  sale of restaurant assets                                         |   | 5,594                        |     | — |   |
| Net cash  provided by (used in) investing activities                             |   | 5,594                        |     | (11 | ) |
| Cash flows from  financing activities:                                           |   |                         |     |   |   |
| Payments on  landlord notes                                                      |   | —                       |     | (23 | ) |
| Reduction of  obligations under capital leases                                   |   | (10                          | )        | (7 | ) |
| Net cash used in  financing activities                                           |   | (10                          | )        | (30 | ) |
| Increase  (decrease) in cash                                                     |   | 4,001                        |     | (553 | ) |
| Cash and cash  equivalents, beginning of period                                  |   | 4,551                        |     | 7,651 |   |
| Cash and cash  equivalents, end of period                                        |   | $                            | 8,552    |   | $ | 7,098 |   |

 

The accompanying notesare an integral part of these consolidated financial statements

 

3

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**ANGELO AND MAXIE’S, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**March 29, 2004**

**(Unaudited)**

 

**(1)           BASISOF PRESENTATION**

 

The accompanyingconsolidated financial statements of Angelo and Maxie’s, Inc. and itswholly-owned subsidiaries (the “Company”) for the quarterly periods ended March29, 2004 and March 31, 2003, have been prepared in accordance with generallyaccepted accounting principles, and with the instructions to Form 10-Q.  These financial statements have not beenaudited by independent public accountants, but include all adjustments(consisting of a normal and recurring nature) that are, in the opinion ofmanagement, necessary for a fair presentation of the financial condition,results of operations, and cash flows for such periods. However, these resultsare not necessarily indicative of results for any other interim period or forthe full fiscal year.

 

The Company consummated a sale of three of itsthen-existing five steakhouses on January 7, 2004 and its Board of Directorsapproved a proposal in September 2003 to sell its remaining two steakhouses andrelated intellectual property.  See Note2 “Sale of the Angelo and Maxie’s Brand and Related Operating Assets.”  The Company also consummated a sale of 39 ofits then-existing 45 restaurants (“the Chart House Business”) to a third partyas of July 30, 2002.  See Note 3 “Saleof the Chart House Business.”  Theoperations of the sold restaurants have been presented as discontinuedoperations for the quarters ended March 29, 2004 and March 31, 2003, and theCompany has reclassified its Consolidated Statements of Operations for thequarters then ended in accordance with Statement of Financial AccountingStandards No. 144, “Accounting for the Impairment or Disposal of Long-LivedAssets” (“FAS 144”).  In connection withthe proposed sale of its remaining two steakhouses and related intellectualproperty, the assets of the two remaining Angelo and Maxie’s restaurants areconsidered to be held for sale in accordance with FAS 144.  However, the operations of the remaining twoAngelo and Maxie’s restaurants are not presented as discontinued on theaccompanying Statements of Operations because the Company believes such apresentation would not be meaningful to the reader.

 

The preparation of financial statements in conformitywith generally accepted accounting principles in the United States of Americarequires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets andliabilities as of the date of the financial statements and the reported amountsof revenues and expenses during the reporting period.  Actual results could differ from those estimates.

 

Certain information and footnote disclosures normallyincluded in financial statements in accordance with generally acceptedaccounting principles in the United States of America have been omittedpursuant to requirements of the Securities and Exchange Commission.  Management believes that the disclosuresincluded in the accompanying interim financial statements and footnotes areadequate, but should be read in conjunction with the consolidated financialstatements and notes thereto included in the Company’s Annual Report on Form10-K for the year ended December 29, 2003.

 

Certain prior period balances have been reclassifiedto conform to the current period presentation.

 

**(2)           SALEOF THE ANGELO AND MAXIE’S BRAND AND RELATED OPERATING ASSETS**

 

On October 31, 2003, the Company entered into adefinitive agreement to sell three of its then-existing five steakhouses locatedin Midtown Manhattan, New York, Reston, Virginia, and Washington, D.C toMcCormick and Schmick Restaurant Corp. (“M&S”) for $5.35 million in cash,subject to certain adjustments for current assets and liabilities.  The transaction closed on January 7, 2004and M&S has since converted all three steakhouses to another restaurantconcept.

 

In September 2003, the Board of Directors approved aproposal to sell the Company’s remaining two steakhouses and certain Angelo andMaxie’s intellectual property.  Noassurances can be provided as to whether or when a transaction will beconsummated.

 

In connection with the proposed sale of the remainingtwo steakhouses and related intellectual property, the assets of the remainingtwo Angelo and Maxie’s restaurants are considered to be held for sale inaccordance with FAS 144.  However, theoperations of the remaining two Angelo and Maxie’s restaurants are notpresented as discontinued on the accompanying Statements of Operations becausethe Company believes such a presentation would not be meaningful to the reader.

 

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Condensed financialinformation for the three locations sold on January 7, 2004 and presented asdiscontinued operations for the quarterly periods ended March 29, 2004 andMarch 31, 2003 is as follows (in thousands):

 

|                                        |   | **Quarterly  period ended  March 29, 2004** |   | **Quarterly  period ended  March 31, 2003** |   |
|---------------------------------------------|--------|---------------------------------------------|--------|---------------------------------------------|--------|
|                                        |   |                                        |   |                                        |   |
| Revenues                                    |   | $                                           | 258    |                                        | $      | 3,525 |   |
| Total restaurant  costs                     |   | 365                                         |   | 3,225                                       |   |
| Depreciation and  amortization              |   | —                                      |   | 179                                         |   |
| (Loss) income  from discontinued operations |   | $                                           | (107   | )                                           | $      | 121 |   |

 

**(3)           SALEOF THE CHART HOUSE BUSINESS**

 

In May 2002, the Board of Directors of the Companyauthorized the sale of the Chart House Business.  The sale was completed as of July 30, 2002, for consideration ofapproximately $55.3 million, consisting of cash and the assumption ofapproximately $3.1 million of certain current liabilities.  The Company recorded a provision for anestimated loss on sale of discontinued operations of $3.7 million in the secondquarter of 2002, which was revised to $2.4 million in the third quarter of2002, primarily as a result of the elimination of net liabilities to landlordsfollowing the receipt of the landlords’ consent to assign certain leases to thepurchaser.  In the first quarter of2004, the Company further adjusted its liabilities associated with the saleresulting in the recognition of an additional $0.3 million loss on thesale.  At March 29, 2004, the Companycontinues to seek approximately $0.3 million from the purchaser, representingamounts that the Company believes the purchaser wrongfully failed to pay underthe asset purchase agreement, and related interest, costs, and attorneys’fees.  The Company has taken legalaction to collect these funds.  Thepurchaser has filed a counterclaim, seeking a purchase price adjustment of$0.15 million.  See also Note 6“Commitments and Contingencies.”

 

**(4)           DEBT**

 

During 2000, the Companyentered into two note agreements with one landlord for an aggregate amount of$0.7 million.  The notes amortized overseven year terms, bore interest at 9.0%, and were payable in monthlyinstallments.  The Company madescheduled principal payments on these notes totaling $23,000 during the firstquarter of 2003.  Interest expense andcash paid for interest related to these notes amounted to $11,000 for the firstquarter of 2003.  During thesecond quarter of 2003, the Company prepaid, without penalty, the remainingbalances on the two notes.

 

**(5)           RELATEDPARTY TRANSACTIONS**

 

During the first quarters of 2004 and 2003, theCompany recognized $63,000 of fees for financial advisory services provided tothe Company by a related party.

 

Payments to related parties for rent at one restaurant totaled $4,000and $107,000 in the first quarters of 2004 and 2003, respectively.  Future rent liability with respect to thislocation was transferred to M&S on January 7, 2004 in connection with theconsummation of the sale of three of the Company’s then-existing fivesteakhouses as of that date (see Note 2 “Sale of the Angelo and Maxie’s Brandand Related Operating Assets”).

 

On December 11, 2003, the Company’s President andChief Executive Officer became a full-time employee of Rewards Network, Inc.(“iDine”).  In connection with thischange, the Company entered into an agreement with iDine whereby servicesprovided to the Company by the Company’s President and Chief Executive Officerare billed to the Company by iDine based on an agreed upon hourly rate.  The Company made payments totaling $7,000during the first quarter of 2004 pursuant to this agreement.

 

On June 26, 2003, the Company entered into anoperating lease for office space with a related party.  This agreement provides, among other things,that the landlord provide office space for the Company’s corporate employeesand certain office services.  Thisagreement is terminable by either party with a thirty day notice.  The Company made payments totaling $18,000pursuant to this agreement during the first quarter of 2004.

 

5

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The relationships described above stem from one ormore Company stockholders and/or members of the Company’s Board of Directorsmaintaining ownership interest in and influential management positions at orwith these related parties’ organizations.

 

**(6)**           **COMMITMENTSAND CONTINGENCIES**

 

The Company periodically is a defendant in litigationincidental to its business activities. While any litigation or investigation has an element of uncertainty, theCompany believes that the outcome of any of these matters will not have amaterial adverse effect on its financial condition or operations.

 

In connection with a 1997 sale of previously operatedrestaurants, the Company agreed to guarantee up to $4.0 million of the buyer’snote obligation to its lender through January 2004.  Subsequent to the release of this guarantee during the firstquarter of 2004, the Company recognized a $1.0 million deferred gain on thesale of these restaurants.  This salewas not connected to the sale of the Chart House Business or the sale of threeof the Company’s then-existing five steakhouses.

 

The Company maintains letters of credit primarily tocover self-insurance reserves and lease obligations.  In connection with the sale of the Chart House Business, and inorder to minimize costs associated with outstanding letters of credit, theCompany established a cash collateral account equal to the full balance of itsobligations under outstanding letters of credit, which totaled $2.6 million atMarch 29, 2004.  Such funds arepresented on the consolidated balance sheets as restricted cash, a non-currentasset.

 

The Company is contingently liable, in certaincircumstances, for lease obligations with respect to 20 properties subleased orassigned to third parties in the event of a default by the third party.  In connection with the sale of the ChartHouse Business, the Company received a guarantee by Landry’s Restaurant’s, Inc.(“Landry’s”) with respect to 19 of these properties.  On February 20, 2004, the Company filed in the Chancery Court forthe State of Delaware a complaint against the purchaser of the Chart HouseBusiness (“Purchaser”) and its parent company, Landry’s (see also Note 3 “Saleof the Chart House Business”).  Theclaim demands that Landry’s perform its obligation to guarantee the full andtimely performance of all obligations and agreements of the Purchaser (the“Guarantee”).   In November 2003, thePurchaser defaulted on one of the real estate leases (the “Lease”) that itassumed when it acquired the Chart House Business.  Future undiscounted cash payments pursuant to the Lease exceed$30.0 million over a 17 year period. Historically, the Company has treated the Lease and other surviving realestate obligations of the Chart House Business as contingent liabilities, asthe likelihood of the Company having to perform on those obligations is remotein light of the Guarantee.  With respectto the other property, the Company holds a standby letter of credit from the sublesseeof this property equaling one year’s rent on the property.

 

**(7)           SUBSEQUENT EVENTS**

** **

The Companydeclared a dividend on each share of the Company's Series A Preferred Stockoutstanding on May 14, 2004.  Holders ofrecord on that date will receive a cash dividend of $0.1125 per share on June1, 2004.

 

**(8)           NEWACCOUNTING PRONOUNCEMENTS**

 

In December 2003, the FASB issued FASB InterpretationNo. 46 (revised December 2003), “Consolidation of Variable Interest Entities”(“VIEs”) (“FIN 46R”), which addresses how a business enterprise should evaluatewhether it has a controlling financial interest in an entity through meansother than voting rights and accordingly should consolidate the entity.  FIN 46R replaces FASB Interpretation No. 46,Consolidation of Variable Interest Entities, which was issued in January 2003.The Company was required to apply FIN 46R to variable interests in VIEs createdafter December 31, 2003.  The Companycurrently has no contractual relationships or other business relationships witha VIE.

 

FASB Statement No. 150, Accounting for Certain Financial Instrumentswith Characteristics of both Liabilities and Equity, was issued in May2003.  This Statement establishesstandards for the classification and measurement of certain financial instrumentswith characteristics of both liabilities and equity.  The Statement also includes required disclosures for financialinstruments within its scope.  For theCompany, the Statement was effective for instruments entered into or modifiedafter May 31, 2003 and otherwise effective as of January 1, 2004, except formandatorily redeemable financial instruments. The effective date has been deferred indefinitely for certain othertypes of mandatorily redeemable financial instruments.  The adoption of this standard did not have amaterial impact on the consolidated financial statements.

 

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**ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS.**

 

*ThisQuarterly Report on Form 10-Q and the documents incorporated herein byreference contain forward-looking statements that have been made pursuant toprovisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements represent theCompany’s expectations or beliefs concerning future events, including anystatements regarding: future sales and gross profit percentages, thecontinuation of historical trends, the sufficiency of the Company’s cashbalances, and cash generated from operating, financing and/or investingactivities for the Company’s future liquidity and capital resource needs.  Without limiting the foregoing, the words“believes,” “intends,” “projects,” “plans,” “expects,” “anticipates,” andsimilar expressions are intended to identify forward-looking statements.  The Company cautions that these statementsare further qualified by important economic and competitive factors that couldcause actual results to differ materially from those in the forward-lookingstatements.  These factors include,without limitation, risks of the restaurant industry, an industry with manywell-established competitors with greater financial and other resources thanthe Company, and the impact of changes in consumer trends, employeeavailability, and cost increases. Accordingly, such forward-looking statements do not purport to bepredictions of future events or circumstances and may not be realized.*

 

**OVERVIEW**

 

The Company consummated a sale of three of itsthen-existing five steakhouses on January 7, 2004 and its Board of Directorsapproved a proposal in September 2003 to sell its remaining two steakhouses andrelated intellectual property.  See Note2 “Sale of the Angelo and Maxie’s Brand and Related Assets.”  The Company also consummated a sale of 39 ofits then-existing 45 restaurants (“the Chart House Business”) to a third partyas of July 30, 2002.  See Note 3 “Saleof the Chart House Business.”  Theoperations of the sold restaurants have been presented as discontinued operationsfor the quarters ended March 29, 2004 and March 31, 2003, and the Company hasreclassified its Consolidated Statements of Operations for the quarters thenended in accordance with Statement of Financial Accounting Standards No. 144,“Accounting for the Impairment or Disposal of Long-Lived Assets” (“FAS 144”).  In connection with the proposed sale of itsremaining two steakhouses and related intellectual property, the assets of thetwo remaining Angelo and Maxie’s restaurants are considered to be held for salein accordance with FAS 144.  However,the operations of the remaining two Angelo and Maxie’s restaurants are notpresented as discontinued on the accompanying Statements of Operations becausethe Company believes such a presentation would not be meaningful to the reader.

 

The Company operates two Angelo and Maxie’s Steakhouses,which are full-service steakhouse restaurants located in New York, New York andWest Palm Beach, Florida.  The Companyoperated the following number of restaurants at the end of the first quartersof 2004 and 2003:

 
|                |   | **Angelo and  Maxie’s  Steakhouses** |   | **Discontinued  operations** |   | **Total** |   |
|---------------------|--------|-------------------------------------------|--------|------------------------------|--------|-----------|--------|
| First quarter  2004 |   | 2                                         |   | —                       |   | 2         |   |
| First quarter  2003 |   | 2                                         |   | 3                            |   | 5         |   |

 

The Company acquired the Angelo and Maxie’s Steakhouseconcept and one restaurant during 1999 to diversify its then-seafood dominatedportfolio.   The Company opened a totalof six additional Angelo and Maxie’s restaurants over 2000 and 2001.  One of these locations was closed during thefourth quarter of 2001 and another location was closed during the fourthquarter of 2002.  During 2001, theCompany canceled restaurant development plans for three locations, did not openany locations during 2002 and 2003, and currently has no plans to openadditional restaurants during 2004.  TheCompany continues to focus on a sale of the Angelo and Maxie’s Steakhouse conceptand its two remaining restaurants.  Inthe event that a definitive agreement for such a sale is executed, the Companyplans to seek shareholder approval for such sale and the subsequent dissolutionand liquidation of the Company.  Noassurances can be given as to whether or when a transaction will beconsummated.

 

7

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**RESULTSOF OPERATIONS**

 

The following table presents the results of operationsfor each of the first quarters ended March 29, 2004 and March 31, 2003.  Continuing operations relate to theoperations of the Company’s two remaining Angelo and Maxie’s Steakhouses.  The operations of the three locations soldon January 7, 2004 and the Chart House Business are presented as discontinued.

 

 
|                                                                |   | **Quarterly  periods ended** |   |
|---------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                |   | **March 29,  2004**          |   | **March 31,  2003** |   |
| **(Unaudited, dollars in thousands)**                               |   | **Amount**                   |   | **%** |   | **Amount** |   | **%** |   |
|                                                                |   |                         |   |   |   |   |   |   |   |
| Revenues                                                            |   | $                            | 3,045  |   | 100.0 |   | $ | 3,280 |   | 100.0 |   |
|                                                                |   |                         |   |   |   |   |   |   |   |
| Operating costs  and expenses:                                      |   |                         |   |   |   |   |   |   |   |
| Cost of sales                                                       |   | 1,135                        |   | 37.3 |   | 1,160 |   | 35.4 |   |
| Restaurant labor                                                    |   | 627                          |   | 20.6 |   | 671 |   | 20.5 |   |
| Other operating  costs                                              |   | 612                          |   | 20.1 |   | 472 |   | 14.4 |   |
| Rent                                                                |   | 243                          |   | 8.0 |   | 242 |   | 7.4 |   |
| Total restaurant  costs                                             |   | 2,617                        |   | 85.9 |   | 2,545 |   | 77.6 |   |
| Restaurant  operating income (before depreciation and amortization) |   | 428                          |   | 14.1 |   | 735 |   | 22.4 |   |
| General and  administrative expenses                                |   | 466                          |   | 15.3 |   | 668 |   | 20.4 |   |
| Depreciation and  amortization                                      |   | 28                           |   | 0.9 |   | 141 |   | 4.3 |   |
| Loss on sales of  assets                                            |   | —                       |   | — |   | 11 |   | 0.3 |   |
| Total restaurant  and operating costs                               |   | 3,111                        |   | 102.2 |   | 3,365 |   | 102.6 |   |
| Loss from  operations                                               |   | (66                          | )      | (2.2 | ) | (85 | ) | (2.6 | ) |
| Interest  expense, net                                              |   | 23                           |   | 0.8 |   | 30 |   | 0.9 |   |
| Other income                                                        |   | (51                          | )      | (1.7 | ) | (51 | ) | (1.6 | ) |
| Loss from  continuing operations before income taxes                |   | (38                          | )      | (1.2 | ) | (64 | ) | (2.0 | ) |
| Provision for  income taxes                                         |   | —                       |   | — |   | — |   | — |   |
| Loss from  continuing operations                                    |   | (38                          | )      | (1.2 | ) | (64 | ) | (2.0 | ) |
| Discontinued  operations:                                           |   |                         |   |   |   |   |   |   |   |
| (Loss) income  from operations                                      |   | (107                         | )      | (3.5 | ) | 121 |   | 3.7 |   |
| Loss on sale                                                        |   | (253                         | )      | (8.3 | ) | — |   | — |   |
| Recognition of  deferred gain on sale                               |   | 967                          |   | 31.8 |   | — |   | — |   |
| Income from  discontinued operations                                |   | 607                          |   | 19.9 |   | 121 |   | 3.7 |   |
| Net income                                                          |   | $                            | 569    |   | 18.7 |   | $ | 57 |   | 1.7 |   |
| Preferred stock  dividends                                          |   | 232                          |   | 7.6 |   | 232 |   | 7.1 |   |
| Net income  (loss) applicable to common shares                      |   | $                            | 337    |   | 11.1 |   | $ | (175 | ) | (5.3 | ) |

 

Angelo and Maxie’srevenues are derived entirely from food and beverage sales.  Revenues decreased $235,000, or 7.2%, to$3,045,000 in the first quarter of 2004, compared to $3,280,000 in the firstquarter of 2003.  The decrease inrevenues is due in part to the severely cold weather experienced in the NewYork area during the first half of the first quarter of 2004.

 

Cost of sales is composed of the cost of food andbeverages.  Cost of sales as apercentage of revenues increased by 1.9 percentage points to 37.3% in the firstquarter of 2004, compared with 35.4% in the first quarter of 2003.  This increase was primarily the result ofprice increases to certain beef products that occurred during the fourthquarter of 2003 and continued into the first quarter of 2004.  The Company expects that comparative trendto continue for the next two quarters of 2004.

 

Restaurant labor consists of restaurant managementsalaries, hourly staff payroll costs, and other payroll-related items.  Restaurant labor as a percentage of revenuesincreased by 0.1 percentage points to 20.6% in the first quarter of 2004,compared with 20.5% in the first quarter of 2003.  This slight increase is primarily a result of the decrease inrevenues in the first quarter of 2004, thereby causing certain fixed portionsof restaurant labor to comprise a larger percentage of revenues.

 

Other operating expenses consist primarily of variousrestaurant-level costs, which are generally variable and are expected tofluctuate with revenues.  Other operatingcosts as a percentage of restaurant revenues increased by 5.7 percentage pointsto 20.1% in

 

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the first quarter of 2004, compared with 14.4% in the first quarter of2003, primarily as a result of increased marketing spending coupled with costsassociated with providing certain additional services and amenities at one ofthe locations.

 

Rent as a percentage of revenues increased by 0.6percentage points to 8.0% in the first quarter of 2004, compared with 7.4% inthe first quarter of 2003. This increase is the result of the decrease inrevenues during the first quarter of 2004, thereby causing rent to comprise alarger percentage of revenues.

 

General andadministrative expenses are composed of expenses associated with corporate andadministrative functions that support restaurant operations, includingmanagement and staff salaries, employee benefits, travel, legal andprofessional fees, technology, and market research.  General and administrative expenses decreased $202,000 to$468,000 in the first quarter of 2004, compared to $668,000 in the firstquarter of 2003.  The decrease isprimarily the result of a reduction in the size of the corporate management andstaff that occurred during the fourth quarter of 2003 and the first quarter of2004.  The Company believes that thegeneral and administrative expenses incurred in the first quarter of 2004reflect a normal quarterly run-rate for these expenses.

 

Depreciation andamortization expense includes the depreciation of fixed assets and theamortization of leasehold improvements at both the restaurants and corporatelocations.  Depreciation andamortization decreased $113,000 to $28,000 in the first quarter of 2004, comparedto $141,000 in the first quarter of 2003. The decrease is due to the cessation of depreciation on the restaurantfixed assets and leasehold improvements in connection with the assets beingclassified as held for sale during the third quarter of 2003 in accordance withFAS 144.

 

Interest expense, net decreased $7,000 to $23,000 inthe first quarter of 2004, compared to $30,000 in the first quarter of2003.  The current quarter interestexpense includes non-cash interest expense related to a capital lease (seediscussion of other income in the following paragraph), offset by interestincome earned on the Company’s outstanding investable cash.  The decrease is due primarily to the prioryear quarter also including interest expense related to an outstanding termloan that was retired during the second quarter of 2003.

 

Other income remained flat at $51,000 in the firstquarter of 2004, compared to the first quarter of 2003.  The Company is committed to a capital leaseat a location it has subleased to a third party.  This capital lease is reported on the balance sheet in accordancewith Statement of Financial Accounting Standards No. 13, “Accounting forLeases,” and non-cash reductions to the liability are reflected in otherincome.

 

Income from discontinued operations increased $486,000in the first quarter of 2004, compared to the first quarter of 2003.  The increase was due to the followingfactors:

 

•                  The recognitionof a $967,000 deferred gain on the sale of previously disposedrestaurants.  See Part I, Item 1, Note 6“Commitments and Contingencies.”

 

•                  The recognitionof an additional $253,000 loss on the sale of the Chart House Business.  See Part I, Item 1, Note 3 “Sale of theChart House Business.”

 

•                  A $228,000decrease in income from operations of the three steakhouses sold on January 7,2004.  See Part 1, Item 1, Note 2 “Saleof the Angelo and Maxie’s Brand and Related Operating Assets.”  This decrease was due to the first quarterof 2004 containing only eight days of operations (prior to the sale) for thethree sold locations, compared to ninety-one days of operations for thoselocations in the first quarter of 2003.

 

The Company issued Series A convertible preferredstock, par value $1.00 per share (“Series A Preferred Stock”), during June2001.  The Series A Preferred Stock isentitled to dividends at the rate of 10.0% per annum, based on the originalissue price of $2.25 per share.  TheCompany accrued dividends on the Series A Preferred Stock aggregating $0.2million during each of the first quarters of 2004 and 2003.

 

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**LIQUIDITY AND CAPITAL RESOURCES**

 
|                                                  |   | **Quarterly periods ended** |   |
|-------------------------------------------------------|--------|-----------------------------|--------|
| **(Unaudited, dollars in thousands)**                 |   | **March 29, 2004**          |   | **March 31, 2003** |   |
| Net cash used in  operating activities                |   | $                           | (1,583 | ) | $ | (512 | ) |
| Expenditures for  equipment and improvements          |   | —                      |   | (11 | ) |
| Proceeds from  sale of restaurant assets              |   | 5,594                       |   | — |   |
| Cash used in  financing activities                    |   | (10                         | )      | (30 | ) |
| Net increase  (decrease) in cash and cash equivalents |   | $                           | 4,001  |   | $ | (553 | ) |

 

The Company consummated a sale of three of itsthen-existing five steakhouses on January 7, 2004.  The net cash proceeds from this transaction of approximately$5,594,000 are summarized in the following table (in thousands):

 
| Payment for  restaurant assets               |   | $    | 5,350  |   |
|----------------------------------------------|--------|------|--------|--------|
| Payment for  working capital items           |   | 317  |   |
| Total  transaction costs                     |   | (183 | )      |
| Transaction  costs paid during 2003          |   | 110  |   |
| Net proceeds  from sale of restaurant assets |   | $    | 5,594  |   |

 

The Company had $8,552,000 in cash for generalcorporate purposes at March 29, 2004. The Company believes that this remaining cash balance, together with netcash provided by the continuing operating activities of its remaining twosteakhouses, will be sufficient to fund its operating expenses and capitalneeds for at least the next twelve months.

 

Historically, the Company required significant capitalprincipally for the construction and opening expenses for new restaurants andfor the remodeling and refurbishing of existing restaurants.  The Company funded its capital requirementsthrough debt financing, both with third party banks and related parties, tenantimprovement monies, equity financing, and cash flows from operations.  The Company does not intend to fund any newrestaurants or incur any major remodeling or refurbishing costs during fiscal2004.

 

Net cash used in operating activities was $1,583,000in the first quarter of 2004, compared to net cash used in operating activitiesof $553,000 in the first quarter of 2003. In 2004, net cash used in operating activities included an aggregate$0.9 million related to payment of 2003 performance and stay bonuses andaccrued vacation for employees terminated in conjunction with the sale of threeof the Company’s then-existing five steakhouses, severance payments related toan employee terminated in conjunction with the sale of the Chart HouseBusiness, and settlement of prior period insurance claims.  In 2003, net cash used in operatingactivities included an aggregate $0.8 million related to payment of 2002bonuses, severance payments related to employees terminated in conjunction withthe sale of the Chart House Business, and settlement of prior period insuranceclaims.

 

Net cash provided by investing activities in the firstquarter of 2004 included net proceeds of $5,594,000 from the sale of three ofthe Company’s then-existing five steakhouses (see table above).  Net cash used in investing activities in thefirst quarter of 2003 included capital expenditures of $11,000.

 

Net cash used in financing activities was $10,000 inthe first quarter of 2004, primarily related to scheduled non-cash reductionsto a capital lease on a restaurant property that the Company has subleased to athird party.  Net cash used in financingactivities was $30,000 in the first quarter of 2003, primarily related toscheduled payments under landlord notes as well as scheduled non-cashreductions to the capital lease on the subleased restaurant property.

 

The Series A Preferred Stock is entitled to dividendsat the rate of 10.0% per annum, based on the original price of $2.25 pershare.  Dividends are payablesemiannually on June 1 and December 1. Dividends paid through June 1, 2002 were in the form of additionalshares of Series A Preferred Stock, in part, because the Company’s CreditAgreement prohibited the payment of cash dividends.  Subsequent to the retirement of amounts owing under the CreditAgreement, the Company began paying these dividends in cash.  The Company expects to satisfy futuredividend obligations in cash.

 

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The Company is liable under various capital andoperating lease agreements, primarily related to restaurant locations.   The Company is also contingently liableunder letters of credit, primarily related to leasing obligations andself-insurance reserves, and guarantees on various third party leasing and debtagreements.  No material changes haveoccurred regarding these commitments and contingencies from the Company’s priorfiscal year ended December 29, 2003.

 

**CRITICAL ACCOUNTING POLICIES**

 

A critical accountingpolicy is one that would materially affect the Company’s operations orfinancial condition, and requires management to make estimates or judgments incertain circumstances.  Set forth belowis a description of those accounting policies which the Company believes aremost critical and could have the greatest impact on its operations or financialcondition.

 

**Impairment of Assets.**  The Company adopted Statement of FinancialAccounting Standards No. 142, “Goodwill and Other Intangible Assets” and FAS144, which require, among other things, that effective January 1, 2002,goodwill resulting from a business combination accounted for as a purchase nolonger be amortized, but be subject to ongoing impairment review.  On an ongoing basis, the Company reviews itscarrying value of restaurant assets and compares them with fair marketvalue.  In determining the fair marketvalue of its assets, management considers several factors requiring theexercise of its business judgment.  Suchbusiness judgment includes developing valuation multiples, such as the ratio oftotal capitalized value to restaurant earnings before interest, taxes,depreciation, and amortization for an industry peer group of publicly tradedcompanies, and applying those multiples to the Company’s historical andprojected operating performance.   Ifmanagement determines that the fair market value of its assets is materiallybelow the current carrying cost of the assets, an impairment charge isrecognized in operating income in the period the impairment is identified.

 

**Cost Capitalization and Depreciation Policies.**  Costs for maintenance, repairs, andpurchases are either expensed as incurred or capitalized and amortized over thecost’s estimated useful life.  Thisrequires management to make business judgments regarding which costs should becapitalized and, if capitalized, the estimated useful life.  Management has established the Company’scost capitalization and depreciation policies based on historical experience inthe restaurant industry, industry guidelines regarding useful lives, andadherence to applicable accounting standards. Maintenance, repairs, and minor purchases are expensed as incurred.  Major purchases of equipment and facilities,and major replacements and improvements, are capitalized.  Depreciation and amortization are recordedfor financial reporting purposes using the straight-line method over theestimated useful lives of the assets. Equipment is depreciated over lives ranging from three to eight years.  Leasehold interests and improvements areamortized over the shorter of the lease term, including planned extensions, orthe asset life, ranging up to 25 years.

 

**Self-Insurance Liability.**  The Company is self-insured through October2002 for its workers’ compensation and general liability insurance programs,and continues to be self-insured for its employee health insuranceprogram.  The Company maintainsstop-loss coverage with third party insurers to limit its total exposure.  The accrued liability associated with theseprograms is based on management’s estimate of the ultimate costs to be incurredto settle known claims and claims incurred, but not reported, as of the balancesheet date.  Our estimated liability isnot discounted and is based on a number of assumptions and factors, includinghistorical trends, actuarial assumptions, and economic conditions.  If actual trends differ from our estimates,our financial results could be impacted.

 

**NEW ACCOUNTING PRONOUNCEMENTS**

 

In December 2003, the FASB issued FASB InterpretationNo. 46 (revised December 2003), “Consolidation of Variable Interest Entities”(“VIEs”) (“FIN 46R”), which addresses how a business enterprise should evaluatewhether it has a controlling financial interest in an entity through meansother than voting rights and accordingly should consolidate the entity.  FIN 46R replaces FASB Interpretation No. 46,Consolidation of Variable Interest Entities, which was issued in January 2003.The Company was required to apply FIN 46R to variable interests in VIEs createdafter December 31, 2003.  The Companycurrently has no contractual relationships or other business relationships witha VIE.

 

FASB Statement No. 150, Accounting for Certain Financial Instrumentswith Characteristics of both Liabilities and Equity, was issued in May2003.  This Statement establishesstandards for the classification and measurement of certain financialinstruments with characteristics of both liabilities and equity.  The Statement also includes requireddisclosures for financial instruments within its scope.  For the Company, the Statement was effectivefor instruments entered into or modified after May 31, 2003 and otherwiseeffective as of January 1, 2004, except for mandatorily redeemable financialinstruments.  The effective date hasbeen deferred indefinitely for certain other types of mandatorily redeemablefinancial instruments.  The adoption ofthis standard did not have a material impact on the consolidated financialstatements.

 

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**SEASONALITY**

 

The Company’s business is seasonal in nature, withrevenues and operating income for the first and fourth quarters greater than inthe second and third quarters as the Company benefits from urban, holiday, andwinter vacation dining which is greater than the benefits associated withdining during leisure travel in the spring and summer quarters.

 

**ITEM 3. QUANTITATIVE AND QUALITATIVEDISCLOSURES ABOUT MARKET RISK.**

 

The Company is exposed to market risk from changes inmarket rates earned on cash equivalents and changes in commodity prices.   The impact on the Company’s results ofoperations of a one-point market rate change on its cash equivalent balance asof March 29, 2004, would not be material. The Company does not use derivative instruments to manage borrowingcosts, reduce exposure to adverse fluctuations in the interest rate, nor fortrading purposes.

 

The Company purchases certain commodities such asbeef, seafood, chicken, and cooking oil. These commodities are generallypurchased based upon purchase agreements or arrangements with vendors.  These purchase agreements or arrangementsmay contain features that fix the commodity price or define the price from anagreed upon formula.  The Company doesnot use financial instruments to hedge commodity prices because these purchasearrangements help control the ultimate cost paid for any commodity pricefluctuations, have no minimum purchase requirements, and are generally shortterm in nature.

 

**ITEM4. CONTROLS AND PROCEDURES**

 

As of March 29,2004, the Company carried out an evaluation, under the supervision and with theparticipation of the Company’s President and Chief Executive Officer and theCompany’s Chief Financial Officer, of the effectiveness of the Company’sdisclosure controls and procedures pursuant to Rule 13a-15 of the SecuritiesExchange Act of 1934, as amended.  Basedupon that evaluation, the Company’s President and Chief Executive Officer andChief Financial Officer concluded that the Company’s disclosure controls andprocedures are effective in timely alerting them to material informationrelating to the Company (including its consolidated subsidiaries) required tobe disclosed by the Company in its periodic Exchange Act reports.  There were no significant changes in the Company’sinternal controls or in other factors that could significantly affect thesecontrols subsequent to the date of the evaluation, including any correctiveactions with regard to significant deficiencies and material weaknesses.

 

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**PART II - OTHER INFORMATION**

 

**ITEM 1.  LEGAL PROCEEDINGS.**

 

On October 1, 2002, the Company filed acomplaint in the Chancery Court for the State of Delaware against the Purchaserand escrow agent Fidelity National Title. This action alleges several breaches by the Purchaser and its parentcompany, Landry’s Restaurant’s, Inc. (“Landry’s”), of its contractualobligations under the asset purchase agreement related to the sale of the ChartHouse Business and under a related escrow agreement.  Aggregate damages sought, without regard to interest or legalfees, were $1.8 million.  The Companysubsequently received $1.6 million through a release of escrowed funds and apayment made by the Purchaser during the fourth quarter of 2002.  The Company continues to seek approximately$0.3 million, representing amounts that the Company believes the Purchaserwrongfully failed to pay under the asset purchase agreement, and relatedinterest, costs, and attorneys’ fees. Landry’s has filed a counterclaim on behalf of the Purchaser, seeking apurchase price adjustment of $0.15 million. See Part I, Item 1, Note 3 “Sale of the Chart House Business.”  The Company is unable to predict the outcomeof this matter.

 

On February 20, 2004, the Company filed inthe Chancery Court for the State of Delaware an additional complaint againstthe Purchaser and Landry’s.  This actionalleges, among other things, additional breaches by both the Purchaser andLandry’s of their obligations related to the sale of the Chart HouseBusiness.  Specifically, the claimdemands that Landry’s perform its obligation to guarantee the full and timelyperformance of all obligations and agreements of the Purchaser (the“Guarantee”).  In November 2003, thePurchaser defaulted on one of the real estate leases (the “Lease”) that itassumed when it acquired the Chart House Business.  Future undiscounted cash payments pursuant to the Lease exceed$30.0 million over a 17 year period. Historically, the Company has been treating the Lease and othersurviving real estate obligations of the Chart House Business as contingentliabilities, as the likelihood of the Company having to perform on thoseobligations is remote in light of the Guarantee.  See Part I, Item 1, Note 6 “Commitments and Contingencies.”  The Company is unable to predict the outcomeof this matter.

 

The Company periodically is a defendant inlitigation incidental to its business activities. While any litigation orinvestigation has an element of uncertainty, the Company believes that theoutcome of any of these matters will not have a material adverse effect on itsfinancial condition or operations.

 

**ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.**

 

None.

 

**ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.**

 

None.

 

**ITEM 4.  SUBMISSION OFMATTERS TO A VOTE OF SECURITY HOLDERS.**

 

None.

 

**ITEM 5.  OTHER INFORMATION.**

 

None.

 

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

 

(a)                                  Exhibits:

 

3.1                                 (1)Restated Certificate of Incorporation of the Company, as amended. (1)

(2) Certificate of Amendment of Restated Certificateof Incorporation of the Company. (2)

(3) Certificate of Amendment of Restated Certificateof Incorporation of Chart House Enterprises, Inc. (4)

3.2                                 Amendedand Restated Bylaws of the Company. (1)

3.3                                 Certificateof Designations of the Series A Preferred Stock. (3)

4.1                                 SpecimenCommon Stock Certificate. (2)

4.2                                 SpecimenSeries A Preferred Stock Certificate. (3)

31.1                           Certificationof the Chief Executive Officer pursuant to Rule 13a-14(a) of the SecuritiesExchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-OxleyAct of 2002.

 

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31.2                           Certificationof the Chief Financial Officer pursuant to Rule 13a-14(a) of the SecuritiesExchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-OxleyAct of 2002.

32.1                           Certificationof the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2                           Certificationof the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuantto Section 906 of the Sarbanes-Oxley Act of 2002.

 

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(1)          Filed as an exhibit tothe Company’s Registration Statement on Form S-1 dated August 27, 1987, oramendments thereto dated October 6, 1987 and October 14, 1987 (Registration No.33-16795).

(2)          Filed as an exhibit tothe Company’s Registration Statement on Form S-1 dated July 20, 1989, oramendment thereto dated August 25, 1989 (Registration No. 33-30089).

(3)          Filed as an exhibit tothe Company’s Registration Statement on Form S-2 dated March 27, 2001, oramendments thereto dated May 15, 2001, May 25, 2001, and May 31, 2001(Registration No. 333-57674).

(4)          Filed as an exhibit tothe Company’s Current Report on Form 10-Q for the quarter ended July 1, 2002,dated August 15, 2002.

 

(b)                                 Reportson Form 8-K.

 

The Company filed a report on Form 8-K on January 21,2004.  Under Item 2, the Companyreported that it had completed its previously announced sale of three of itssteakhouses located in Midtown Manhattan, New York, Reston, Virginia, andWashington, D.C., to McCormick and Schmick Restaurant Corp., a large nationalrestaurant operator.  A press releaseannouncing the completion of the sale was furnished as an exhibit thereto.

 

The Company filed a report on Form 8-K/A on March 22,2004 to amend the Form 8-K filed on January 21, 2004.  Under item 7, the Company provided pro forma financialinformation and furnished such information as an exhibit thereto.

 

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**SIGNATURES**

 

Pursuant to the requirements of the SecuritiesExchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned thereunto duly authorized.

 
|                      | ANGELO AND MAXIE’S,  INC. |
|---------------------------|--------------------------------|
|                      |                           |
|                      |                           |
| Date:  May  13, 2004 | By:                       | /s/ KENNETH R. POSNER |   |
|                      |                           | Kenneth R. Posner |
|                      |                           | President and Chief Executive Officer |
|                      |                           | (principal executive |
|                      |                           |  officer) |
|                      |                           |
| Date:  May  13, 2004 | By:                       | /s/ GREG GROSVENOR |   |
|                      |                           | Greg Grosvenor |
|                      |                           | Chief Financial Officer |
|                      |                           | (principal financial and accounting |
|                      |                           | officer) |
|                           |                                |  |  |  |  |

 

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