The National Restaurant Association estimates that the restaurant industry represents approximately 4.0% of the United States’ gross domestic product. The National Restaurant Association forecasts that restaurant industry sales will continue to experience growth, reaching $476 billion in 2005, which would mark the 14th consecutive year of sales growth for the industry and a 4.9% increase over 2004 sales. The National Restaurant Association estimates that sales in the full-service segment of the U.S. restaurant industry grew approximately 5.4% per annum between 2000 and 2004, reaching approximately $158 billion in 2004, and projects that sales at full-service restaurants in the United States will increase approximately 5.0% to approximately $165 billion in 2005.

Technomic, Inc., a national consulting and research firm, forecasts sales at U.S. full-service restaurants to grow at a compounded annual rate of 5.7% from 2004 through 2008, compared to forecasted compounded annual growth of 4.8% for the total U.S. restaurant industry for the same period. According to Technomic, the varied menu category within the full-service restaurant segment of the U.S. restaurant industry is projected to grow at a 6.0% compounded annual growth rate from 2004 through 2008.

Within the consumer food industry, studies show that over the past 50 years there has been a steady shift away from the consumption of “food-at-home” towards the purchase of “food-away-from-home.” According to the National Restaurant Association, “food-away-from-home” currently represents 47% of all food purchases made by consumers and is projected to represent approximately 53% by 2010.

The Company has created a uniform restaurant layout as well as similar interior and exterior design elements in each of its restaurants. The layout of the Company’s restaurants focuses on joined spaces that create multiple distinct dining areas for its guests while also maintaining an open atmosphere that allows its guests to have a panoramic view of the entire restaurant without negatively impacting the specific ambiance or dining occasion they desire.

The Company’s restaurant interiors utilize a combination of warm earth tones, rich mahogany wood finishes, and oversized silver gilded mirrors. The Company showcases its signature 2,000 gallon saltwater aquarium stocked with bright and colorful exotic fish, plants, and coral in each of its restaurants and ensures that it can be seen from both main dining area and bar area. The Company’s exhibition-style kitchens are brightly lit to display its kitchen staff at work.

The exterior of the Company’s restaurants typically employ cultured stone and slate to create a highly visible restaurant that features the Company’s well lit sign. The Company landscapes its restaurants where appropriate and varies the exterior design to coordinate with the surrounding area. The Company uses accent lighting on trees and directional lighting on its buildings to further increase the visual appeal of its restaurants.

The Company provides detailed specifications to suppliers for its food ingredients, products, and supplies. The Company strives to maintain quality and consistency in its restaurants through careful training and supervision of personnel. The Company’s restaurant general managers receive a minimum of six months of training and kitchen managers receive between three to six months training, as required, and all receive an operations manual relating to food and beverage preparation and restaurant operations.

The Company operates seven restaurants in six states. It leases all of its restaurant sites under lease terms that vary by restaurant; however, the Company generally leases space for 10 years and negotiates at least two five-year renewal options.

Cost of sales as a percentage of restaurant sales remained relatively consistent, at 29.1% during the first quarter ended March 31, 2005 and 29.2% during the first quarter ended March 31, 2004.

Depreciation and amortization increased $0.2 million to $0.5 million during the first quarter ended March 31, 2005 from $0.3 million during the first quarter ended March 31, 2004.

Interest expense, net of interest income, increased to $0.2 million during the first quarter ended March 31, 2005 from $47.0 thousand during the first quarter ended March 31, 2004.