1017156--4/5/2006--STEAKHOUSE_PARTNERS

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{stock, price, share}

{acquisition, growth, future}

{stock, price, operating}

{cost, operation, labor}

{control, financial, internal}

{regulation, change, law}

{condition, economic, financial}

{financial, litigation, operation}

{cost, regulation, environmental}

{operation, natural, condition}

{cost, contract, operation}

{debt, indebtedness, cash}

{provision, law, control}

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{gas, price, oil}

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Risk factors that may affect future results and financial condition Our prior bankruptcy could hinder our ability to negotiate effectively with third parties and could adversely affect our operations going forward. If we are unable to obtain additional funds in a timely manner or on acceptable terms or the plan of reorganization is unsuccessful, we may have to curtail or suspend certain or all of our operations, which could adversely affect our financial condition, results of operations and prospects. We have incurred losses from inception and may never generate substantial profits. We will need additional capital for expansion. We may not have sufficient cash reserves to maintain and fund our operations and fund our obligations. If we lose or are unable to obtain key personnel, our ability to effectively operate our business could be hindered. Because fresh start reporting will make future financial statements difficult to compare with our historical financial statements, it may be difficult for investors to measure our financial performance or assess our prospects for growth. Changing consumer preferences and discretionary spending patterns, potential outbreaks of mad cow disease or foot/mouth disease and other factors affecting the availability of beef could force us to modify our restaurants concept and menu and could result in a reduction in our revenues. We face risks associated with changes in general economic conditions that affect consumer spending. Our profitability is dependent in large measure on food and supply costs which are not within our control. Our ability to execute our expansion plans depends on securing suitable locations at favorable prices. We face risks associated with the expansion of our operations. Successful mergers, acquisitions, divestitures and other strategic transactions are important to our future growth and profitability. We depend on key food product distributors. We face commodity price and availability risk. Increases in federal and state statutory minimum wages could increase our expenses, which could adversely affect our results of operations. The failure to enforce and maintain our trademarks and trade names could adversely affect our ability to establish and maintain brand awareness. Because we maintain a small number of restaurants, the negative performance of a single restaurant could have a substantial impact on our operating results. Our operating results may fluctuate significantly due to seasonality and other factors beyond our control. We could face labor shortages, increased labor costs and other adverse effects of varying labor conditions. The restaurant industry is affected by litigation and publicity concerning food quality, health and other issues, which can cause guests to avoid our restaurants and result in liabilities. Compliance with environmental laws may affect our financial condition. We face increased expenditures of time and money associated with compliance with changing regulation of corporate governance and public disclosure. Risks Related To Our Common Stock Since our shares are thinly traded, and trading on the pink sheets may be sporadic because it is not an exchange, stockholders may have difficulty reselling their shares. The price of our common stock may fluctuate significantly. Failure of our common stock to appreciate in value could affect our ability to raise working capital and adversely impact our ability to continue our normal operations. The large number of shares of our common stock eligible for public sale and the fact that a relatively small number of investors hold our publicly traded common stock could cause our stock price to fluctuate. Trading of our stock may be restricted by the SEC s penny stock regulations, which may limit a stockholder s ability to buy and sell our stock. NASD sales practice requirements may also limit a stockholder s ability to buy and sell our stock. Delaware law contains anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable. Ownership of approximately 38% of our outstanding common stock by five stockholders will limit your ability to influence corporate matters. Securities Authorized for Issuance Under Equity Compensation Plans

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1017156--4/5/2006--STEAKHOUSE_PARTNERS_INC