895041--3/30/2007--GRILL_CONCEPTS

related topics

{stock, price, operating}

{acquisition, growth, future}

{cost, regulation, environmental}

{cost, operation, labor}

{stock, price, share}

{loss, insurance, financial}

{loan, real, estate}

{personnel, key, retain}

{provision, law, control}

{operation, natural, condition}

{control, financial, internal}

{product, market, service}

{financial, litigation, operation}

Our future growth and expansion are dependent upon our ability to open additional restaurants and operate new restaurants profitably. Our ability to accelerate the pace of our restaurant openings is dependent upon the availability of adequate financing sources on acceptable terms. Our relative small size makes us vulnerable to risks associated with lack of diversification and risks associated with managing and supporting growing operations. Our profitability is subject to risks associated with fluctuations in costs of key ingredients, labor and utilities. Our success is dependent upon our ability to retain the services of key senior management personnel and attract and retain additional key personnel. Our operations are subject to intense competition and changes in consumer preferences. Our business is subject to seasonal fluctuations that may adversely affect our quarterly operating results in select periods. Our California based restaurants have in the past been, and may in the future be, subject to temporary closure due to energy shortages or earthquakes. Our business is subject to extensive government regulations that may adversely affect our existing or planned operations or result in additional costs or potential liabilities. We are subject to pending litigation, and potential liability, regarding application of employment regulations. We may be subject to increased liability resulting from our partial self-insurance of workers compensation claims. We may experience increased costs, worker related impediments and other losses at our Chicago restaurant as a result of our use of union workers. Provisions in our charter and in Delaware law may impede, delay or prevent potential takeovers that might otherwise be beneficial to our stockholders. Identification of material weakness in internal control may adversely affect our financial results. Our stock price is subject to volatility associated with market fluctuations as well as our operating performance and limited trading volume in our stock. Our directors, executive officers and significant shareholders hold a substantial portion of our stock that may lead to conflicts with other shareholders over corporate governance. Conversion of our outstanding convertible securities could substantially dilute common stock prices because the conversion prices of those securities are below our current market price. Our business may be adversely affected by conflicts of interest associated with doing business with affiliates of certain former directors and principal shareholders. Our future leverage could adversely affect our operations.

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895041--3/30/2007--GRILL_CONCEPTS_INC