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<TITLE>COSI, INC.</TITLE>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">As filed with the Securities and Exchange
Commission on April&nbsp;17, 2002</FONT></B>
</DIV>

<DIV align="right">
<B><FONT size="2">Registration
No.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B>
</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<P align="center">
<B><FONT size="4">SECURITIES AND EXCHANGE COMMISSION</FONT></B>

<DIV align="center">
<B>Washington, DC 20549</B>
</DIV>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="center">
<B><FONT size="5">Form S-1</FONT></B>

<P align="center">
<B>REGISTRATION STATEMENT</B>

<DIV align="center">
<B>UNDER</B>
</DIV>

<DIV align="center">
<B>THE SECURITIES ACT OF 1933</B>
</DIV>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="center">
<B><FONT size="6">COS&#205;, INC.</FONT></B>

<DIV align="center">
<I><FONT size="2">(Exact name of registrant as specified in its
charter)</FONT></I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="26%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<B><FONT size="2">Delaware</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<B><FONT size="2">5812</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<B><FONT size="2">06-1393745</FONT></B></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<I><FONT size="2">(State or other jurisdiction of</FONT></I></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<I><FONT size="2">(Primary Standard Industrial</FONT></I></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<I><FONT size="2">(I.R.S. Employer</FONT></I></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<I><FONT size="2">incorporation or organization)</FONT></I></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<I><FONT size="2">Classification Code Number)</FONT></I></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<I><FONT size="2">Identification No.)</FONT></I></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">242 West 36th Street</FONT></B>

<DIV align="center">
<B><FONT size="2">New York, New York 10018</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(212)&nbsp;653-1600</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Address, including zip code, and telephone
number, including area code, of registrant&#146;s principal
executive offices)</FONT></I>
</DIV>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="center">
<B><FONT size="2">Andrew M. Stenzler</FONT></B>

<DIV align="center">
<B><FONT size="2">Chairman and Chief Executive Officer</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">242 West 36th Street</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">New York, New York 10018</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(212)&nbsp;653-1600</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Name, address, including zip code, and
telephone number, including area code, of agent for
service)</FONT></I>
</DIV>

<P align="center">
<B><I><FONT size="2">Copies to:</FONT></I></B>

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<TR>
	<TD width="55%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="42%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<B><FONT size="2">William P. Mills, III, Esq.</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<B><FONT size="2">Morton A. Pierce, Esq.</FONT></B></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<B><FONT size="2">Cadwalader, Wickersham &#38; Taft</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<B><FONT size="2">Dewey Ballantine LLP</FONT></B></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<B><FONT size="2">100 Maiden Lane</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<B><FONT size="2">1301 Avenue of the Americas</FONT></B></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<B><FONT size="2">New York, New York 10038</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<B><FONT size="2">New York, New York 10019</FONT></B></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<B><FONT size="2">(212) 504-6000</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<B><FONT size="2">(212) 259-8000</FONT></B></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<B><FONT size="2">(212) 504-6666 (FAX)</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<B><FONT size="2">(212) 259-6333 (FAX)</FONT></B></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Approximate Date of Commencement of Proposed
Sale to the Public</FONT></B><FONT size="2">: As soon as
practicable after this Registration Statement becomes effective.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If any of the securities being registered on this
Form are being offered on a delayed or continuous basis pursuant
to Rule&nbsp;415 under the Securities Act of 1933, check the
following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this Form is filed to register additional
securities for an offering pursuant to Rule&nbsp;462(b) under
the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this Form is a post-effective amendment filed
pursuant to Rule&nbsp;462(c) under the Securities Act of 1933,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this Form is a post-effective amendment filed
pursuant to Rule&nbsp;462(d) under the Securities Act of 1933,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If delivery of the prospectus is expected to be
made pursuant to Rule&nbsp;434 under the Securities Act of 1933,
check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="center">
<B><FONT size="2">CALCULATION OF REGISTRATION FEE</FONT></B>

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<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="17%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD align="center" valign="top">
	<B><FONT size="2">Title of Each Class of<BR>
	Securities to Be Registered and Sold(1)</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<B><FONT size="2">Amount to Be<BR>
	Registered(1)</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<B><FONT size="2">Proposed Maximum<BR>
	Offering Price<BR>
	Per Share</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<B><FONT size="2">Proposed Maximum<BR>
	Aggregate Offering Price(2)</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<B><FONT size="2">Amount of<BR>
	Registration<BR>
	Fee</FONT></B></TD>
</TR>

<TR>
	<TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Common Stock, par value $0.01 per share(3)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">$&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">$60,000,000
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">$5,520
	</FONT></TD>
</TR>

<TR>
	<TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes a maximum
	of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
	that may be purchased by the Underwriters to cover
	over-allotments, if any.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Estimated solely for the purpose of calculating
	the registration fee pursuant to Rule&nbsp;457 under the
	Securities Act of 1933.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes associated rights to purchase a fraction
	of a share of Series&nbsp;D Preferred Stock.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The Registrant hereby amends this Registration
Statement on a date or dates as may be necessary to delay its
effective date until the Registrant shall file a further
amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with
Section&nbsp;8(a) of the Securities Act of 1933, as amended, or
until the Registration Statement shall become effective on a
date as the Commission, acting pursuant to said
Section&nbsp;8(a), may determine.</FONT></B>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>
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<TABLE width="100%" border="1" cellpadding="5"><TR><TD>
<FONT size="2" color="#E8112D">Information contained herein is
subject to completion or amendment. A registration statement
relating to these securities has been filed with the Securities
and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration
statement becomes effective. This prospectus supplement shall
not constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in any
State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such State.</FONT><FONT size="2"> <BR>
</FONT>
</TD></TR></TABLE>

<P align="center">
<B><FONT size="2" color="#E8112D">SUBJECT TO COMPLETION,
DATED &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2002</FONT></B>

<P align="center">
<FONT size="4">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
</FONT>

<P align="center">
<IMG src="y59517y59517l2.gif" alt="(COSI LOGO)">

<P align="center">
<FONT size="4">Common Stock
</FONT>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to this offering, there has been no public
market for our common stock. The initial public offering price
of our common stock is expected to be between
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share. We have applied to list our common stock on The Nasdaq
Stock Market&#146;s National Market under the symbol
&#147;COSI.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The underwriters have an option to purchase a
maximum
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional
shares to cover over-allotments of shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Investing in our common stock involves risks.
See &#147;Risk Factors&#148; on page&nbsp;7.</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="15%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Underwriting</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Price to</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Discounts and</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Proceeds to</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Public</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Commissions</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Cos&#237;</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Per Share
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<BR>
	<FONT size="2">$
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<BR>
	<FONT size="2">$
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<BR>
	<FONT size="2">$
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<BR>
	<FONT size="2">$
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<BR>
	<FONT size="2">$
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<BR>
	<FONT size="2">$
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Delivery of the shares of common stock will be
made on or
about &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved
of these securities or determined if this prospectus is truthful
or complete. Any representation to the contrary is a criminal
offense.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="50%"></TD>
	<TD width="50%"></TD>
</TR>

<TR valign="top">
	<TD align="left"><B><FONT size="4">&nbsp;&nbsp;&nbsp;Credit Suisse First Boston</FONT></B></TD>
	<TD align="right"><B><FONT size="4">Banc of America Securities LLC&nbsp;&nbsp;&nbsp;</FONT></B></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="50%"></TD>
	<TD width="50%"></TD>
</TR>

<TR valign="top">
	<TD align="left"><B><FONT size="4">U.S. Bancorp Piper Jaffray</FONT></B></TD>
	<TD align="right"><B><FONT size="4">William Blair &#38; Company</FONT></B></TD>
</TR>

</TABLE>

<P align="center">
<FONT size="2">The date of this prospectus
is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2002
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Dealer Prospectus Delivery
Obligation:</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Until &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required
to deliver a prospectus. This is in addition to the
dealer&#146;s obligation to deliver a prospectus when acting as
an underwriter and with respect to unsold allotments or
subscriptions.</FONT></B>

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<P align="center">
<IMG src="y59517y59517a1.gif">

<P align="center">


<DIV>&nbsp;</DIV>
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<P align="center">
<IMG src="y59517y59517a2.gif">

<P align="center">


<DIV>&nbsp;</DIV>
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<P align="center">
<IMG src="y59517y59517a3.gif">

<P align="center">


<DIV>&nbsp;</DIV>
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<P align="center">
<IMG src="y59517y59517a4.gif">

<P align="center">


<DIV>&nbsp;</DIV>
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<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000"><FONT size="2">PROSPECTUS SUMMARY</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#001"><FONT size="2">THE OFFERING</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#002"><FONT size="2">SUMMARY FINANCIAL DATA</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#003"><FONT size="2">RISK FACTORS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#004"><FONT size="2">FORWARD-LOOKING STATEMENTS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#005"><FONT size="2">USE OF PROCEEDS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#006"><FONT size="2">DIVIDEND POLICY</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#007"><FONT size="2">CAPITALIZATION</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#008"><FONT size="2">DILUTION</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#009"><FONT size="2">SELECTED FINANCIAL DATA</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#010"><FONT size="2">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#011"><FONT size="2">BUSINESS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#012"><FONT size="2">MANAGEMENT</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#013"><FONT size="2">PRINCIPAL SHAREHOLDERS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#014"><FONT size="2">RELATED PARTY TRANSACTIONS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#015"><FONT size="2">DESCRIPTION OF CAPITAL STOCK</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#016"><FONT size="2">CERTAIN U.S. FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#017"><FONT size="2">SHARES ELIGIBLE FOR FUTURE SALE</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#018"><FONT size="2">UNDERWRITING</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#019"><FONT size="2">NOTICE TO CANADIAN RESIDENTS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#020"><FONT size="2">PRICING OF THIS OFFERING</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#021"><FONT size="2">LEGAL MATTERS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#022"><FONT size="2">EXPERTS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#023"><FONT size="2">WHERE YOU CAN FIND MORE INFORMATION</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#024"><FONT size="2">REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#025"><FONT size="2">REPORT OF INDEPENDENT AUDITORS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#026"><FONT size="2">COSI, INC. CONSOLIDATED BALANCE SHEETS</FONT></A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#027"><FONT size="2">COSI, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#028"><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#029"><FONT size="2">January 3, 2000, January 1, 2001 and December 31, 2001</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#030"><FONT size="2">SIGNATURES</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex2-1.txt">MERGER AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex3-1.txt">AMENDED AND RESTATED CERTIFICATE OF INCORPORATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex3-2.txt">AMENDED AND RESTATED BY-LAWS OF COSI INC.</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex4-2.txt">FORM OF RIGHTS AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex4-3.txt">AMENDED AND RESTATED REGISTRATION AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex10-1.txt">AMENDED AND RESTATED STOCK INCENTIVE PLAN</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex10-2.txt">EMPLOYEE STOCK PURCHASE PLAN</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex10-3.txt">NON EMPLOYEE DIRECTOR STOCK PURCHASE PLAN</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex10-4.txt">DEFERRED STOCK PLAN</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex10-5_1.txt">EMPLOYMENT AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex10-5_2.txt">EMPLOYMENT AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex10-5_3.txt">EMPLOYMENT AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex10-5_4.txt">EMPLOYMENT AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex10-5_5.txt">EMPLOYMENT AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex21-1.txt">SUBSIDIARIES OF COSI INC.</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex23-1_2.txt">CONSENT OF ARTHUR ANDERSEN LLP</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex23-1_3.txt">CONSENT OF ERNST AND YOUNG LLP</A></TD></TR>
<TR><TD colspan="9"><A HREF="y59517ex99-1.txt">LETTER OF REGISTRANT</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="center">
<B><FONT size="2">TABLE OF CONTENTS</FONT></B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="90%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">PROSPECTUS SUMMARY
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">COS&#205;, INC.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">THE OFFERING
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">SUMMARY FINANCIAL DATA
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">RISK FACTORS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">FORWARD-LOOKING STATEMENTS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">USE OF PROCEEDS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DIVIDEND POLICY
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">CAPITALIZATION
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DILUTION
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">SELECTED FINANCIAL DATA
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF
	FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">BUSINESS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">MANAGEMENT
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">PRINCIPAL SHAREHOLDERS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">RELATED PARTY TRANSACTIONS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">54</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DESCRIPTION OF CAPITAL STOCK
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">CERTAIN U.S. FEDERAL INCOME AND ESTATE TAX
	CONSIDERATIONS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">61</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">SHARES ELIGIBLE FOR FUTURE SALE
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">63</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">UNDERWRITING
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">64</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">NOTICE TO CANADIAN RESIDENTS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">PRICING OF THIS OFFERING
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">68</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">LEGAL MATTERS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">68</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">EXPERTS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">68</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">WHERE YOU CAN FIND MORE INFORMATION
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">68</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">You should rely only on the information
contained in this document. We have not authorized anyone to
provide you with information that is different. This document
may only be used where it is legal to sell these securities. The
information in this document may only be accurate as of the date
of this document.</FONT></B>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "<FONT size="2">PROSPECTUS SUMMARY</FONT>" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="center">
<B><FONT size="2">PROSPECTUS SUMMARY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">This summary contains basic information about
us and this offering. Because it is a summary, it does not
contain all the information that you should consider before
investing. You should read the entire prospectus carefully,
including the section entitled &#147;Risk Factors&#148; and our
consolidated financial statements and the accompanying notes
included elsewhere in this prospectus.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Except as otherwise indicated or required by
the context, references to &#147;we,&#148; &#147;our,&#148;
&#147;us,&#148; &#147;Cos&#237;&#148; or &#147;the company&#148;
refer to Cos&#237;, Inc. and its subsidiaries and predecessors.
&#147;Cos&#237;&#148; (printed in italics) refers solely to the
Cos&#237; restaurant operating format, and not the Cos&#237;
Downtown restaurant operating format.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Our fiscal year ends on the Monday closest to
December&nbsp;31. Fiscal years 1999, 2000 and 2001 ended on
January&nbsp;3, 2000, January&nbsp;1, 2001 and December&nbsp;31,
2001, respectively. Fiscal year 1999 contained 53&nbsp;weeks and
fiscal years 2000 and 2001 each contained
52&nbsp;weeks.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Except as otherwise indicated or required by
the context, all information in this prospectus assumes
(i)&nbsp;no exercise of outstanding options to purchase
6,058,042 shares of common stock issued under the Cos&#237;,
Inc. Stock Incentive Plan, Cos&#237; Sandwich Bar, Inc.
Incentive Stock Option Plan and our Non-Employee Director Stock
Option Plan, of which 2,932,891 were exercisable as of
April&nbsp;1, 2002 at a weighted average exercise price of
$5.18; (ii)&nbsp;no exercise of the underwriters&#146;
over-allotment option to purchase up to &nbsp;additional shares
of our common stock; (iii)&nbsp;exercise of all outstanding
warrants to purchase a total of 304,591 shares of our common
stock, 256,057 of which have an exercise price of $.01 per
share, 44,115 of which have an exercise price of $8.50 per
share, and 4,419 of which have an exercise price of $9.50 per
share; and (iv)&nbsp;the conversion of all outstanding shares of
our Series&nbsp;A and Series&nbsp;C preferred stock into
11,318,567 shares of our common stock. All outstanding warrants
and shares of our preferred stock will be exercised or converted
immediately upon consummation of this offering.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">As you read this prospectus, you should also
note the following: this prospectus contains various references
to industry market data and certain industry forecasts. The
industry market data and industry forecasts were obtained from
publicly available information and industry publications.
Industry publications generally state that the information
contained therein has been obtained from sources believed to be
reliable, but that the accuracy and completeness of that
information is not guaranteed. Similarly, industry forecasts,
while we believe them to be accurate, have not been
independently verified by us and we do not make any
representation as to the accuracy of that information.</FONT></I>

<P align="center">
<B><FONT size="2">COS&#205;, INC.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We own and operate 66 fast casual restaurants in
11 states and the District of Columbia. <I>Cos&#237;
</I>restaurants are all-day caf&#233;s that feature signature
bread and coffee products in an environment we adjust
appropriately throughout the day. <I>Cos&#237; </I>restaurants
offer breakfast, lunch, afternoon coffee, dinner, and dessert
menus full of creative, cravable foods and beverages. From
Cos&#237; <I>Squagels&#174;</I> (square bagels made from
Cos&#237; bread) to our award-winning sandwiches and pizzas,
Cos&#237; has developed featured foods that are built around our
secret, generations-old recipe for crackly crust flatbread.
These products are freshly baked in front of our customers
throughout the day in open flame stone hearth ovens prominently
located in each of our restaurants. Our coffees are freshly
brewed and expertly prepared by our baristas and bartenders. Our
coffee beverages range from simple Cos&#237; brews and
traditional lattes to our innovative Double Oh Arctic Mochas and
specialty coffee cocktails, featuring the <I>Mocha
Kiss</I>&#174;. We offer friendly and attentive service in a
warm and inclusive atmosphere. Our vision is to become
America&#146;s favorite caf&#233; by giving every customer
something to look forward to in their day.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We operate our restaurants in two formats:
<I>Cos&#237; </I>and <I>Cos&#237; Downtown. </I>All of our
restaurants offer breakfast, lunch and afternoon coffee in a
counter service format. After 5&nbsp;p.m., our <I>Cos&#237;
</I>restaurants add table service and offer dinner and dessert
in a casual dining format. All of our restaurants are designed
to be welcoming and comfortable, featuring oversized sofas,
chairs and tables, and faux painted walls. The atmosphere of
Cos&#237; is appropriately managed for each daypart by changing
the music, both style and volume,
</FONT>

<P align="center"><FONT size="2">1
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">and lighting throughout the day. Our restaurants
are located in a wide range of markets and trade areas,
including business districts and residential communities in both
urban and suburban locations.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cos&#237; was created through the
October&nbsp;1999 merger of two restaurant concepts, Cos&#237;
Sandwich Bar, Inc. and Xando, Incorporated. Each company served
a similar customer, but focused on different parts of the day.
Over the last two years during the development of our concept,
we added Cos&#237; Sandwich Bar products to the Xando Coffee and
Bar five daypart platform. We believe we have created a
restaurant concept that satisfies our customers&#146; needs from
<I>Wake Up Call to Last Call&#174;</I>. In 2001, Restaurant
Hospitality Magazine selected Cos&#237; as one of America&#146;s
Premier Concepts of Tomorrow.
</FONT>

<P align="left">
<B><FONT size="2">Concept and Business Strategy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our objective is to build a nationwide system of
distinctive restaurants that generate attractive unit economics
by appealing to a broad range of customers across five dayparts:
breakfast, lunch, afternoon coffee, dinner and dessert. Inherent
in this objective is our ability to leverage our core
competencies in both bread and coffee by offering creative,
cravable products during each daypart, reinforcing the Cos&#237;
brand and creating a loyal customer base. To achieve this
objective, we intend to utilize the following strategies:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Build Awareness of the Cos&#237;
Brand.</FONT></I><FONT size="2"> We believe that the Cos&#237;
name has achieved substantial brand equity among our customers
and has become well known within our markets for our signature
bread and coffee products, most notably, our award winning
crackly crust flatbread, the foundation of every Cos&#237;
sandwich.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Provide a Menu Offering Full of Creative,
Cravable Foods and Beverages.</FONT></I><FONT size="2"> We offer
proprietary bread and coffee products for all five dayparts. All
of our signature bread products are made from scratch on
premises in front of the customer and baked fresh in our open
flame stone hearth oven all day. We believe that our extensive
caf&#233; menu of cravable proprietary products distinguishes us
from our competition.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Capitalize on Proven Multiple Daypart Model.
</FONT></I><FONT size="2">By operating in multiple dayparts, we
are able to maximize revenues and leverage both development and
operating costs. Cos&#237; selects sites that experience strong
traffic in at least three of five dayparts. Additionally, as we
continue to enhance our product offering in each daypart, our
new restaurant average unit volumes have significantly increased.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Operate in Multiple Real Estate Paradigms.
</FONT></I><FONT size="2">Our restaurants are located in a wide
range of markets and trade areas, which include business
districts and residential communities in both urban and suburban
locations. We believe that this demonstrates the flexibility of
our restaurant designs and the appeal of our concept to a wide
variety of consumers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Provide a High Level of Customer Service.
</FONT></I><FONT size="2">Cos&#237; recognizes that a key to a
positive customer experience is the customer&#146;s interaction
with our employees, or partners. We dedicate significant time
and resources to our partners&#146; experience through our
&#147;Life of the Partner&#148; program to focus on every aspect
of a partner&#146;s development with us, from sourcing,
selection and hiring to orientation, training, continuing
education, performance evaluation and promotion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Leverage our
Infrastructure.</FONT></I><FONT size="2"> Cos&#237; has a deep
management infrastructure led by seasoned professionals from
both the retail and the restaurant industries. We believe that
this management team, combined with our founder driven culture,
provides Cos&#237; with the right chemistry and experience to
execute our growth plans. In addition, we have made a
substantial investment in an application service provider model,
for the management of our information systems, which allows us
to maintain advanced technology without the need to continually
re-invest in infrastructure and personnel.
</FONT>

<P align="left">
<B><FONT size="2">Growth</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that there are significant
opportunities to expand our concept and brand on a nationwide
basis. In addition to new restaurant growth, we believe that we
will increase average unit volumes through the launch of new
menu segments, product innovations and catering sales.
</FONT>

<P align="center"><FONT size="2">2
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">New Unit Growth. </FONT></I><FONT size="2">The
addition of new restaurants has been our primary source of
growth historically and we anticipate that it will be the
primary source of growth in the near term. We believe that we
have adopted a manageable growth strategy and intend to develop
many of our new restaurants in our existing markets, and
selectively enter new markets, to gain operational efficiencies,
enhance convenience for our customers and increase brand
awareness. Cos&#237; does not utilize a commissary system and
thus our expansion is not restricted by geographic proximity to
commissary kitchens. Our site selection criteria is flexible and
allows us to adapt to a wide variety of real estate paradigms
including central business districts, urban and suburban
residential locations and suburban shopping centers. We plan to
open approximately 30 to 35&nbsp;new restaurants during fiscal
2002, and approximately 53 to 59&nbsp;new restaurants in fiscal
2003. We expect the majority of our restaurants to be opened in
the future will be in the <I>Cos&#237; </I>all-day format.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Increased Average Unit Volumes.
</FONT></I><FONT size="2">We plan to increase sales at our
restaurants by expanding our food and beverage selections,
leveraging each of the five dayparts: breakfast, lunch,
afternoon coffee, dinner and dessert. We maintain a pipeline of
new menu segments and product launches which are systematically
introduced in order to keep our product offerings relevant to
consumers in each daypart, drive customer frequency and increase
our average check. Additionally, Cos&#237; catering provides us
with an additional channel for growth outside of the four walls
of the restaurant. With the implementation of this strategy, our
new restaurant average unit volumes have significantly
increased. During 2001, despite the negative impact of
September&nbsp;11th across all of our restaurants, average sales
for restaurants opened from 1994 to 1999 were approximately
$1,040,000 and average sales for restaurants opened in 2000 were
approximately $1,400,000.
</FONT>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our principal executive offices are located at
242&nbsp;West 36th Street, New York, New York 10018 and our
telephone number is (212)&nbsp;653-1600. Our web site address is
http://www.getcosi.com. Information on our web site is not a
part of this prospectus.
</FONT>

<P align="center"><FONT size="2">3
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "<FONT size="2">THE OFFERING</FONT>" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="center">
<B><FONT size="2">THE OFFERING</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="28%"></TD>
	<TD width="1%"></TD>
	<TD width="71%"></TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Common stock offered:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">By Cos&#237;, Inc.
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Common stock to be outstanding after the offering
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2"> <BR>
	 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Use of proceeds
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">We will receive approximately
	$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million in net proceeds in
	this offering. We intend to use the proceeds for:
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">&#149;&nbsp;the development of new restaurants;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">&#149;&nbsp;prepayment of our outstanding 13%
	senior subordinated notes; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">&#149;&nbsp;general corporate purposes, including
	working capital needs.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">See &#147;Use of Proceeds&#148; for more
	information regarding our planned use of the net proceeds from
	this offering.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Dividend policy
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">We do not anticipate paying any cash dividends in
	the foreseeable future.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Proposed Nasdaq National Market symbol
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2"> <BR>
	 COSI
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The number of outstanding shares shown above is
based on shares outstanding as of April&nbsp;1, 2002 and
excludes 6,058,042 shares of common stock issuable upon exercise
of stock options outstanding under the Cos&#237;, Inc. Stock
Incentive Plan, Cos&#237; Sandwich Bar, Inc. Incentive Stock
Option Plan and our Non-Employee Director Stock Option Plan as
of April&nbsp;1, 2002, of which 2,932,891 were exercisable.
</FONT>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We own or have rights to various trademarks and
trade names used in our business. These include
<I>Cos&#237;&#174;</I>, <I>Cos&#237;
Downtown</I><SUP>TM</SUP><I>, Squagels&#174;, Mocha Kiss&#174;,
Wake Up Call to Last Call&#174;, Cos&#237;
Corners</I><SUP>TM</SUP><I>, Warm n&#146; Cos&#237;
Melts</I><SUP>TM</SUP><I>, Screamers</I>&#174;<I>,
Cos&#237;-dillas</I><SUP>TM</SUP>, and our sun and moon
logo&#174;. This prospectus also includes trademarks, service
marks and trade names owned by other companies.
</FONT>

<P align="center"><FONT size="2">4
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "<FONT size="2">SUMMARY FINANCIAL DATA</FONT>" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center">
<B><FONT size="2">SUMMARY FINANCIAL DATA</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows our summary historical
financial data as, at and for the periods indicated. You should
read this Summary Financial Data together with &#147;<I>Use of
Proceeds</I>&#148;, &#147;<I>Management&#146;s Discussion and
Analysis of Financial Condition and Results of
Operations</I>&#148;, our consolidated financial statements and
accompanying notes and the other financial data included
elsewhere in this prospectus<I>.</I>
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="38%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">April 2,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">April 1,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center"><B><FONT size="1">(Audited)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">(in thousands, except per share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Statement of Operations Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net sales
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">37,262.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">51,222.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">70,184.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,855.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,052.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Costs and expenses:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cost of goods sold
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,838.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,844.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,791.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,205.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,853.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restaurant operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,236.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,172.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">45,114.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,976.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,127.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total costs of sales
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">33,074.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46,016.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">63,906.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,181.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,980.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="22"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restaurant operating margin (a)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,187.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,205.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,277.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,674.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,071.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">General and administrative expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,024.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,774.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,361.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,735.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,620.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Depreciation and amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,155.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,158.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,690.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,021.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,210.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restaurant pre-opening expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">661.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,409.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,438.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">253.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">111.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for losses on asset impairments and
	disposals
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,208.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,847.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,486.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">90.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Merger costs and related expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,958.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Lease termination costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,437.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">477.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,410.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">578.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock compensation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,512.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34,770.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23,460.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(35,109.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,005.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,870.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest income
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">478.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">441.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">340.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(206.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(210.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(654.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(98.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(387.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total interest income (expense),&nbsp;net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">272.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">230.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(313.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(37.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(357.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34,498.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23,230.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(35,423.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,042.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,228.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Preferred stock dividends
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,561.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,219.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,678.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,312.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,960.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss) attributable to common
	stockholders
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(37,059.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(27,449.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(42,101.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,355.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,188.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss) per common share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic and diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5.02</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.48</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5.34</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.81</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.78</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Shares used in computing net income (loss) per
	common share (in thousands)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic and diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,376</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,882</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,888</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,882</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,923</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="22"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Pro Forma Data
	</FONT></B><FONT size="2">(b)<B>:</B>
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss) attributable to common
	stockholders
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(35,423.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,228.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss) per common share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic and diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.12</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.23</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Shares used in computing net income per common
	share (in thousands)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic and diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,676</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,558</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">5
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="41%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">April 2,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">April 1,</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center"><B><FONT size="1">(Audited)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">(in thousands, except per share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Selected Statement of Cash Flow
	Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash flow from operating activities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,539.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,539.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(12,299.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,925.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,349.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash flow from investing activities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(14,742.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(18,347.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(20,350.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,418.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,725.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash flow from financing activities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,773.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,964.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,056.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,811.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,173.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="21"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Selected Operating Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restaurants open at end of period
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">As of April&nbsp;1, 2002</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">As Adjusted</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Selected Balance Sheet Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash and cash equivalents
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">$12,568.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">44,987.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total debt and capital lease obligations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,087.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Mandatorily redeemable preferred stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">113,532.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total common stockholders&#146; equity (deficit)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(95,185.5)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(a)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Restaurant operating margin represents sales less
	cost of goods sold and restaurant operating expenses.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(b)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Reflects the conversion of all outstanding
	Series&nbsp;A and Series&nbsp;C preferred stock and exercise of
	all outstanding warrants upon consummation of this offering.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">6
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "<FONT size="2">RISK FACTORS</FONT>" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center">
<B><FONT size="2">RISK FACTORS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">You should carefully consider the following
risks, as well as the other information contained in this
prospectus, before investing in shares of our common stock. If
any of the following risks actually occur, our business could be
harmed. In that case, the trading price of our common stock
could decline, and you might lose all or part of your
investment. You should refer to the information set forth in
this prospectus and our financial statements and the related
notes included elsewhere in this prospectus.</FONT></I>

<P align="left">
<B><FONT size="2">Risks Particular to Cos&#237;</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">If we are unable to achieve our rapid
	growth strategy our business could be materially adversely
	affected.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are planning a rapid growth strategy which
will depend on our ability to open new restaurants on a timely
and profitable basis. We have experienced delays in restaurant
openings from time to time, we may experience delays in the
future and we cannot assure you that we will be able to achieve
our expansion goals. Any inability to implement our growth
strategy could materially adversely affect our business,
financial condition, operating results or cash flows. Our
ability to expand successfully will depend on a number of
factors, some of which are beyond our control, including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">identification and availability of suitable
	restaurant sites;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">competition for restaurant sites;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">negotiation of favorable leases;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">management of construction and development costs
	of new restaurants;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">securing required governmental approvals and
	permits;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">recruitment of qualified operating personnel;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">competition in new markets; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">general economic conditions.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, we contemplate entering new markets
in which we have no operating experience. These new markets may
have different demographic characteristics, competitive
conditions, consumer tastes and discretionary spending patterns
than our existing markets, which may cause our new restaurants
to be less successful in these new markets than in our existing
markets.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Any inability to manage our growth
	effectively could materially adversely affect our operating
	results.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Failure to manage our growth effectively could
harm our business. We have grown significantly since our
inception and intend to grow substantially in the future. We
have increased the number of our restaurants from
36&nbsp;restaurants as of December&nbsp;31, 1999 to 66
restaurants currently. Our existing restaurant management
systems, financial and management controls and information
systems may not be adequate to support our planned expansion.
Our ability to manage our growth effectively will require us to
continue to enhance these systems, procedures and controls and
to locate, hire, train and retain operating personnel. We cannot
assure you that we will be able to respond on a timely basis to
all of the changing demands that our planned expansion will
impose on management and on our existing infrastructure. If we
are unable to manage our growth effectively, our business and
operating results could be materially adversely impacted.
</FONT>

<P align="center"><FONT size="2">7
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">You should not rely on past increases in
	our average unit volumes as an indication of our future results
	of operations because they may fluctuate
	significantly.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A number of factors have historically affected,
and will continue to affect, our average sales, including, among
other factors:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">introduction of new menu items;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">unusually strong initial sales performance by new
	restaurants;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">competition;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">general regional and national economic conditions;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">consumer trends; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">our ability to execute our business strategy
	effectively.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is not reasonable to expect our average unit
volumes to increase at rates achieved over the past several
years. Changes in our average sales results could cause the
price of our common stock to fluctuate substantially.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">We have a limited operating history and we
	may be unable to achieve profitability.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The first Xando Coffee and Bar was opened in
October&nbsp;1994 and the first Cos&#237; Sandwich Bar was
opened in February&nbsp;1996. As of April&nbsp;1, 2002, we are
operating 66 restaurants, 16 of which have been open for less
than one year. Accordingly, you have limited information with
which to evaluate our business and prospects. As a result,
forecasts of our future revenues, expenses and operating results
may not be as accurate as they would be if we had a longer
history of operations and of combined operations. Since we were
formed, we have incurred net losses of approximately
$104&nbsp;million through the end of fiscal 2001, primarily due
to new restaurant opening expenses, impairment charges, the cost
of our merger in 1999 and the costs of hiring senior management
to develop and implement our expansion strategy. We intend to
continue to expend significant financial and management
resources on the development of additional restaurants. We
cannot predict whether we will be able to achieve or sustain
revenue growth, profitability or positive cash flow in the
future. See <I>&#147;Management&#146;s Discussion and Analysis
of Financial Conditions and Results of Operations&#148;</I> and
the financial statements included in this prospectus for
information on the history of our losses.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Our restaurants are currently concentrated
	in the Northeastern and Mid-Atlantic regions of the United
	States, particularly in the New York City area. Accordingly, we
	are highly vulnerable to negative occurrences in these
	regions.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We currently operate 55 restaurants in
Northeastern and Mid-Atlantic states, of which 26 are located in
the New York City area, 16 of which are located in New York
Central Business Districts. As a result, we are particularly
susceptible to adverse trends and economic conditions in these
areas. In addition, given our geographic concentration, negative
publicity regarding any of our restaurants could have a material
adverse effect on our business and operations, as could other
regional occurrences impacting the local economies in these
markets.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Our operations depend on governmental
	licenses and we may face liability under &#147;dram shop&#148;
	statutes.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are subject to extensive federal, state and
local government regulations, including regulations relating to
alcoholic beverage control, the preparation and sale of food,
public health and safety sanitation, building, zoning and fire
codes. Our business depends on obtaining and maintaining
required food service and/or liquor licenses for each of our
restaurants. If we fail to hold all necessary licenses, we may
be forced to delay or cancel new restaurant openings and close
or reduce operations at existing locations. In addition, our
sale of alcoholic beverages subjects us to &#147;dram shop&#148;
statutes in some states. These statutes allow an injured person
to recover damages from an establishment that served alcoholic
beverages to an intoxicated person. Although we take significant
precautions to ensure that all employees are trained in the
responsible service of
</FONT>

<P align="center"><FONT size="2">8
</FONT>

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<DIV align="left">
<FONT size="2">alcohol and maintain insurance policies in
accordance with all state regulations regarding the sale of
alcoholic beverages, the misuse of alcoholic beverages by
customers may create considerable risks for us. If we are the
subject of a judgment substantially in excess of our insurance
coverage, or if we fail to maintain our insurance coverage, our
business, financial condition, operating results or cash flows
could be materially and adversely affected. See
<I>&#147;Business&nbsp;&#151; Government Regulation&#148;</I>
for a discussion of the regulations with which we must comply.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Our restaurant expansion strategy focuses
	primarily on further penetrating existing markets. This strategy
	can cause sales in some of our existing restaurants to decline,
	which could result in restaurant closures.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In accordance with our expansion strategy, we
intend to open new restaurants primarily in our existing
markets. Since we typically draw customers from a relatively
small radius around each of our restaurants, the sales
performance and customer counts for restaurants near the area in
which a new restaurant opens may decline due to cannibalization,
which could result in restaurant closures.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Our failure or inability to enforce our
	trademarks or other proprietary rights could adversely affect
	our competitive position or the value of our
	brand.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We own certain common law trademark rights and a
number of federal and international trademark and service mark
registrations, and proprietary rights to certain of our core
menu offerings. We believe that our trademarks and other
proprietary rights are important to our success and our
competitive position. We, therefore, devote appropriate
resources to the protection of our trademarks and proprietary
rights. The protective actions that we take, however, may not be
enough to prevent unauthorized usage or imitation by others,
which might cause us to incur significant litigation costs and
could harm our image or our brand or competitive position.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To date, we have not been notified that our
trademarks or menu offerings infringe the proprietary rights of
third parties, but we cannot assure you that third parties will
not claim infringement by us. Any such claim, whether or not it
has merit, could be time-consuming, result in costly litigation,
cause product delays or require us to enter into royalty or
licensing agreements. As a result, any such claim could have a
material adverse effect on our business, results of operations
and financial condition.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Our quarterly results may fluctuate and
	could fall below expectations of securities analysts and
	investors due to seasonality and other factors, resulting in a
	decline in our stock price.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our quarterly and yearly results have varied in
the past, and we believe that our quarterly operating results
will vary in the future. Factors such as seasonality, inclement
weather, and unanticipated increases in labor, commodity,
energy, insurance or other operating costs may cause our
quarterly results to fluctuate. For this reason, you should not
rely upon our quarterly operating results as indications of
future performance.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may need
additional capital in the future and it may not be available on
acceptable terms.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We do not presently have a credit facility
available for general purposes. The development of our business
may require significant additional capital in the future to,
among other things, fund our operations, expand the range of
services we offer and finance future acquisitions and
investments. There is no assurance that financing will be
available on terms favorable to us, or at all. Our ability to
obtain additional financing will be subject to a number of
factors, including market conditions, our operating performance
and investor sentiment. These factors may make the timing,
amount, terms and conditions or additional financings
unattractive to us. If we are unable to raise additional
capital, our growth could be impeded.
</FONT>

<P align="center"><FONT size="2">9
</FONT>

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<P align="left">
<B><FONT size="2">Risks Relating to the Food Service
Industry</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business
is affected by changes in consumer preferences and discretionary
spending.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our success depends, in part, upon the popularity
of our food products and our ability to develop new menu items
that appeal to consumers. Shifts in consumer preferences away
from our restaurants or cuisine, our inability to develop new
menu items that appeal to consumers, or changes in our menu that
eliminate items popular with some consumers could harm our
business. Also, our success depends to a significant extent on
discretionary consumer spending, which is influenced by general
economic conditions and the availability of discretionary
income. Accordingly, we may experience declines in sales during
economic downturns or during periods of uncertainty like that
which followed the terrorist attacks on the United States and
the possibility of further terrorist attacks. Any material
decline in the amount of discretionary spending could have a
material adverse effect on our sales, results of operations,
business and financial condition.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our success
depends on our ability to compete with many food service
businesses.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The restaurant industry is intensely competitive
and we compete with many well-established food service companies
on the basis of taste, quality and price of product offered,
customer service, atmosphere, location and overall guest
experience. We compete with other sandwich retailers, specialty
coffee retailers, bagel shops, fast-food restaurants,
delicatessens, caf&#233;s, bars, take-out food service
companies, supermarkets and convenience stores. Our competitors
change with each of the five dayparts (breakfast, lunch,
afternoon coffee, dinner and dessert), ranging from coffee bars
and bakery cafes to casual dining chains. Aggressive pricing by
our competitors or the entrance of new competitors into our
markets could reduce our sales and profit margins.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Many of our competitors or potential competitors
have substantially greater financial and other resources than we
do which may allow them to react to changes in pricing,
marketing and the quick service restaurant industry better than
we can. As our competitors expand their operations, we expect
competition to intensify. We also compete with other employers
in our markets for hourly workers and may be subject to higher
labor costs.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fluctuations
in coffee prices could adversely affect our operating
results.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The price of coffee, one of our main products,
can be highly volatile. Although most coffee trades on the
commodity markets, coffee of the quality we seek tends to trade
on a negotiated basis at a substantial premium above commodity
coffee pricing, depending on supply and demand at the time of
the purchase. Supplies and prices of green coffee can be
affected by a variety of factors, such as weather, politics and
economics in the producing countries. Two organizations, the
Association of Coffee Producing Countries and the International
Coffee Organization, have sought with mixed success to
coordinate production and pricing of coffee among certain
countries and to maintain pricing quotas among coffee producers.
An increase in pricing of specialty coffees could have a
significant adverse effect on our profitability. To mitigate the
risks of increasing coffee prices and to allow greater
predictability in coffee pricing, we typically enter into fixed
price purchase commitments for a portion of our green coffee
requirements. We cannot assure you that these activities will be
successful or that they will not result in our paying
substantially more for our coffee supply than we would have been
required to pay absent such activities.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in
food and supply costs could adversely affect our results of
operations.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our profitability depends in part on our ability
to anticipate and react to changes in food and supply costs. We
rely on a single primary distributor of our food and paper
goods. Although we believe that alternative distribution sources
are available, any increase in distribution prices or failure by
our distributor to perform could adversely affect our operating
results. In addition, we are susceptible to increases in food
costs as a result of factors beyond our control, such as weather
conditions and government regulations. Failure to anticipate and
adjust our purchasing practices to these changes could
negatively impact our business.
</FONT>

<P align="center"><FONT size="2">10
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">The food service industry is affected by
	litigation and publicity concerning food quality, health and
	other issues, which can cause customers to avoid our products
	and result in liabilities.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Food service businesses can be adversely affected
by litigation and complaints from customers or government
authorities resulting from food quality, illness, injury or
other health concerns or operating issues stemming from one
restaurant or a limited number of restaurants. Adverse publicity
about these allegations may negatively affect us, regardless of
whether the allegations are true, by discouraging customers from
buying our products. We could also incur significant liabilities
if a lawsuit or claim results in a decision against us or
litigation costs regardless of the result.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business
could be adversely affected by increased labor costs or labor
shortages.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Labor is a primary component in the cost of
operating our business. We devote significant resources to
recruiting and training our managers and hourly employees.
Increased labor costs, due to competition, increased minimum
wage or employee benefits costs or otherwise, would adversely
impact our operating expenses. In addition, our success depends
on our ability to attract, motivate and retain qualified
employees, including restaurant managers and staff, to keep pace
with our growth strategy. If we are unable to do so, our results
of operations may be adversely affected.
</FONT>

<P align="left">
<B><FONT size="2">Risks Relating to the Offering</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
common stock has not traded publicly, and the market price of
our common stock may decline after this offering.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to this offering, there has not been a
public market for our common stock. The initial public offering
price of our common stock will be established by negotiations
among us and the underwriters. See &#147;<I>Pricing of this
Offering</I>&#148; for a discussion of the factors to be
considered in determining the initial public offering price. We
cannot assure you that an active market will develop or be
sustained after this offering or that the market price of our
common stock will not decline below the initial public offering
price. In addition, the stock market in recent periods has
experienced and continues to experience significant price and
volume fluctuations, which have affected the market price of the
stock of many companies and which have often been unrelated or
disproportionate to the operating performance of these
companies. These fluctuations, as well as a shortfall in sales
or earnings compared to securities analysts&#146; expectations,
changes in analysts&#146; recommendations or projections or
general economic and market conditions, may adversely affect the
market price of our common stock.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
will experience an immediate and substantial dilution if you
purchase common stock in this offering.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The initial public offering price is
substantially higher than the net tangible book value per share
of the outstanding common stock immediately after this offering.
Any common stock you purchase in this offering will have a
post-offering net tangible book value per share of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;less
than the initial public offering price, assuming an initial
public offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share, which is the mid-point of the range shown on the cover
page of this prospectus. Future issuances of our common stock,
including issuances in connection with stock option exercises,
could cause further dilution.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future
sales of our common stock may cause our stock price to
decline.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If our shareholders sell substantial amounts of
our common stock in the public market following this offering,
the market price of our common stock could decline. Immediately
after this offering, there will be a total
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock outstanding, of
which &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;will
be freely tradable upon completion of this offering subject, in
some instances, to the volume and other limitations of
Rule&nbsp;144 under the Securities Act of 1933, as amended, or
the Securities Act. In addition, certain of our existing
stockholders are subject to &#147;lock-up&#148; agreements that
prohibit the sale of these shares in the public market for
180&nbsp;days after the date of this prospectus. When the
180-day period expires or if Credit Suisse First Boston
Corporation consents, in its sole discretion, to an earlier
sale, our existing stockholders will be able to sell
</FONT>

<P align="center"><FONT size="2">11
</FONT>

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<DIV align="left">
<FONT size="2">their shares in the public market, subject to
some legal restrictions. As restrictions on resales end, if our
existing stockholders sell a large number of shares, the market
price of our common stock could decline dramatically. Moreover,
the perception in the public market that these stockholders
might sell shares of our common stock could depress the market
price of our common stock.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As soon as practicable after this offering, we
intend to register for resale approximately 11.4&nbsp;million
shares of our common stock reserved under our stock option
plans. As of April&nbsp;1, 2002, options to purchase 6,058,042
shares of our common stock were outstanding, 2,932,891 of which
were exercisable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain existing shareholders have rights under
certain circumstances and subject to certain limitations to
require us to register their shares for future sale. See
<I>&#147;Description of Capital Stock&#148;, &#147;Shares
Eligible for Future Sale&#148;</I> and <I>&#147;Plan of
Distribution&#148;.</I>
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
may be risks related to our use of Arthur Andersen LLP as our
outside auditors.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;14, 2002, our independent certified
public accountant, Arthur Andersen LLP, was indicted on federal
obstruction of justice charges arising from the
U.S.&nbsp;government&#146;s investigation of Enron Corp. Arthur
Andersen has indicated that it intends to vigorously contest the
indictment. As a public company, we will be required to file
with the Securities and Exchange Commission, or SEC, periodic
financial statements audited or reviewed by an independent,
certified public accountant. The SEC has said that it will
continue accepting financial statements audited by Arthur
Andersen, and interim financial statements reviewed by it, so
long as Arthur Andersen is able to make certain representations
to its clients. Arthur Andersen&#146;s current difficulties as a
result of involvement with Enron may result in the loss of key
members of our audit team from Arthur Andersen, which could
adversely affect our ability to get required reports completed
in a timely manner. Our access to the capital markets and our
ability to make timely SEC filings could be impaired if the SEC
ceases accepting financial statements audited by Arthur
Andersen, if Arthur Andersen becomes unable to make required
representations to us or if for any reason Arthur Andersen is
unable to perform required audit-related services for us in a
timely manner. In such a case, we would promptly seek to engage
new certified public accountants or take such other actions as
may be necessary to enable us to maintain access to the capital
markets and timely financial reporting and such actions could be
disruptive to our operations and affect the price and liquidity
of our securities. Certain investors, including significant
funds and institutional investors, may choose not to hold or
invest in securities that do not have current financial reports
available. Furthermore, relief which may be available to
shareholders under the federal securities laws against auditing
firms may not be available as a practical matter against Arthur
Andersen should it cease to operate or be financially impaired.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
management has broad discretion as to the use of the net
proceeds from this offering.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our management has broad discretion as to the use
of the net proceeds that we will receive from this offering. We
cannot assure you that our management will apply these funds
effectively, nor can we assure you that the net proceeds from
this offering will be invested in a manner yielding a favorable
return.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provisions
in our charter documents and Delaware law may delay or prevent
our acquisition by a third party.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our certificate of incorporation, by-laws and
shareholder rights agreement contain several provisions that may
make it more difficult for a third party to acquire control of
us without the approval of our board of directors. These
provisions may make it more difficult or expensive for a third
party to acquire a majority of our outstanding voting common
stock. These provisions also may delay, prevent or deter a
merger, acquisition, tender offer, proxy contest or other
transaction that might otherwise result in our
shareholders&#146; receiving a premium over the market price for
their common stock. See <I>&#147;Description of Capital
Stock&nbsp;&#151; Anti-Takeover Provisions of Our Certificate of
Incorporation, By-laws and Shareholder Rights Plan&#148;.</I>
</FONT>

<P align="center"><FONT size="2">12
</FONT>
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<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
existing shareholders will continue to control us after this
offering, and they may make decisions with which you may
disagree.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After this offering, our existing shareholders
will beneficially hold
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of our outstanding common stock, or
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
if the underwriters&#146; over-allotment option is exercised in
full. Our executive officers and directors as a
group&nbsp;&#151; currently 16&nbsp;persons&nbsp;&#151; will
beneficially hold
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of our outstanding common stock after this offering, including
currently exercisable stock options,
or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
if the over-allotment option is fully exercised. Consequently,
our existing shareholders will continue to control us after this
offering is completed, and our officers and directors will
continue to be significant holders. Through their voting power,
these persons may make decisions regarding Cos&#237; with which
you may disagree. Our existing shareholders may have interests
which conflict with the interests of the other holders of our
common stock.
</FONT>

<P align="center"><FONT size="2">13
</FONT>
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<!-- link1 "<FONT size="2">FORWARD-LOOKING STATEMENTS</FONT>" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="center">
<B><FONT size="2">FORWARD-LOOKING STATEMENTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This prospectus contains statements about future
events and expectations that constitute forward-looking
statements. Forward-looking statements are based on
management&#146;s beliefs, assumptions and expectations of our
future economic performance, taking into account the information
currently available to management. These statements are not
statements of historical fact. Forward-looking statements
involve risks and uncertainties that may cause our actual
results, performance or financial condition to differ materially
from the expectations of future results, performance or
financial condition we express or imply in any forward-looking
statements. In addition to the other factors discussed under
<I>&#147;Risk Factors&#148;</I> elsewhere in this prospectus,
factors that could contribute to these differences include, but
are not limited to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the cost of our principal food products;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">labor shortages or increased labor costs;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">changes in consumer preferences and demographic
	trends;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">increasing competition in the fast casual dining
	segment of the restaurant industry;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">expansion into new markets;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the rate of growth of general and administrative
	expenses associated with building a strengthened corporate
	infrastructure to support our growth initiatives;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">fluctuations in our quarterly results;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">increased government regulation;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">supply and delivery shortages or interruptions;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">market saturation due to new restaurant openings;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">inadequate protection of our intellectual
	property;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">adverse weather conditions which impact customer
	traffic at our restaurants; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">adverse economic conditions.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The words &#147;believe,&#148; &#147;may,&#148;
&#147;will,&#148; &#147;should,&#148; &#147;anticipate,&#148;
&#147;estimate,&#148; &#147;expect,&#148; &#147;intend,&#148;
&#147;objective,&#148; &#147;seek,&#148; &#147;plan,&#148;
&#147;strive&#148; or similar words, or the negatives of these
words, identify forward-looking statements. We qualify any
forward-looking statements entirely by these cautionary factors.
</FONT>

<P align="center"><FONT size="2">14
</FONT>

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<!-- link1 "<FONT size="2">USE OF PROCEEDS</FONT>" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="center">
<B><FONT size="2">USE OF PROCEEDS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cos&#237; is offering for
sale &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock by this prospectus. Based on an assumed initial
public offering price of $&nbsp;per share, the midpoint of the
range shown on the cover page of this prospectus, we estimate
that our net proceeds from the sale of these shares will be
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
after deducting underwriting discounts and estimated offering
expenses. Our estimated net proceeds will be approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
if the underwriters exercise their option to purchase an
additional &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
from us to cover over-allotments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We intend to use a portion of the net proceeds of
this offering to finance the development of new restaurants and
approximately $6.27&nbsp;million to prepay our outstanding 13%
senior subordinated notes due 2006, including accrued interest
and a prepayment premium of $0.05&nbsp;million. The balance of
the net proceeds of this offering will be used for general
corporate purposes, including working capital needs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although we do not contemplate any changes in our
use of proceeds, we may reprioritize the uses listed above or
use some proceeds for other purposes in the event the specified
uses require less capital than expected.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pending application of the net proceeds as
described above, we will invest the net proceeds in
interest-bearing investment grade securities.
</FONT>

<!-- link1 "<FONT size="2">DIVIDEND POLICY</FONT>" -->
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<P align="center">
<B><FONT size="2">DIVIDEND POLICY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We currently intend to retain all future earnings
to finance the expansion of our business. We have not paid cash
dividends in the past and do not anticipate paying cash
dividends in the foreseeable future. Any future determination
regarding cash dividend payments will be made by our board of
directors and will depend upon our earnings, capital
requirements, financial condition, restrictions in financing
agreements and other factors deemed relevant by our board of
directors.
</FONT>

<P align="center"><FONT size="2">15
</FONT>

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<!-- link1 "<FONT size="2">CAPITALIZATION</FONT>" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="center">
<B><FONT size="2">CAPITALIZATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows, as of April&nbsp;1,
2002, on a consolidated basis, our cash and cash equivalents,
short-term debt and capitalization, both actual and as adjusted.
The as adjusted amounts give effect to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the sale
	of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
	of common stock in this offering, assuming an initial public
	offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
	share, the mid-point of the range shown on the cover page of
	this prospectus;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the conversion of all outstanding Series&nbsp;A
	and Series&nbsp;C preferred stock, which will be converted upon
	consummation of this offering;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the exercise of all outstanding warrants to
	purchase shares of our common stock, which warrants will be
	exercised upon consummation of this offering; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the application of a portion of the estimated net
	proceeds from that sale, after deducting underwriters discounts
	and estimated offering expenses, to prepay our 13% senior
	subordinated notes due 2006.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You should read the following capitalization data
in conjunction with &#147;<I>Use of Proceeds</I>&#148;,
&#147;<I>Selected Financial Data</I>&#148;,
&#147;<I>Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations</I>&#148;, the consolidated
financial statements and accompanying notes and the other
financial data included elsewhere in this prospectus.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="66%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">April 1, 2002</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">As Adjusted</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(unaudited)</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(in thousands, except</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash and cash equivalents
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,568.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Short-term debt
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,541.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Long-term debt
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">senior subordinated notes due 2006
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,435.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">other long term debt
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,110.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Mandatorily redeemable preferred stock, $.01 par
	value; 16,673,947&nbsp;shares authorized; 11,318,567&nbsp;shares
	issued and outstanding
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">113,532.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Mandatorily redeemable preferred stock, $.01 par
	value; 0&nbsp;shares authorized; 0&nbsp;shares issued and
	outstanding
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="10"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stockholders&#146; equity:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Common stock, $.01 par value;
	30,000,000&nbsp;shares authorized; 7,951,365&nbsp;shares issued
	and outstanding
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">79.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Common stock, $.01 par value;
	100,000,000&nbsp;shares
	authorized; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
	issued and outstanding
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Additional paid-in capital
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31,952.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock subscriptions receivable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,974.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accumulated deficit
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(124,242.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total common stockholders&#146; equity (deficit)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(95,185.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total capitalization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,434.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The table above excludes 6,058,042&nbsp;shares of
our common stock issuable upon the exercise of stock options
outstanding under our stock option plans as of April&nbsp;1,
2002, of which 2,932,891 were exercisable as of April&nbsp;1,
2002.
</FONT>

<P align="center"><FONT size="2">16
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "<FONT size="2">DILUTION</FONT>" -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="center">
<B><FONT size="2">DILUTION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our net tangible book value as of April&nbsp;1,
2002 was $17,088,075, or $0.87 per share of common stock. Net
tangible book value per share is the amount by which total
tangible assets exceeds total liabilities, divided by the total
number of shares of common stock outstanding. Our adjusted net
tangible book value as of April&nbsp;1, 2002 would have been
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
or $&nbsp;per share, after giving effect to the sale
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock offered by this prospectus at an assumed initial
offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share, the midpoint of the range shown on the cover page of this
prospectus, and after deducting estimated underwriting discounts
and estimated offering expenses and the prepayment of our 13%
senior subordinated notes due 2006. This represents an immediate
increase in the net tangible book value of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share to existing shareholders, and an immediate dilution of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share to new investors. Dilution per share represents the
difference between the price per share to be paid by new
investors and the net tangible book value per share immediately
after this offering. The following table illustrates the per
share dilution:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Pro</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Forma</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Assumed initial public offering price
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net tangible book value per share as of
	April&nbsp;1, 2002
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.87</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Increase attributable to the sale of shares
	offered hereby
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Adjusted net tangible book value after this
	offering
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Dilution in the net tangible book value to new
	investors
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth, as of
April&nbsp;1, 2002, the differences between the total
consideration paid and the average price per share paid by
existing investors and by new investors purchasing shares in
this offering:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Shares Purchased</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Total Consideration</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average Price</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Percent</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Percent</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Per Share</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Existing Stockholders
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,574,522.57</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">124,868,990</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">New Investors
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The foregoing table does not reflect 6,058,042
shares of common stock issuable upon the exercise of stock
options outstanding under our stock option plans as of
April&nbsp;1, 2002, of which 2,932,891 were exercisable as of
April&nbsp;1, 2002 at a weighted average exercise price
of&nbsp;$5.18.
</FONT>

<P align="center"><FONT size="2">17
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "<FONT size="2">SELECTED FINANCIAL DATA</FONT>" -->
<DIV align="left"><A NAME="009"></A></DIV>

<P align="center">
<B><FONT size="2">SELECTED FINANCIAL DATA</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following selected consolidated financial
data as of and for the years ended January&nbsp;1, 2001 and
December&nbsp;31, 2001 have been derived from, and are qualified
by reference to, our Consolidated Financial Statements audited
by Arthur Andersen LLP, independent accountants, included
elsewhere in this prospectus and should be read in conjunction
with those Consolidated Financial Statements and Notes thereto
and Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations. The following selected
consolidated financial data for the year ended January&nbsp;3,
2000 have been derived from our Consolidated Financial
Statements audited by Ernst &#38; Young LLP, independent
auditors, included elsewhere in this prospectus and should be
read in conjunction with those Consolidated Financial Statements
and Notes thereto and Management&#146;s Discussion and Analysis
of Financial Condition and Results of Operations. The selected
consolidated balance sheet data as of January&nbsp;3, 2000 have
been derived from our Consolidated Financial Statements audited
by Ernst &#38; Young LLP, independent auditors, not included
herein. The selected consolidated financial data as of and for
the fiscal year ended December&nbsp;28, 1998 have been derived
from our Consolidated Financial Statements audited by Ernst
&#38; Young LLP, and other auditors, not included herein. The
pro forma selected consolidated financial data as of and for
fiscal 1997 have been derived from the audited financial
statements of Xando, Inc. and Cos&#237; Sandwich Bar, Inc.,
audited by Ernst&nbsp;&#38; Young LLP and other auditors, not
included herein, which give effect to the merger accounted for
as a pooling of interests as of the beginning of fiscal 1997.
The selected financial data presented below as of April&nbsp;1,
2002 and for the fiscal three months ended April&nbsp;2, 2001
and April&nbsp;1, 2002 have been derived from our unaudited
financial statements also appearing herein, which have been
prepared on the same basis as our audited consolidated financial
statements and, in the opinion of management, contain all
adjustments, consisting of only normal recurring adjustments,
necessary for a fair presentation of the results of operations
for such periods. The results of operations for the fiscal three
months ended April&nbsp;1, 2002 are not necessarily indicative
of results to be expected for any subsequent period.
</FONT>

<P align="center"><FONT size="2">18
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">Selected Consolidated Financial and Operating
Data</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="24%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="7"></TD>
</TR>

<TR>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="19"></TD>
        <TD></TD>
        <TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
</TR>

<TR>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="19" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
        <TD></TD>
        <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">April&nbsp;2,</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">April&nbsp;1,</FONT></B></TD>
</TR>

<TR>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
        <TD></TD>
        <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="top">
        <TD colspan="3"></TD>
        <TD></TD>

<TD colspan="3" align="center" nowrap><B><FONT size="1">(Pro<BR>
Forma<BR>
Unaudited)</FONT></B></TD>
        <TD></TD>

<TD align="center" colspan="15"><B><FONT size="1">(Audited)</FONT></B></TD>
        <TD></TD>

<TD colspan="7" align="center"><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>


<TR>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="27" align="center" nowrap><B><FONT size="1">(in thousands, except per share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD colspan="3" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <B><FONT size="2">Statement of Operations Data:</FONT></B></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD colspan="3" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Net sales
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">7,861.4</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">20,686.7</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">37,262.2</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">51,222.8</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">70,184.1</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">15,855.9</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">18,052.1</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD colspan="3" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Costs and expenses:
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Cost of goods sold
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">2,444.6</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">6,332.9</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">10,838.5</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">13,844.0</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">18,791.7</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">4,205.6</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">4,853.4</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Restaurant operating expenses
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">4,096.7</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">11,386.5</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">22,236.2</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">32,172.9</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">45,114.5</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">9,976.1</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">11,127.0</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Total cost of sales
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">6,541.3</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">17,719.4</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">33,074.7</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">46,016.9</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">63,906.2</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">14,181.7</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">15,980.4</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD colspan="3" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Restaurant operating margin (a)
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">1,320.1</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">2,967.3</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">4,187.5</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">5,205.9</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">6,277.9</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">1,674.2</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">2,071.7</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">General and administrative expenses
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">3,043.8</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">7,728.7</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">14,024.3</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">14,774.2</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">18,361.5</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">3,735.2</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">4,620.3</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Depreciation and amortization
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">503.0</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">1,196.6</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">3,155.2</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">6,158.1</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">6,690.0</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">2,021.9</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">1,210.3</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Restaurant pre-opening expenses
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">287.1</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">720.9</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">661.4</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">1,409.5</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">1,438.8</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">253.6</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">111.4</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Provision for losses on asset impairments and
        disposals
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">4,208.7</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">5,847.5</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">8,486.3</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">90.4</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Merger costs and related expenses
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">8,958.7</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Lease termination costs
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">3,437.1</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">477.3</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">6,410.7</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">578.3</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Stock compensation
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">4,512.6</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD colspan="3" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Operating income (loss)
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(2,513.8</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(6,678.9</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(34,770.5</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(23,460.7</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(35,109.4</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(5,005.2</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(3,870.3</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
        <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
        <TD colspan="3" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Other income (expense):
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Interest income
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">56.5</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">406.6</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">478.6</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">441.4</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">340.5</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">60.8</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">29.9</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Interest expense
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(141.6</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(94.6</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(206.1</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(210.7</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(654.4</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(98.4</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(387.8</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Other expense
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(245.5</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Total other income (expense),&nbsp;net
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(330.6</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">312.0</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">272.5</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">230.7</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(313.9</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(37.6</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(357.9</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
        <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD colspan="3" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Income (loss)&nbsp;before income tax
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(2,844.4</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(6,366.9</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(34,498.0</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(23,230.0</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(35,423.3</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(5,042.8</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(4,228.2</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
        <TD colspan="3" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Income tax benefit (provision)
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD colspan="3" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Net income (loss)
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(2,844.4</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(6,366.9</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(34,498.0</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(23,230.0</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(35,423.3</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(5,042.8</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(4,228.2</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
        <TD colspan="3" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Preferred stock dividends
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(1,064.4</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(2,561.3</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(4,219.7</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(6,678.1</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(1,312.7</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(1,960.5</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
        <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD colspan="3" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Net income (loss) attributable to common
        stockholders
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(2,844.4</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(7,431.3</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(37,059.3</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(27,449.7</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(42,101.4</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(6,355.5</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(6,188.7</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
        <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
        <TD colspan="3" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Net income (loss) per common share:
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Basic and diluted
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(0.62</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(1.25</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(5.02</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(3.48</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(5.34</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(0.81</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(0.78</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
        <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
        <TD colspan="3" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Shares used in computing net income per common
        share (in thousands)
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2" align="left" valign="top">
        <DIV style="margin-left:10px; text-indent:-10px">
        <FONT size="2">Basic and diluted
        </FONT></DIV>
        </TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">4,568</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">5,960</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">7,376</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">7,882</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">7,888</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">7,882</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">7,923</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><HR size="1" noshade></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">19
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="24%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">April&nbsp;2,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">April&nbsp;1,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Pro</FONT></B></TD>
	<TD></TD>
	<TD colspan="15"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Forma</FONT></B></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">(Audited)</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="27" align="center" nowrap><B><FONT size="1">Unaudited)</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="27" align="center" nowrap><B><FONT size="1">(in thousands, except per share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Pro Forma
	Data&nbsp;</FONT></B><FONT size="2">(b)<B>:</B>
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss) attributable to common
	stockholders
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(35,423.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,228.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss) per common share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic and diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.12</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.23</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Shares used in computing net income per common
	share (in thousands)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic and diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,676</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,558</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Selected Balance Sheet Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash and cash equivalents
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,835.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,494.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,985.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,062.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,469.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,530.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,568.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,277.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,982.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25,856.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,065.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,388.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40,307.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">44,987.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total debt and capital lease obligations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,351.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">989.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,645.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,435.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,180.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,169.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,087.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Mandatorily redeemable preferred stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,680.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,020.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">61,695.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">92,289.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">78,080.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">113,532.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total common stockholders&#146; equity (deficit)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,452.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,378.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(20,825.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(48,275.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(88,979.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(54,625.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(95,185.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Selected Statement of Cash Flow
	Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash flow from operating activities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,236.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,146.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,539.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,539.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(12,299.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,925.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,349.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash flow from investing activities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,225.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,704.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(14,742.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(18,347.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(20,350.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,418.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,725.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash flow from financing activities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,046.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,510.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,773.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,964.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,056.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,811.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,173.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Selected Operating Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restaurants open at end of period
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(a)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Restaurant operating margin represents sales less
	cost of goods sold and restaurant operating expenses.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(b)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Reflects the conversion of all outstanding
	Series&nbsp;A and Series&nbsp;C preferred stock and the exercise
	of all outstanding warrants upon consummation of this offering.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">20
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "<FONT size="2">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</FONT>" -->
<DIV align="left"><A NAME="010"></A></DIV>

<P align="center">
<B><FONT size="2">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS
OF</FONT></B>

<DIV align="center">
<B><FONT size="2">FINANCIAL CONDITION AND RESULTS OF
OPERATIONS</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following discussion of our financial
condition and results of operations should be read in
conjunction with our financial statements and their notes
appearing elsewhere in this prospectus.
</FONT>

<P align="left">
<B><FONT size="2">Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We own and operate 66 fast casual restaurants in
11&nbsp;states and the District of Columbia. <I>Cos&#237;
</I>restaurants are all-day caf&#233;s that feature signature
bread and coffee products in an environment that changes
throughout the day. <I>Cos&#237; </I>restaurants offer
breakfast, lunch, afternoon coffee, dinner, and dessert menus
full of creative, cravable foods and beverages. From Cos&#237;
<I>Squagels&#174;</I> (square bagels made from Cos&#237; bread)
to our award-winning sandwiches and pizzas, Cos&#237; has
developed featured foods that are built around our secret,
generations-old recipe for crackly crust flatbread. These
products are freshly baked in front of our customers throughout
the day in open flame stone hearth ovens prominently located in
each of our restaurants. Our coffees are freshly brewed and
expertly prepared by our baristas and bartenders. Our coffee
beverages range from simple Cos&#237; brews and traditional
lattes to our innovative Double Oh Arctic Mochas and specialty
coffee cocktails, featuring the <I>Mocha Kiss</I>&#174;. We
offer friendly and attentive service in a warm and inclusive
atmosphere. Our vision is to become America&#146;s favorite
caf&#233; by giving every customer something to look forward to
in their day.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We operate our restaurants in two formats:
<I>Cos&#237; </I>and <I>Cos&#237; Downtown</I>. All of our
restaurants offer our signature bread and coffee products for
breakfast, lunch and afternoon coffee in a counter service
format. After 5 p.m., our <I>Cos&#237;</I> restaurants add table
service and offer dinner and dessert in a casual dining format.
<I>Cos&#237; Downtown </I>restaurants, which are located in
non-residential central business districts, close for the day in
the early evening. By operating in multiple dayparts, we believe
we are able to maximize revenues and leverage both development
and operating costs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Through our development of the <I>Cos&#237;
</I>and <I>Cos&#237; Downtown </I>formats in both existing and
new markets, we believe we have the platform to expand in
multiple real estate paradigms in order to maximize financial
performance. Our restaurants are located in a wide range of
markets and trade areas, including business districts and
residential communities in both urban and suburban locations. We
believe that we have created significant brand equity in our
markets and that we have demonstrated the appeal of our concept
to a wide variety of customers. We opened 17&nbsp;new
restaurants in fiscal 2001, including seven&nbsp;restaurants in
the fourth quarter, and expect to open approximately 30 to
35&nbsp;restaurants in fiscal 2002 and approximately 53 to
59&nbsp;restaurants in fiscal 2003 by expanding our presence in
existing markets and selectively entering new markets. We closed
two restaurants in fiscal 1999, one restaurant and our
mini-training restaurant associated with the Xando Coffee and
Bar former headquarters in fiscal 2000 and closed one restaurant
in addition to our World Trade Center restaurant, our World
Trade Center kiosk and our World Financial Center restaurant
which were closed due to the events of September&nbsp;11th in
fiscal 2001. We have closed one restaurant in the first quarter
of fiscal 2002, which was not suited for remodeling to our
current prototype.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cos&#237; was created by the merger in
October&nbsp;1999 of two restaurant concepts, Cos&#237; Sandwich
Bar and Xando Coffee and Bar. The merger was accounted for as a
pooling of interests. Each of the predecessor companies served a
similar customer, but focused on serving customer needs at
different parts of the day. By adding Cos&#237; Sandwich Bar
products to the Xando Coffee and Bar five daypart platform, we
believe we have created a restaurant concept that satisfies our
customers&#146; needs throughout the day. The Xando Coffee and
Bar and Cos&#237; Sandwich Bar locations that were opened prior
to the 1999 merger are being remodeled to either the
<I>Cos&#237; </I>or <I>Cos&#237; Downtown </I>formats.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During fiscal 2000 and 2001 we dedicated
significant resources to the development of the <I>Cos&#237;
</I>and <I>Cos&#237; Downtown </I>prototypes and the related
restaurant operating and support systems. These prototypes are
expected to be the basis for all future <I>Cos&#237; </I>and
<I>Cos&#237; Downtown </I>locations. As part of the concept
development process, we closed or remodeled a number of
restaurants in order to facilitate the transition to our new
prototype. In fiscal 2000, as part of this process, we
discontinued the use of a commissary to supply products to our
</FONT>

<P align="center"><FONT size="2">21
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">restaurants. By eliminating commissaries our
expansion will not be restricted by geographic proximity to
commissary kitchens.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that the flexibility of our multiple
daypart model, the appeal of our high quality, innovative
product offering, and our ability to operate in a wide variety
of real estate markets have created an attractive restaurant
model, providing us with considerable growth opportunities to
develop our brand nationwide.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our financial performance in fiscal 2001 was
adversely affected by the results of the 16&nbsp;restaurants
that we operated in New York Central Business District
locations. These restaurants have high, market specific, fixed
expenses and were disproportionately impacted by the economic
recession in 2001 and the events of September&nbsp;11th.
</FONT>

<P align="left">
<B><FONT size="2">Critical Accounting Policies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our consolidated financial statements and the
notes to our consolidated financial statements contain
information that is pertinent to management&#146;s discussion
and analysis. The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and
liabilities. We believe the following critical accounting
policies involve additional management judgment due to the
sensitivity of the methods, assumptions, and estimates necessary
in determining the related asset and liability amounts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Statement of Financial Accounting Standards, or
SFAS, No.&nbsp;121, &#147;Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed
Of,&#148; requires management judgments regarding the future
operating and disposition plans for marginally performing
assets, and estimates of expected realizable values for assets
to be sold. The application of SFAS&nbsp;121 has affected the
amount and timing of charges to operating results that have been
significant in recent years. We evaluate possible impairment at
the individual restaurant level, and record an impairment loss
whenever we determine impairment factors are present.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have estimated our likely liability under
contractual leases for restaurants that have been, or will be
closed. Such estimates have affected the amount and timing of
charges to operating results that have been significant in
recent years, and are impacted by management&#146;s judgments
about the time it may take to find a suitable subtenant or
assignee, or the terms under which a termination of the lease
agreement may be negotiated with the landlord.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have recorded a full valuation allowance to
reduce our deferred tax assets related to net operating loss
carry forwards. A positive adjustment to income will be required
in future years if we determine that we could realize these
deferred tax assets.
</FONT>

<P align="left">
<B><FONT size="2">Net Sales</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our sales are composed almost entirely of food
and beverage sales.
</FONT>

<P align="left">
<B><FONT size="2">Comparable Restaurant Sales</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In calculating comparable restaurant sales, we
include a restaurant in the comparable restaurant base after it
has been in operation for 15&nbsp;full months. At fiscal year
end 2000, there were 34&nbsp;restaurants in the comparable
restaurant base. At fiscal year end 2001, there were
40&nbsp;restaurants in the comparable restaurant base.
</FONT>

<P align="left">
<B><FONT size="2">Costs and Expenses</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cost of goods sold.
</FONT></I><FONT size="2">Cost of goods sold is composed of food
and beverage costs. Food and beverage costs are variable, and
increase with sales volume.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Restaurant operating expenses.
</FONT></I><FONT size="2">Restaurant operating expenses include
direct hourly and management wages, bonuses, taxes and benefits
for restaurant employees, and other direct restaurant level
operating expenses including the cost of supplies, restaurant
repairs and maintenance, utilities, rents and related occupancy
costs.
</FONT>

<P align="center"><FONT size="2">22
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">General and administrative expenses.
</FONT></I><FONT size="2">General and administrative expenses
include all corporate and administrative functions that support
our restaurants and provide an infrastructure to facilitate our
future growth. Components of these expenses include executive
management; supervisory and staff salaries, bonuses and related
taxes and employee benefits; travel; information systems;
training; support center rent and related occupancy costs and
professional and consulting fees. The salaries, bonus and
employee benefits costs included as general and administrative
expenses are generally more fixed in nature and do not vary
directly with the number of restaurants we operate.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Depreciation and amortization.
</FONT></I><FONT size="2">Depreciation and amortization
principally includes depreciation on restaurant assets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Restaurant pre-opening expenses.
</FONT></I><FONT size="2">Restaurant pre-opening expenses, which
are expensed as incurred, include the costs of recruiting,
hiring and training the initial restaurant work force, travel,
the cost of food and labor used during the period before
opening, the cost of initial quantities of supplies, and other
direct costs related to the opening of or remodeling of a
restaurant.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our fiscal year ends on the Monday falling
nearest to December&nbsp;31st. Fiscal year 1999 included
53&nbsp;weeks, while fiscal years 2000 and 2001 each included
52&nbsp;weeks.
</FONT>

<P align="left">
<B><FONT size="2">Results of Operations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our operating results for fiscal years 1999, 2000
and 2001 and for the three months ended April&nbsp;2, 2001 and
April&nbsp;1, 2002 expressed as a percentage of sales were as
follows:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Three Months Ended</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">April 2,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">April 1,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">(Audited)</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net sales
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Costs and Expenses:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cost of goods sold
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restaurant operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">62.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">64.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">62.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">61.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total costs of sales
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">88.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">89.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">91.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">89.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">88.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restaurant operating margin
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">General and administrative expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">37.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">28.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Depreciation and amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restaurant pre-opening expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for losses on asset impairments and
	disposals
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Merger costs and related expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Lease termination costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock compensation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(93.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(45.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(50.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(31.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(21.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other income (expense):
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest income
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other income
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total other income (expense),&nbsp;net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income (loss)&nbsp;before income tax
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(92.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(45.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(50.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(31.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income tax benefit (provision)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(92.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(45.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(50.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(31.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">23
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following tables set forth unaudited
quarterly information for each of the nine fiscal quarters in
the period ended April&nbsp;1, 2002. This quarterly information
has been prepared on a basis consistent with our audited
financial statements and, in the opinion of management, includes
all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the
information for the periods presented. Our quarterly operating
results may fluctuate significantly as a result of a variety of
factors, and operating results for any quarter are not
necessarily indicative of results for a full fiscal year. See
<I>&#147;Risk Factors&#148;</I>.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="34%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="15"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Q1</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Q2</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Q3</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Q4</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Q1</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Q2</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Q3</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Q4</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Q1</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="35"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="35" align="center" nowrap><B><FONT size="1">(In thousands, except per share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Net sales
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">10,747.2</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">12,554.1</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">13,610.6</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">14,310.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">15,855.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">18,463.8</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">18,217.0</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">17,647.4</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">18,052.1</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Cost of goods sold
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2,956.4</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,400.4</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,653.2</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,834.0</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">4,205.6</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">4,871.7</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">4,817.3</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">4,897.1</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">4,853.4</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Restaurant operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">6,541.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7,772.6</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">8,414.3</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">9,444.1</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">9,976.1</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">11,586.2</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">11,984.7</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">11,567.5</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">11,127.0</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Total costs of sales
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">9,498.3</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">11,173.0</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">12,067.5</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">13,278.1</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">14,181.7</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">16,457.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">16,802.0</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">16,464.6</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">15,980.4</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Restaurant operating margin
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,248.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,381.1</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,543.1</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,032.8</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,674.2</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2,005.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,415.0</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,182.8</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2,071.7</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">General and administrative expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,125.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2,905.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,273.5</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">5,468.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,735.2</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">4,534.5</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">4,528.4</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">5,563.4</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">4,620.3</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Depreciation and amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,357.2</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,426.7</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,565.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,808.3</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2,021.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2,126.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,243.0</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,298.2</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,210.3</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Restaurant pre-opening expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">136.8</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">189.1</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">411.1</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">672.5</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">253.6</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">320.0</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">407.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">457.3</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">111.4</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Provision for losses on asset impairments and
	disposals
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">5,847.5</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">90.4</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,561.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">6,834.0</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Lease termination costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">477.3</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">578.3</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,647.1</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">4,185.3</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Operating income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(3,371.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(3,140.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(3,707.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(13,241.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(5,005.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(4,975.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(7,973.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(17,155.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(3,870.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Interest income
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">77.3</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">144.0</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">110.1</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">110.0</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">60.8</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">105.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">146.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">26.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">29.9</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Interest expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(47.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(47.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(45.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(70.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(98.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(115.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(106.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(334.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(387.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Net income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(3,341.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(3,043.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(3,642.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(13,202.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(5,042.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(4,984.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(7,933.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(17,462.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(4,228.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Preferred stock dividends
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(783.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(1,003.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(1,144.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(1,288.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(1,312.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(1,639.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(1,836.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(1,890.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(1,960.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Net income (loss) attributable to common
	stockholders
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(4,125.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(4,047.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(4,787.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(14,490.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(6,355.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(6,624.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(9,769.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(19,352.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(6,188.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Net income (loss) per common share
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(0.52</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(0.51</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(0.61</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(1.84</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(0.81</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(0.84</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(1.24</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(2.45</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(0.78</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Shares used in computing net loss per common
	share (in thousands)
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7,882</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7,882</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7,882</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7,882</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7,882</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7,884</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7,890</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7,895</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7,923</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">24
</FONT>
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<P align="left">
<B><FONT size="2">Three Months Ended April&nbsp;1, 2002 vs.
Three Months Ended April&nbsp;2, 2001</FONT></B>

<P align="left">
<B><FONT size="2">Net Sales</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sales increased $2.2 million, or 13.5%, to
$18.1&nbsp;million in the first quarter of fiscal 2002, from
$15.9&nbsp;million in the first quarter of fiscal 2001. This
increase was primarily due to the full quarter contribution of
sales from restaurants opened in fiscal 2001 and positive
comparable restaurant sales of 1%. This was partially offset by
the loss of our World Trade Center restaurant and the closure of
our World Financial Center restaurant due to the events of
September&nbsp;11th. Additionally, one restaurant was not suited
for remodeling to our current prototype and was closed during
the quarter. Comparable restaurant sales were adversely affected
by the effect of the economic downturn on our New York Central
Business District restaurants, the impact of the events of
September&nbsp;11th across all of our restaurants and the
reduction in our menu pricing during the first quarter of fiscal
2002. Excluding the New York Central Business District
restaurants, comparable restaurant sales increased 9% in the
first quarter of fiscal 2002. This increase was driven by sales
performance in the six remodeled restaurants that were open for
the full quarter, and three restaurants that were remodeled
during the quarter, all of which incorporated our full product
line.
</FONT>

<P align="left">
<B><FONT size="2">Costs and Expenses</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cost of goods sold.
</FONT></I><FONT size="2">Cost of goods sold increased
$0.6&nbsp;million, or 15.4%, to $4.9&nbsp;million in the first
quarter of fiscal 2002, from $4.2&nbsp;million in the first
quarter of fiscal 2001. As a percentage of sales, cost of goods
sold increased to 26.9% of sales in the first quarter of fiscal
2002, from 26.5% in the first quarter of fiscal 2001. The
increase in cost of goods sold was primarily due to a reduction
in our menu pricing during the first quarter of fiscal 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Restaurant operating expenses.
</FONT></I><FONT size="2">Restaurant operating expenses
increased $1.1&nbsp;million, or 11.5%, to $11.1&nbsp;million in
the first quarter of fiscal 2002, from $10.0&nbsp;million in the
first quarter of fiscal 2001. This increase is primarily due to
the increased number of restaurants in operation this year. As a
percentage of sales, restaurant operating expenses decreased to
61.6% of sales in the first quarter of fiscal 2002, from 62.9%
in the first quarter of fiscal 2001. This decrease was primarily
due to reductions in our labor costs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">General and administrative expenses.
</FONT></I><FONT size="2">General and administrative expenses
increased $0.9 million, or 23.7% to $4.6 million in the first
quarter of fiscal 2002 from $3.7 million in the first quarter of
fiscal 2001. As a percentage of sales, general and
administrative expenses increased to 25.6% of sales in the first
quarter of fiscal 2002, from 23.6% of sales in the first quarter
of fiscal 2001. The increase was primarily due to growth in our
support staff since the first quarter of last year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Depreciation and amortization.
</FONT></I><FONT size="2">Depreciation and amortization
decreased $0.8&nbsp;million, or 40.1%, to $1.2&nbsp;million in
the first quarter of fiscal 2002, from $2.0&nbsp;million in the
first quarter of fiscal 2001. This decrease was primarily due to
additional depreciation on assets to be disposed of in
connection with restaurant remodels in the first quarter of
fiscal 2001, as well as reduced depreciation in the first
quarter of fiscal 2002 on assets for which impairment
write-downs were taken in fiscal 2001. As a percentage of sales,
depreciation and amortization was 6.7% of sales in the first
quarter of fiscal 2002, compared to 12.8% of sales in the first
quarter of fiscal 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Restaurant pre-opening
expenses.</FONT></I><FONT size="2"> Restaurant pre-opening
expenses decreased to $0.1&nbsp;million in the first quarter of
fiscal 2002, from $0.3&nbsp;million in the first quarter of
fiscal 2001. This decrease was due to a reduction in labor and
travel costs in connection with the refinement of our training
programs and the penetration of existing markets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loss on impairment of property and equipment
and restaurant closures.</FONT></I><FONT size="2"> We did not
recognize impairment losses in the first quarter of fiscal 2002.
In the first quarter of fiscal 2001 we recorded
$0.1&nbsp;million of impairment costs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Lease termination
costs.</FONT></I><FONT size="2"> We did not recognize any lease
termination costs in the first quarter of fiscal 2002. In the
first quarter of fiscal 2001 we recorded $0.6&nbsp;million of
lease termination costs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Interest income and
expense.</FONT></I><FONT size="2"> Interest income decreased by
less than $0.05&nbsp;million in the first quarter of fiscal
2002, from $0.1&nbsp;million in the first quarter of fiscal
2001. Interest expense increased $0.3&nbsp;million to
$0.4&nbsp;million in the first quarter of fiscal 2002, from
$0.1&nbsp;million in the first quarter of fiscal 2001. The
</FONT>

<P align="center"><FONT size="2">25
</FONT>
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<DIV align="left">
<FONT size="2">increase is due to interest on our senior
subordinated debt, which was issued in November&nbsp;2001,
partially offset by reduced interest cost on our outstanding
term loans and capital lease liabilities, as these obligations
were reduced by normal repayments since the first quarter of
fiscal 2001.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Fiscal Year 2001 vs. Fiscal Year
2000</FONT></B>

<P align="left">
<B><FONT size="2">Net Sales</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sales increased $19.0&nbsp;million, or 37.1%, to
$70.2&nbsp;million in fiscal 2001, from $51.2&nbsp;million in
fiscal 2000. This increase was primarily due to sales from the
17&nbsp;new restaurants opened in fiscal 2001, and the full year
contribution of sales from restaurants opened in fiscal 2000.
This increase was partially offset by a 2% decrease in sales of
the restaurants in our comparable restaurant base at the end of
the period, the closure of our World Financial Center restaurant
due to the events of September&nbsp;11th, the closure of the
mini-training restaurant associated with the Xando Coffee and
Bar former headquarters and one additional restaurant closure.
The decrease in comparable restaurant sales was primarily due to
the especially acute effect of the economic downturn on our New
York Central Business District restaurants as well as the
significant impact of the events of September&nbsp;11th.
Excluding the New York Central Business District restaurants,
comparable restaurant sales increased 7% in fiscal 2001,
including an 11% increase in the fourth quarter of fiscal 2001.
This increase was partially due to comparable restaurant sales
in six restaurants that were remodeled during the year to
incorporate our full product line.
</FONT>

<P align="left">
<B><FONT size="2">Costs and Expenses</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cost of goods sold.</FONT></I><FONT size="2">
Cost of goods sold increased $5.0&nbsp;million, or 35.7%, to
$18.8&nbsp;million in fiscal 2001, from $13.8 million in fiscal
2000. As a percentage of sales, cost of goods sold decreased to
26.8% of sales in fiscal 2001, from 27.0% in fiscal 2000. The
decrease in cost of goods sold was primarily due to the full
year benefit of the elimination of our commissary during fiscal
2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Restaurant operating
expenses.</FONT></I><FONT size="2"> Restaurant operating
expenses increased $12.9&nbsp;million, or 40.2%, to
$45.1&nbsp;million in fiscal 2001, from $32.2&nbsp;million in
fiscal 2000. As a percentage of sales, restaurant operating
expenses increased to 64.3% of sales in fiscal 2001, from 62.8%
in fiscal 2000. This increase, which was primarily labor costs,
was due to the development of the <I>Cos&#237; </I>and
<I>Cos&#237; Downtown</I> prototypes, and the related restaurant
operating systems. These prototypes are expected to be the basis
for the future expansion of both the <I>Cos&#237; </I>and
<I>Cos&#237; Downtown</I> concepts. Additionally, sales were
adversely affected by the events of September&nbsp;11th, which
resulted in the fixed components of restaurant operating
expenses increasing as a percentage of sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">General and administrative
expenses.</FONT></I><FONT size="2"> General and administrative
expenses increased $3.6&nbsp;million, or 24.3%, from
$14.8&nbsp;million in fiscal 2000 to $18.4&nbsp;million in
fiscal 2001. The increase was primarily due to the development
of the support systems associated with our growth strategy and
$0.8&nbsp;million of one-time expenses, including severance
payments related to the continued enhancement of our management
team. As a percentage of sales, general and administrative
expenses decreased to 26.2% of sales in fiscal 2001, from 28.8%
of sales in fiscal 2000, due to leveraging of our existing
infrastructure.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Depreciation and
amortization.</FONT></I><FONT size="2"> Depreciation and
amortization increased $0.5&nbsp;million, or 8.6%, to
$6.7&nbsp;million in fiscal 2001, from $6.2&nbsp;million in
fiscal 2000. This increase was due to depreciation on
restaurants opened in 2001 and a full year&#146;s depreciation
on restaurants opened in 2000 of $1.4&nbsp;million. These
increases were offset by a $0.9&nbsp;million reduction from
asset impairment write-downs in connection with continued
refinement of our restaurant prototype.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Restaurant pre-opening
expenses.</FONT></I><FONT size="2"> Restaurant pre-opening
expenses remained constant at $1.4&nbsp;million in fiscal 2001,
despite an increase in the number of restaurants opened or
remodeled. We opened or remodeled 23&nbsp;restaurants in 2001
versus 18 in 2000. Both labor and travel costs were reduced in
our average pre-opening expenses per restaurant as we continued
the refinement of our training programs and penetrated existing
markets.
</FONT>

<P align="center"><FONT size="2">26
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loss on impairment of property and equipment
and restaurant closures.</FONT></I><FONT size="2"> Loss on
impairment of property and equipment and restaurant closures
increased $2.6&nbsp;million, to $8.5&nbsp;million in fiscal
2001, from $5.8&nbsp;million in fiscal 2000. These costs were
due to asset impairment write-downs, the loss of our World Trade
Center restaurant, World Trade Center kiosk and World Financial
Center restaurant and the closure of a restaurant.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Lease termination
costs.</FONT></I><FONT size="2"> Lease termination costs
increased $5.9&nbsp;million to $6.4&nbsp;million in fiscal 2001,
compared to $0.5&nbsp;million in fiscal 2000. These costs were
primarily due to lease terminations in connection with
restaurants closed or planned to close in connection with the
continued refinement of our restaurant prototype in fiscal 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Interest income and
expense.</FONT></I><FONT size="2"> Interest income decreased
$0.1&nbsp;million to $0.3&nbsp;million in fiscal 2001, from
$0.4&nbsp;million in fiscal 2000. Interest expense increased
$0.4&nbsp;million to $0.7&nbsp;million in fiscal 2001, from
$0.2&nbsp;million in fiscal 2000. The increase is due to
interest on our term loans drawn down in late fiscal 2000, which
were outstanding for all of fiscal 2001, and interest on our
senior subordinated debt, which was issued in November 2001.
</FONT>

<P align="left">
<B><FONT size="2">Fiscal Year 2000 vs. Fiscal Year
1999</FONT></B>

<P align="left">
<B><FONT size="2">Net Sales</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sales increased $14.0&nbsp;million, or 37.5%, to
$51.2&nbsp;million in fiscal 2000, from $37.3&nbsp;million in
fiscal 1999. This increase was primarily due to sales from 17
new restaurants, a full year contribution from
11&nbsp;restaurants opened in fiscal 1999 and a 3% increase in
sales in our comparable restaurant base at the end of the
period. These increases were partially offset by the closure of
two restaurants in 1999, one restaurant in 2000 and our
mini-training restaurant associated with the Xando Coffee and
Bar former headquarters.
</FONT>

<P align="left">
<B><FONT size="2">Costs and Expenses</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cost of goods sold.</FONT></I><FONT size="2">
Cost of goods sold increased $3.0&nbsp;million, or 27.7%, to
$13.8&nbsp;million in fiscal 2000, from $10.8&nbsp;million in
fiscal 1999. As a percentage of sales, cost of goods sold
decreased to 27.0% of sales in fiscal 2000, from 29.1% in fiscal
1999. The decrease in cost of goods sold was primarily due to
the elimination of our commissary operation during the year and
a reduction of food costs as a percentage of sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Restaurant operating
expenses.</FONT></I><FONT size="2"> Restaurant operating
expenses increased $9.9&nbsp;million, or 44.7%, to
$32.2&nbsp;million in fiscal 2000, from $22.2&nbsp;million in
fiscal 1999. As a percentage of sales, restaurant operating
expenses increased to 62.8% of sales in fiscal 2000, from 59.7%
in fiscal 1999. This increase, comprised primarily of labor and
fixed expenses, was due to the integration of Xando Coffee and
Bar and Cos&#237; Sandwich Bar concepts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">General and administrative
expenses.</FONT></I><FONT size="2"> General and administrative
expenses increased $0.8&nbsp;million, or 5.3%, to
$14.8&nbsp;million in fiscal 2000, from $14.0&nbsp;million in
fiscal 1999. This growth in general and administrative expense
was the result of only modest growth in our support center staff
levels, as we were able to realize efficiencies through
consolidation of restaurant support staff following the merger
in late 1999. As a percentage of sales, general and
administrative expenses decreased to 28.8% of sales in fiscal
2000, from 37.6% in fiscal 1999, due to leveraging of our
existing infrastructure.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Depreciation and
amortization.</FONT></I><FONT size="2"> Depreciation and
amortization increased $3.0&nbsp;million, or 95.2%, to
$6.2&nbsp;million in fiscal 2000, from $3.2&nbsp;million in
fiscal 1999. This increase was due to a full year&#146;s
depreciation on restaurants opened in 1999 and depreciation of
restaurants opened in 2000 of $2.0&nbsp;million. Additionally,
depreciation increased by $1.0&nbsp;million on assets replaced
or to be replaced in connection with the remodeling of Xando
Coffee and Bar and Cos&#237; Sandwich Bar locations. These
increases were offset by reduced depreciation on assets for
which impairment write-downs were taken in 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Restaurant pre-opening
expenses.</FONT></I><FONT size="2"> Restaurant pre-opening
expenses increased $0.7&nbsp;million, or 113%, to
$1.4&nbsp;million in fiscal 2000, from $0.7&nbsp;million in
fiscal 1999. This increase was due to an increase in the
</FONT>

<P align="center"><FONT size="2">27
</FONT>

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<DIV align="left">
<FONT size="2">number of restaurants opened or remodeled, 18 as
compared to 13 in 1999, as well as an increase in labor and
travel costs as we entered new markets.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loss on impairment of property and equipment
and restaurant closures.</FONT></I><FONT size="2"> Loss on
impairment of property and equipment and restaurant closures
increased $1.6&nbsp;million to $5.8&nbsp;million in fiscal 2000,
from $4.2&nbsp;million in fiscal 1999. These costs were related
to asset impairment write-downs and one restaurant closure.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Lease termination
costs.</FONT></I><FONT size="2"> Lease termination costs
decreased $2.9&nbsp;million to $0.5&nbsp;million in fiscal 2000,
from $3.4&nbsp;million in fiscal 1999. Lease termination costs
were incurred in connection with the merger, as certain
locations were not deemed suitable for our prototype, and were
therefore closed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Merger costs and related
expenses.</FONT></I><FONT size="2"> During fiscal 1999 we
recorded costs of $8.9&nbsp;million, resulting from the merger
of Xando Coffee and Bar and Cos&#237; Sandwich Bar.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Stock compensation.</FONT></I><FONT size="2">
Stock compensation expense of $4.5&nbsp;million in fiscal 1999
relates primarily to compensation expense recognized under
performance based plan accounting for stock options issued to
certain executives of Cos&#237; Sandwich Bar, triggered by the
merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Interest income and
expense.</FONT></I><FONT size="2"> Interest income decreased
$0.1&nbsp;million to $0.4&nbsp;million in fiscal 2000, from
$0.5&nbsp;million in fiscal 1999. Interest expense remained
steady at $0.2&nbsp;million in both fiscal 2000 and fiscal 1999.
</FONT>

<P align="left">
<B><FONT size="2">Potential Fluctuations in Quarterly Results
and Seasonality</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our quarterly operating results may fluctuate
significantly as a result of a variety of factors, including the
timing of new restaurant openings and related expenses,
profitability of new restaurants, increases or decreases in
comparable restaurant sales, general economic conditions,
consumer confidence in the economy, consumer preferences,
competitive factors, unanticipated increases in food, labor,
commodity, energy, insurance and other operating costs, weather
conditions and seasonal fluctuations.
</FONT>

<P align="left">
<B><FONT size="2">Liquidity and Capital Resources</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cash and cash equivalents were $12.6&nbsp;million
on April&nbsp;1, 2002 compared with $4.5&nbsp;million at
December&nbsp;31, 2001 and $5.1&nbsp;million at January&nbsp;1,
2001. Working capital as of April&nbsp;1, 2002 was
$5.2&nbsp;million compared with a deficit of $5.3&nbsp;million
at December&nbsp;31, 2001 and a deficit of $2.8&nbsp;million at
January&nbsp;1, 2001. Our principal requirements for cash are
capital expenditures for the development of new restaurants,
maintaining or remodeling existing restaurants and funding
operations. Since inception, we have financed our requirements
for capital with private equity and debt financings. For the
first quarter of fiscal 2002 and the 52&nbsp;weeks ended
December&nbsp;31, 2001, we met our requirements for capital with
proceeds from the sale of Series&nbsp;C preferred stock and the
issuance of senior subordinated debt.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net cash used in operating activities for the
first quarter of fiscal 2002 was $5.3&nbsp;million, compared to
$12.3&nbsp;million for the 52&nbsp;weeks ended December&nbsp;31,
2001 and $8.5&nbsp;million for the 52&nbsp;weeks ended
January&nbsp;1, 2001. Funds used in operating activities in
fiscal 2001 increased primarily as a result of an increase in
our net loss compared to fiscal 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Total capital expenditures for first quarter of
fiscal 2002 were $2.7&nbsp;million, compared to expenditures of
$20.4&nbsp;million for the 52&nbsp;weeks ended December&nbsp;31,
2001. These expenditures were primarily related to the
remodeling of three restaurants in the first quarter of fiscal
2002, opening of new restaurants and maintaining or remodeling
existing restaurants in fiscal 2001. Total capital expenditures
were $18.2&nbsp;million for fiscal 2000, and were primarily
related to the opening of new restaurants, and for maintaining
or remodeling existing restaurants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net cash provided by financing activities
provided $16.2 million for the first quarter of fiscal 2002,
$32.1 million for the 52&nbsp;weeks ended December&nbsp;31, 2001
and $25.0&nbsp;million for the 52&nbsp;weeks ended
January&nbsp;1, 2001. In the first quarter of fiscal 2002, we
issued approximately 2.0&nbsp;million shares of Series&nbsp;C
preferred stock and received approximately $19.0&nbsp;million,
net of offering costs. Of this, approximately $3.6&nbsp;million
represented the exchange of approximately $3.5&nbsp;million face
amount of our 13% senior
</FONT>

<P align="center"><FONT size="2">28
</FONT>
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<DIV align="left">
<FONT size="2">subordinated notes, and accrued interest. We also
issued $0.5&nbsp;million of additional 13% senior subordinated
notes during the first quarter of fiscal 2002. In fiscal 2001 we
sold approximately 2.5&nbsp;million shares of Series&nbsp;C
preferred stock and received approximately $24.1&nbsp;million,
net of offering costs. In November&nbsp;2001, we entered into
senior subordinated note and warrant purchase agreements with a
group of investors, pursuant to which we received approximately
$8.8&nbsp;million in proceeds. During 2001 we entered into other
financing agreements totaling approximately $0.4&nbsp;million
and repaid approximately $1.4&nbsp;million on existing loans and
capital leases. The financing activities for the 52&nbsp;weeks
ended January&nbsp;1, 2001 included $22.5&nbsp;million from the
issuance of approximately 2.5&nbsp;million shares of preferred
stock, and $3.0&nbsp;million in proceeds from the issuance of
debt incurred under our equipment loan credit facility to
finance our equipment requirements, offset by payments on debt
and capital leases of $0.2&nbsp;million, and $0.3&nbsp;million,
respectively. There are two notes payable outstanding under the
equipment loan credit facility; a note payable due
September&nbsp;1, 2003 at an interest rate of 9.1%, and a note
payable due December&nbsp;1, 2003 at an interest rate of 8.5%.
We currently anticipate that our capital expenditures during
2002 will be approximately $30.0&nbsp;million, principally for
the opening of approximately 30 to 35 new restaurants, and for
maintaining and remodeling existing restaurants. We expect that
future restaurants will require, on average, an investment per
restaurant (excluding pre-opening expenses which are expensed as
incurred) of approximately $0.7&nbsp;million, net of landlord
allowances. We expect to fund these expenditures principally
through this offering.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our capital requirements, including development
costs related to the opening of additional restaurants and for
maintenance and remodeling expenditures have been, and will
continue to be significant. Our future capital requirements and
the adequacy of available funds will depend on many factors,
including the pace of our expansion, real estate markets, the
availability of suitable site locations and the nature of the
arrangements negotiated with landlords. We believe that our
current liquidity and resources provides sufficient liquidity to
fund our operations for at least 12&nbsp;months. We presently
anticipate that funds raised through this offering will be
sufficient to fund our cash requirements through 2004.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
Commitments</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Due within</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Due in from</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Due in from</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Due after</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Contractual Obligations</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1&nbsp;year</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1&nbsp;to 3 years</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">3&nbsp;to 5 years</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">5&nbsp;years</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Notes Payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,695.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,136.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,338.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">108.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">112.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sr. Subordinated Debt (a)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,907.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,907.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Capital Lease Obligations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">577.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">441.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">135.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating Lease Obligations (b)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100,848.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,254.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,780.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,947.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46,866.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Mandatorily Redeemable Preferred Stock (c)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">93,292.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,768.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">74,524.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(a)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">To be prepaid with a portion of the proceeds from
	this offering. Amount shown is net of discount of $1,045.6.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(b)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes approximately $16.9 million of
	obligations on leases for restaurants which have either been
	closed or are planned to be closed.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(c)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">To be converted to common stock at the time of
	this offering.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are obligated under non-cancelable operating
leases for our restaurants and our administrative offices. Lease
terms are generally for ten years with renewal options and
generally require us to pay a proportionate share of real estate
taxes, insurance, common area and other operating costs. Some
restaurant leases provide for contingent rental payments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except for the foregoing, we have no off-balance
sheet contractual arrangements. We have no unconditional
purchase arrangements except that as of April&nbsp;1, 2002 we
were party to contracts with respect to the construction of
restaurants for which approximately $1.6&nbsp;million remained
to be paid, and we are obligated to purchase approximately $0.2
million of roasted coffee between now and fiscal year end 2002.
Historically we have not purchased nor entered into interest
rate swaps or future, forward option or other
</FONT>

<P align="center"><FONT size="2">29
</FONT>
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<DIV align="left">
<FONT size="2">instruments designed to hedge against changes in
interest rates or the price of commodities we purchase, except
as described above.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Recently Issued Accounting
Pronouncements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July&nbsp;2001, the Financial Accounting
Standards Board, or FASB, issued SFAS No.&nbsp;141,
&#147;Business Combinations&#148; and No.&nbsp;142,
&#147;Goodwill and Other Intangible Assets.&#148; SFAS&nbsp;141
requires all business combinations initiated after June&nbsp;30,
2001 to be accounted for using the purchase method. Under
SFAS&nbsp;142, goodwill and intangible assets with indefinite
lives are no longer amortized but are reviewed annually (or more
frequently if impairment indicators arise) for impairment.
Separable intangible assets that are not deemed to have
indefinite lives will continue to be amortized over their useful
lives (but with no maximum life). The amortization provisions of
SFAS&nbsp;142 apply to goodwill and intangible assets acquired
after June&nbsp;30, 2001. We are currently evaluating the impact
of the adoption of SFAS&nbsp;141 and 142. We believe that
adoption of this standard will not have a material effect on our
financial statements, principally because our significant
business combination (See Note&nbsp;3 to the financial
statements included in the Prospectus) was accounted for under
the pooling of interests method of accounting in which no
goodwill was recorded. Effective January&nbsp;1, 2002, our
trademarks with indefinite lives will no longer amortize. We
periodically review our intangible assets for possible
indicators of impairment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June&nbsp;2001, the FASB issued SFAS
No.&nbsp;143, &#147;Accounting for Asset Retirement
Obligations.&#148; This statement addresses financial and
reporting obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. It
applies to legal obligations associated with the retirement of
long-lived assets that result from acquisition, construction,
development and/or the normal operation of a long-lived asset,
except for certain obligations of lessees. This statement is
effective for financial statements issued for fiscal years
beginning after June&nbsp;15, 2002. We believe adoption of
SFAS&nbsp;143 will not have a material effect on our financial
position or results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August&nbsp;2001, the FASB issued SFAS
No.&nbsp;144, &#147;Accounting for the Impairment or Disposal of
Long-Lived Assets.&#148; SFAS&nbsp;144 supercedes SFAS&nbsp;121
and APB Opinion No.&nbsp;30, &#147;Reporting Results of
Operations Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions.&#148; This statement retains the
fundamental provisions of SFAS&nbsp;121 for recognition and
measurement of impairment, but amends the accounting and
reporting standards for segments of a business to be disposed
of. We adopted the provisions of this statement beginning in
fiscal 2002. We do not believe that the adoption of
SFAS&nbsp;144 will have a material impact on our financial
position or results of its operations.
</FONT>

<P align="left">
<B><FONT size="2">Quantitative and Qualitative Disclosures About
Market Risk</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our market risk exposures are related to our
cash, cash equivalents, investments and interest that we pay on
our debt and senior subordinated notes. We have no derivative
financial instruments or derivative commodity instruments in our
cash, cash equivalents and investments. We invest our excess
cash in investment grade highly liquid short-term investments.
We anticipate investing our net proceeds from this offering in
similar investment grade and highly liquid investments. These
investments are not held for trading or other speculative
purposes. Changes in interest rates affect the investment income
we earn on our investments and, therefore, impact our cash flows
and results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of our transactions are conducted, and our
accounts are denominated, in United States dollars. Accordingly,
we are not exposed to foreign currency risk.
</FONT>

<P align="left">
<B><FONT size="2">Inflation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The primary inflationary factors affecting our
business are food and labor costs. A large number of our
restaurant personnel are paid at rates based on the applicable
minimum wage, and increases in the minimum wage will directly
affect our labor costs. Many of our leases require us to pay
taxes, maintenance, repairs, insurance and utilities, all of
which are generally subject to inflationary increases. We
believe that inflation has not had a material impact on our
results of operations in recent years.
</FONT>

<P align="center"><FONT size="2">30
</FONT>
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<!-- link1 "<FONT size="2">BUSINESS</FONT>" -->
<DIV align="left"><A NAME="011"></A></DIV>

<P align="center">
<B><FONT size="2">BUSINESS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We own and operate 66 fast casual restaurants in
11&nbsp;states and the District of Columbia. <I>Cos&#237;
</I>restaurants are all-day caf&#233;s that feature signature
bread and coffee products in an environment we adjust
appropriately throughout the day. <I>Cos&#237; </I>restaurants
offer breakfast, lunch, afternoon coffee, dinner, and dessert
menus full of creative, cravable foods and beverages. From
Cos&#237; <I>Squagels&#174; </I>(square bagels made from
Cos&#237; bread) to our award-winning sandwiches and pizzas,
Cos&#237; has developed featured foods that are built around our
secret, generations-old recipe for crackly crust flatbread.
These products are freshly baked in front of our customers
throughout the day in open flame stone hearth ovens prominently
located in each of our restaurants. Our coffees are freshly
brewed and expertly prepared by our baristas and bartenders. Our
coffee beverages range from simple Cos&#237; brews and
traditional lattes to our innovative Double Oh Arctic Mochas and
specialty coffee cocktails, featuring the <I>Mocha
Kiss&#174;</I>. We offer friendly and attentive service in a
warm and inclusive atmosphere. Our vision is to become
America&#146;s favorite caf&#233; by giving every customer
something to look forward to in their day.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We operate our restaurants in two formats:
<I>Cos&#237; </I>and <I>Cos&#237; Downtown.</I> All of our
restaurants offer breakfast, lunch and afternoon coffee in a
counter service format. After 5&nbsp;p.m., our <I>Cos&#237;
</I>restaurants add table service and offer dinner and dessert
in a casual dining format. <I>Cos&#237; Downtown</I>
restaurants, which are located in non-residential central
business districts close, for the day, in the early evening. All
of our restaurants are designed to be welcoming and comfortable,
featuring oversized sofas, chairs and tables, and faux painted
walls. The atmosphere of Cos&#237; is appropriately managed for
each daypart by changing the music, both style and volume, and
lighting throughout the day. The design scheme of our counters
and bars, menu boards as well as condiment counters and server
stations incorporate warm colors and geometric patterns,
intended to create a visual vocabulary that can be easily
identified by our customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our restaurants are located in a wide range of
markets and trade areas, including business districts and
residential communities in both urban and suburban locations. We
believe that we have created significant brand equity in our
markets and that we have demonstrated the appeal of our concept
to a wide variety of customers. We opened 17&nbsp;restaurants in
2001, including seven restaurants in the fourth quarter, and
expect to open approximately 30 to 35&nbsp;restaurants in 2002
and approximately 53 to 59&nbsp;restaurants in 2003 by expanding
our presence in existing markets and selectively entering new
markets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that the flexibility of our multiple
daypart model, the appeal of our high quality, innovative
product offering, and our ability to operate in a wide variety
of real estate markets have created an attractive restaurant
model, providing us with considerable growth opportunities to
develop our brand nationwide.
</FONT>

<P align="left">
<B><FONT size="2">History</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cos&#237; was created through the
October&nbsp;1999 merger of two restaurant concepts, Cos&#237;
Sandwich Bar, Inc. and Xando, Incorporated. Each company served
a similar customer, but focused on different parts of the day.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cos&#237; Sandwich Bar.
</FONT></I><FONT size="2">The Cos&#237; Sandwich Bar concept was
created in Paris in the early 1990&#146;s and brought to the
United States by us in 1996. Cos&#237; Sandwich Bar signature
&#147;crackly crust&#148; flatbread, derived from a
generations-old Italian recipe, was prepared daily at each
restaurant where fresh loaves were baked throughout the day.
Cos&#237; Sandwich Bar focused on selling sandwiches in high
density central business districts in New York, Washington DC,
Boston and Philadelphia. Cos&#237; Sandwich Bar received
numerous awards, including Time Out New York&#146;s
#1&nbsp;Sandwich and Nation&#146;s Restaurant News &#147;Hot
Concept.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Xando Coffee and Bar.
</FONT></I><FONT size="2">Xando Coffee and Bar, founded in 1994,
was an innovative concept that went beyond the traditional
specialty coffee bar. Xando Coffee and Bar locations were open
for five dayparts. The 5&nbsp;p.m. &#147;unveiling&#148; of a
full liquor bar featured coffee cocktails and was intended to
create a dynamic evening environment. The atmosphere of Xando
Coffee and Bar was adjusted appropriately for each daypart by
changing the music and lighting throughout the day. The evening
environment was completed by the addition of table service.
Xando Coffee and Bar received numerous awards, including
Innovative Concept of the Year from the Connecticut Restaurant
Association.
</FONT>

<P align="center"><FONT size="2">31
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Over the last two years during the development of
our concept, we added Cos&#237; Sandwich Bar products to the
Xando Coffee and Bar five daypart platform. We believe we have
created a restaurant concept that satisfies our customers&#146;
needs from <I>Wake Up Call to Last Call&#174;</I>. In 2001,
Restaurant Hospitality Magazine selected Cos&#237; as one of
America&#146;s Premier Concepts of Tomorrow.
</FONT>

<P align="left">
<B><FONT size="2">Industry Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cos&#237; competes in the fast casual segment of
the restaurant industry. This segment is characterized by a
higher quality, healthier menu selection than offered at quick
service restaurants as well as by a less expensive and more time
efficient experience than typically found at casual dining
restaurants. It is estimated by NPDFoodworld, an independent
industry market research firm, that the fast casual segment
constituted only approximately 2% of the restaurant
industry&#146;s 2000 domestic volume. The 2002 restaurant
industry&#146;s sales are estimated by the National Restaurant
Association, to approach approximately $408 billion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">According to NPDFoodworld, in 2001, the fast
casual segment grew by 12%, comprised of a 9% increase in
traffic and a 3% increase in average check.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that the fast casual segment will
continue to grow faster than the overall restaurant industry as
a result of a number of social, demographic and lifestyle
trends, including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">longer working hours, an increase in dual income
	families and the aging of the Baby Boomer population result in
	more frequent dining out as well as an increased premium on
	consumers&#146; time;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">more sophisticated consumer tastes characterized
	by desire for newer, fresher and higher quality products; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">a generally more health conscious society.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our average check in 2001 of $6.37 is comparable
to the average check in 2001 of $6.19 of Panera Bread Company, a
relevant fast casual competitor, as reported in its 2001 annual
report on Form&nbsp;10-K filed with the SEC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe the fast casual segment is highly
fragmented. We also believe that, with no clear leader and no
national brand in the fast casual segment, there is considerable
opportunity for expansion and for the development of a leading
nationwide brand.
</FONT>

<P align="left">
<B><FONT size="2">Concept and Business Strategy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our objective is to build a nationwide system of
distinctive restaurants that generate attractive unit economics
by appealing to a broad range of customers across five dayparts:
breakfast, lunch, afternoon coffee, dinner and dessert. Inherent
in this objective is our ability to leverage our core
competencies in both bread and coffee by offering creative,
cravable products during each daypart, reinforcing the Cos&#237;
brand and creating a loyal customer base. To achieve this
objective, we intend to utilize the following strategies:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Build Awareness of the Cos&#237; Brand.
</FONT></I><FONT size="2">We believe that the Cos&#237; name has
achieved substantial brand equity among our customers and has
become well known within our markets for our signature bread and
coffee products, most notably, our award winning crackly crust
flat bread, the foundation of every Cos&#237; sandwich. We
intend to strengthen this brand loyalty by continuing to offer
new menu items based on these signature products, while
delivering what we believe to be a consistently memorable
customer experience. Additionally, we believe that the Cos&#237;
name has become representative of the &#147;cozy&#148; feel of
our restaurants, which feature comfortable seating and a warm,
inclusive atmosphere. Further, we prominently feature our sun
and moon logo on our exterior signage, marketing materials and
packaging, in order to emphasize that our customers can visit
Cos&#237; throughout the day.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Provide a Menu Offering Full of Creative,
Cravable Foods and Beverages.</FONT></I><FONT size="2"> We offer
proprietary bread and coffee products for all five dayparts. All
of our signature bread products are made from scratch on
premises in front of the customer and baked fresh in our open
flame stone hearth oven all day. We believe that our extensive
caf&#233; menu of cravable proprietary products distinguishes us
from our competition. Our food
</FONT>

<P align="center"><FONT size="2">32
</FONT>
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<DIV align="left">
<FONT size="2">menu features Cos&#237; <I>Squagels&#174;</I>
(square bagels made from Cos&#237; bread), sandwiches, salads,
soups, <I>Cos&#237;-dillas</I><SUP>TM</SUP> (Cos&#237;&#146;s
version of the Mexican classic), <I>Cos&#237;
Corners</I><SUP>TM</SUP> and other appetizers,
<I>Warm&nbsp;n&#146; Cos&#237; Melts</I><SUP>TM</SUP>, pizzas,
s&#146;mores and other desserts. Our beverage menu features a
full line of coffee beverages, teas, Arctic smoothies, mochas
and lattes, <I>Screamers</I>&#174; (coffee beverages topped with
ice cream) and our signature coffee cocktails. A wide range of
our products, including: Cos&#237; Squagel baskets, fresh fruit
platters, Cos&#237; Sandwich baskets, Salads, and Dessert
Platters, are available outside of the four walls of our
restaurants through our catering services. We maintain a
pipeline of new menu offerings that are systematically
introduced in order to keep our products relevant to consumers
in each daypart.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Capitalize on Proven Multiple Daypart Model.
</FONT></I><FONT size="2">By operating in multiple dayparts, we
are able to maximize revenues and leverage both development and
operating costs. Cos&#237; selects sites that experience strong
traffic in at least three of five dayparts. We believe that our
core competencies in bread and coffee create a foundation of
products suitable for each daypart. The ambiance, through
adjustments of lighting and music, is also managed to be
appropriate and different for each daypart. We believe our
versatility has allowed us to build strong customer loyalty with
a high percentage of repeat business. Additionally, as we
continue to enhance our product offering in each daypart, our
new restaurant average unit volumes have significantly
increased. During 2001, despite the negative impact of
September&nbsp;11th across all of our restaurants, average sales
for restaurants opened from 1994 to 1999 were approximately
$1,040,000 and average sales for restaurants opened in 2000 were
approximately $1,400,000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Operate in Multiple Real Estate Paradigms.
</FONT></I><FONT size="2">Our restaurants are located in a wide
range of markets and trade areas, which include business
districts and residential communities in both urban and suburban
locations. We believe that this demonstrates the flexibility of
our restaurant designs and the appeal of our concept to a wide
variety of consumers. Through our development of the
<I>Cos&#237; </I>and <I>Cos&#237; Downtown </I>formats in both
existing and new markets, we believe we have the platform to
expand in multiple real estate paradigms in order to maximize
financial performance.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Provide a High Level of Customer Service.
</FONT></I><FONT size="2">Cos&#237; recognizes that a key to a
positive customer experience is the customer&#146;s interaction
with our partners. We dedicate significant time and resources to
our partners&#146; experience through our &#147;Life of the
Partner&#148; program to focus on every aspect of a
partner&#146;s development with us, from sourcing, selection and
hiring to orientation, training, continuing education,
performance evaluation and promotion. Specifically, we offer our
partners industry-competitive benefits and equity incentives and
we use a selection system built around a success predicting
testing program. Our training processes focus on teaching
partners to deliver exceptional products with personalized,
friendly service, while driving financial results through
concentration on increasing sales and managing profitability.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Leverage our Infrastructure.
</FONT></I><FONT size="2">Cos&#237; has a deep management
infrastructure led by seasoned professionals from both the
retail and the restaurant industries. We believe that this
management team, combined with our founder driven culture,
provides Cos&#237; with the right chemistry and experience to
execute our growth plans. In addition, we have made a
substantial investment in an application service provider model,
which allows us to maintain advanced technology without the need
to continually re-invest in infrastructure and personnel. We
believe our management and systems infrastructure will allow us
to manage our growth without any further significant investment
in information systems, equipment or personnel.
</FONT>

<P align="left">
<B><FONT size="2">Growth</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that there are significant
opportunities to expand our concept and brand on a nationwide
basis. In addition to new restaurant growth, we believe that we
will increase average unit volumes through the launch of new
menu segments, product innovations and catering sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">New Unit Growth. </FONT></I><FONT size="2">The
addition of new restaurants has been our primary source of
growth historically and we anticipate that it will be the
primary source of growth in the near term. We believe that we
have adopted a manageable growth strategy and intend to develop
many of our new restaurants in our existing markets, and
selectively enter new markets, to gain operational efficiencies,
enhance convenience for our customers and increase brand
awareness. Cos&#237; does not utilize a commissary system and
thus our expansion is not restricted by geographic proximity to
commissary kitchens. Our site selection criteria is flexible and
</FONT>

<P align="center"><FONT size="2">33
</FONT>

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<DIV align="left">
<FONT size="2">allows us to adapt to a wide variety of real
estate paradigms including central business districts, urban and
suburban residential locations and suburban shopping centers.
Because the Cos&#237; concept leverages five major dayparts, we
expect that we will develop restaurants in all of these real
estate paradigms so that a Cos&#237; restaurant will be
available where people live, work and play.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We plan to open approximately 30 to 35&nbsp;new
restaurants during the remainder of fiscal 2002, and
approximately 53 to 59&nbsp;new restaurants in fiscal 2003. We
expect that the majority of our restaurants to be opened in the
future will be in the <I>Cos&#237; </I>all-day format.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Increased Average Unit Volumes.
</FONT></I><FONT size="2">We plan to increase sales at our
restaurants by expanding our food and drink selections,
leveraging each of the five dayparts: breakfast, lunch,
afternoon coffee, dinner and dessert. We maintain a pipeline of
new menu segments and product launches which are systematically
introduced in order to keep our product offerings relevant to
consumers in each daypart, drive customer frequency and increase
our average check. Additionally, Cos&#237; catering provides us
with an additional channel for growth outside of the four walls
of the restaurant. Due to the absence of a national catering
brand, we believe Cos&#237; has the opportunity to build a
nationally recognized catering business with our restaurants
serving as distribution points.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">With the implementation of this strategy, our new
restaurant average unit volumes have significantly increased.
During 2001, despite the negative impact of September&nbsp;11th
across all of our restaurants, average sales for restaurants
opened from 1994 to 1999 were approximately $1,040,000 and
average sales for restaurants opened in 2000 were approximately
$1,400,000.
</FONT>

<P align="left">
<B><FONT size="2">Expansion Strategy and Site
Selection</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our site selection criteria focuses on
identifying markets, trade areas, intersections and specific
sites that yield the greatest density of desirable demographic
indicators, heavy pedestrian and vehicular traffic patterns, and
a highly visible site. In order to maximize our market
penetration potential we have developed flexible physical site
criteria that allow us to meet the siting specifics of
individual markets as they uniquely present themselves. Our
restaurants operate in a range of paradigms including: urban
central business district, urban residential and suburban
locations. Sites are specifically selected within these
paradigms where there are strong generators for at least three
of the five dayparts. Our prototype restaurant is
2,700&nbsp;square feet. Current locations range from
approximately 1,800 square feet to approximately
4,000&nbsp;square feet.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cos&#237; restaurants are designed to be
welcoming and comfortable, combining elements of an efficient,
fast-paced counter-service concept with those of a cozy and
inviting table service caf&#233;. Inside each restaurant, the
steel-encased open flame stone-hearth oven sits in a prominent
position with its flame visible to customers throughout the day.
Our restaurants feature oversized sofas, contemporary chairs and
tables, and faux painted walls. Lighting and music, which change
throughout the day, are also key elements in creating the
inviting Cos&#237; atmosphere. The design scheme of the counters
and bars, menu boards as well as condiment counters and server
stations use warm colors and geometric patterns intended to
create an identifiable visual vocabulary and recognizable trade
dress. All of the counters in our restaurants are modular, which
provides flexibility in design. A signature of each Cos&#237;
location is a painted mural, which covers the liquor display.
The liquor bar is hidden during the day and is unveiled at
5&nbsp;p.m., transforming <I>Cos&#237;</I> into an energetic
evening caf&#233;. Each <I>Cos&#237; </I>exterior features
prominent signage that clearly displays our trade name and sun
and moon logo and the monikers &#147;Breakfast,&#148;
&#147;Lunch,&#148; &#147;Dinner&#148; and &#147;Dessert.&#148;
The exterior signage for <I>Cos&#237; Downtown </I>restaurants
displays the Cos&#237; Downtown name, the sun and moon logo and
the monikers &#147;Breakfast,&#148; &#147;Lunch&#148; and
&#147;Catering.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Existing Locations.
</FONT></I><FONT size="2">All of our restaurants are located on
leased properties. Each lease typically has a 10&nbsp;year base
rent period, with various renewal options. Each lease requires a
base rent, and some locations provide for contingent rental
payments. At most locations, we reimburse the landlords for a
proportionate share of either the landlord&#146;s taxes or
yearly increases in the landlord&#146;s taxes.
</FONT>

<P align="center"><FONT size="2">34
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table depicts existing restaurants,
by region as of April&nbsp;1, 2002:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="64%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="17%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Street Address</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">City</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Format</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Northeast:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">103 Pratt Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Hartford, CT
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;&nbsp;(a)
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">338 Elm Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New Haven, CT
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">970 Farmington Avenue
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">W. Hartford, CT
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">133 Federal Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Boston, MA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">53 State Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Boston, MA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">14 Milk Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Boston, MA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2160 Broadway
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">504 Avenue of the Americas
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">257 Park Avenue South
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">165 East 52nd Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">38 East 45th Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">11 West 42nd Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">60 East 56th Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3 World Financial Center&nbsp;(b)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">55 Broad Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">54 Pine Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1633 Broadway
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">61 West 48th Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">202 West 36th Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3 East 17th Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">685 Third Avenue
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">461 Park Avenue South
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">279 Main Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Huntington, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">50 Purchase Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Rye, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">38 East 51st Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">841 Broadway
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">15 S. Moger Avenue
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Mt. Kisco, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">116 Montague Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Brooklyn, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">545 Washington Boulevard
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Jersey City, NJ
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">369 Lexington Avenue
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New York, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">77 Quaker Ridge Road
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">New Rochelle, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1298 Boston Post Road
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Larchmont, NY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Mid-Atlantic:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">235 South 15th Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Philadelphia, PA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">325 Chestnut Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Philadelphia, PA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(a)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Currently operating as a Xando Coffee and Bar
	location.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(b)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Currently closed due to the events of
	September&nbsp;11th.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">35
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="60%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="20%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Street Address</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">City</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Format</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Mid-Atlantic:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1128 Walnut Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Philadelphia, PA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3601 Walnut Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Philadelphia, PA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">761 Lancaster Avenue
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Bryn Mawr, PA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">215 Lombard Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Philadelphia, PA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1700 Market Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Philadelphia, PA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1720 Walnut Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Philadelphia, PA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">King of Prussia Mall
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">King of Prussia, PA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">11909 Democracy Drive
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Reston, VA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3003 N. Charles Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Baltimore, MD
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; (a)
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1350 Connecticut Avenue
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Washington, DC
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1647 20th Street NW
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Washington, DC
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">301 Pennsylvania Avenue SE
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Washington, DC
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; (a)
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2050 Wilson Boulevard
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Arlington, VA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1700 Pennsylvania Avenue
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Washington, DC
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">700 King Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Alexandria, VA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">700 11th Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Washington, DC
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4250 Fairfax Drive
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Arlington, VA
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1919 M Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Washington, DC
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1001 Pennsylvania Avenue NW
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Washington, DC
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">7251 Woodmont Avenue
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Bethesda, MD
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1501 K Street NW
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Washington, DC
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Mid-West:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">116 S. Michigan Avenue
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Chicago, IL
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">57 E. Grand Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Chicago, IL
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">230 W. Washington Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Chicago, IL
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1200 North State Parkway
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Chicago, IL
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">203 North LaSalle Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Chicago, IL
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237; Downtown
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1101 Lake Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Oak Park, IL
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">21-25 East Chicago Avenue
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Hinsdale, IL
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4074 The Strand West
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Columbus, OH
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">301 South State Street
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Ann Arbor, MI
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">101 North Old Woodward Avenue
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Birmingham, MI
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">8775 N. Port Washington Road
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Fox Point, WI
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Cos&#237;
	</FONT></TD>
</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(a)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Currently operating as a Xando Coffee and Bar
	location.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Cos&#237; Products</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We offer proprietary bread and coffee products
for all five dayparts&nbsp;&#151; breakfast, lunch, afternoon
coffee, dinner and dessert. All of our signature bread products
are made from scratch on premises in front of the customers and
baked fresh in our open flame stone hearth oven throughout the
day. These cravable proprietary products provide the basis for
our extensive caf&#233; menu and, we believe, distinguish us
from our competition. Our food menu features Cos&#237;
<I>Squagels&#174;</I> (square bagels made from Cos&#237; bread),
sandwiches, salads, soups, <I>Cos&#237;-dillas</I><SUP>TM</SUP>
(our version of the Mexican classic), <I>Cos&#237;
Corners</I><SUP>TM</SUP> and other appetizers, <I>Warm n&#146;
Cos&#237; Melts</I><SUP>TM</SUP>, pizzas, s&#146;mores and other
desserts. Our beverage menu features a full line of coffee
</FONT>

<P align="center"><FONT size="2">36
</FONT>
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<DIV align="left">
<FONT size="2">beverages, teas, Arctic smoothies, mochas and
lattes, <I>Screamers</I>&#174; (coffee beverages topped with ice
cream), and our signature coffee cocktails.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We regularly introduce new menu segments and
products in order to keep our product offerings relevant to
consumers in each daypart. New recipes are developed by our
executive chef in conjunction with our partner suppliers. These
recipes are thoroughly evaluated, both internally and through
consumer focus groups. New products are intended to drive
customer frequency and average checks, resulting in increased
average unit volumes in new locations and positive same
restaurant sales increases in existing locations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A selection of Cos&#237; signature products is
described below:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cos&#237;
Sandwiches.</FONT></I><FONT size="2"> The foundation of every
Cos&#237; sandwich is our signature crackly crust flatbread,
derived from a generations-old Italian recipe. We prepare dough
daily at each of our restaurants and bake fresh loaves
throughout the day. Our Cos&#237; Bread is then filled with an
innovative mix of ingredients, creating our specialty sandwich
combinations, such as Buffalo Chicken with Blue Cheese
S&#146;bread, Tandoori Chicken with Roasted Red Peppers and
Cos&#237; Vinaigrette and Cranberry Roasted Turkey with Romaine.
In addition to our marketed list of specialty sandwich
combinations, customers can create their own Cos&#237; sandwich
combinations by choosing from the vast array of fresh
ingredients displayed behind glass counters, as they watch
Cos&#237; Bread being baked in our prominently displayed open
flame stone hearth oven. For dinner, we recently introduced
Warm&nbsp;n&#146; Cos&#237; Melts<SUP>TM</SUP>, including the
Cos&#237; Cheese Steak and the Cos&#237; Chicken Parmesan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cos&#237; Coffee and Coffee Cocktails.
</FONT></I><FONT size="2">Cos&#237; Coffee includes a full line
of espresso-based beverages such as lattes, cappuccinos and
mochas as well our proprietary house blend of four Central and
South American coffees. Cos&#237; also features Arctic Mochas
and Lattes, which have become warm weather favorites of our
customers. In the evening, we integrate liquor into our coffee
beverage line and feature a variety of coffee cocktails such as
the <I>Mocha Kiss</I>&#174; (Kahlua, Irish Cream, Grand Marnier,
espresso, steamed milk and chocolate syrup topped with whipped
cream). Cos&#237; partners expertly brew coffee using
state-of-the-art brewing equipment located in each restaurant,
with the exacting standards we believe are necessary to ensure a
great cup every time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cos&#237; Pizza.
</FONT></I><FONT size="2">Cos&#237; Pizza is made from an
intriguingly thin, crispy crust version of our flat bread and
baked in our stone hearth ovens. We use fresh ingredients and a
secret recipe tomato sauce, which carefully balances flavors.
Cos&#237; customer favorites, which include both red and white
pies, feature the classic traditional cheese pizza, as well as
our specialty Grilled Chicken and Caramelized Onions, Goat
Cheese and Roasted Red Peppers, and Bruschetta Pizzas.
Additionally, we offer a variety of traditional and specialty
toppings that enable our customers to build their own pizza. At
11 inches round, Cos&#237; Pizzas make a satisfying course for
one, or a shareable portion of a larger meal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After the introduction of Cos&#237; Pizza and our
enhanced dinner menu to existing locations, food sales in the
dinner and dessert dayparts increased approximately 115% in
those locations from the four weeks before the menu launch to a
four-week period in the first quarter of 2002 following the menu
launch.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cos&#237;
Squagels&#174;</FONT></I><FONT size="2">. Cos&#237;
<I>Squagels&#174;</I> are square bagels made from fresh
Cos&#237; Bread and baked in our stone hearth ovens every
morning. Cos&#237; <I>Squagels&#174;</I> are a key element of
our breakfast daypart and leverage the popularity of Cos&#237;
Bread and New York style bagels. Cos&#237; <I>Squagels&#174;</I>
come in a variety of flavors, including: Asiago Cheese,
Poppyseed, Sesame, Onion, Everything, Plain, Salt, Cinnamon
Raisin, and Dried Fruit and can be individually prepared by our
partners with a full line of Cream Cheese S&#146;breads.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After the introduction of Cos&#237;
<I>Squagels&#174;</I> to existing locations, sales in the
breakfast daypart increased approximately 30% in those locations
from the four weeks before the product launch to a four-week
period in the first quarter of 2002 following the product launch.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cos&#237; S&#146;mores and S&#146;mmm...oreos.
</FONT></I><FONT size="2">Cos&#237; S&#146;mores is an
interactive dessert, which allows customers to roast their own
marshmallows and melt chocolate over an open flamed hibachi
right at their table. The S&#146;mmm...oreos is a variation on
the S&#146;mores utilizing giant Oreo&#174; cookies instead of
the traditional graham cracker. These products complement our
full dessert offering and appeal to a broad range of customers.
</FONT>

<P align="center"><FONT size="2">37
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cos&#237; Salads.</FONT></I><FONT size="2">
The Cos&#237; Salad offering features the Signature Salad, with
spinach and field greens, gorgonzola cheese, grapes, pistachios,
pears and dried cranberries, and a roasted shallot sherry
vinaigrette, as well as the Chicken Shanghai Salad, with mesclun
lettuce with grilled chicken, Oriental noodles, carrots, and
scallions tossed with low fat Oriental dressing. Our salads are
available in lunch portions or in larger sharable portions for
dinner.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Catering. </FONT></I><FONT size="2">Our
catering menu offers a wide range of products to meet our
customers&#146; needs, including: Cos&#237; <I>Squagel</I>&#174;
baskets, fresh fruit platters, Cos&#237; Sandwich baskets,
Salads, and Dessert Platters. Cos&#237; catering provides us
with an additional channel for growth outside of the four walls
of the restaurant. With the absence of a national catering
brand, we believe Cos&#237; has the opportunity to build a
nationally recognized catering business with our restaurants
serving as distribution points.
</FONT>

<P align="left">
<B><FONT size="2">Unit Economics</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001, despite the negative impact of
September&nbsp;11th across all of our restaurants, average sales
for restaurants opened from 1994 to 1999 were approximately
$1,040,000 and average sales for restaurants opened in 2000 were
approximately $1,400,000. This increase is due to the leveraging
of our multiple daypart strategy, which entailed adding new menu
segments and innovative products throughout our five dayparts in
order to raise sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following graphics depict the percentage of
sales each daypart contributed to our overall sales at our
locations in fiscal 2001. The first graph represents our five
daypart locations and the second graphic represents our three
daypart locations. As shown, <I>Cos&#237; </I>five daypart
restaurants have significant revenues both before and after
5&nbsp;p.m., while the predominance of <I>Cos&#237; Downtown</I>
three daypart restaurants sales occur during the lunch daypart.
As the third graphic depicts, our restaurants have a strong
beverage component. Our beverage to food ratio in 2001 across
all locations is approximately 33% beverage to 67% food, a ratio
resulting in high gross margins. Our gross margin, sales less
cost of goods sold, for restaurants opened the full year of 2001
was 73.4%.
</FONT>

<P align="center">
<IMG src="y59517y59517c1.gif" alt="GRAPH">

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that our restaurants located in the
Washington Metropolitan Statistical Area, or MSA, are most
representative of the restaurants that we expect to develop in
the future. The restaurants located in this
</FONT>

<P align="center"><FONT size="2">38
</FONT>

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<DIV align="left">
<FONT size="2">MSA, our second largest market, with 11 locations
that were open for all of 2001, did not face the combination of
factors that impacted our 16 restaurants in New York Central
Business District locations. Despite the effects of
September&nbsp;11th on this MSA, these restaurants had a
restaurant operating margin of 18.3% in 2001. Please see
&#147;<I>Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations</I>&#148;.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">People</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At the end of the first quarter of fiscal 2002 we
had 1,902 employees, 76&nbsp;of which served in administrative
or executive capacities, 176&nbsp;of which served as restaurant
management personnel, and 1,650&nbsp;of which were hourly
restaurant personnel.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We recognize that our partners are a key to a
positive customer experience. We encourage partners to share a
sense of ownership and mission with management. It is because of
this shared sense of ownership that we call all Cos&#237;
employees &#147;partners.&#148; We have developed the Life of
the Partner model that facilitates a Cos&#237; partner&#146;s
development from initial sourcing and selection to continuing
education and promotion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe we are able to attract highly
qualified and energetic partners at all levels by offering an
industry-competitive catalog of benefits including &#147;My
Slice of the Bread&#148; stock options, continuous internal
growth channels, an Experience Life Bonus, educational
contributions and a 401(k) plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our restaurants are staffed by managers,
certified shift leaders and hourly partners. All Cos&#237;
hourly and management partners complete a predictive test and
interview process which assesses the individual&#146;s
&#147;fit&#148; against our indicators for success, and measures
areas such as drive and energy, service orientation and
leadership abilities. Because of the food delivery system within
the restaurant, all hourly partners have some level of customer
interaction. We have designed the hourly partner hiring profile
to attract people with high-energy, who are customer service
oriented and driven to succeed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have a comprehensive and structured training
program for all hourly functions as well as management
positions. Each hourly partner&#146;s training program begins
with a structured orientation given by a Regional Training
Manager and is followed by a week of position training with a
certified &#147;Commando,&#148; or in-restaurant trainer, and
daily written tests, and continues on every subsequent shift
with the General Manager. The Manager Training Program is
divided into four segments: Position Training, Leadership and
Team Building, Customer Experience Management, and Finance and
Administration. The Manager Training Program focuses on all
aspects of business management, people development and results
orientation measured through demonstrative and skills based
testing. We strive to select and develop well trained business
leaders and talented, motivated partners.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">None of our employees are covered by collective
bargaining agreements, and we have never experienced an
organized work stoppage or strike. We believe that our working
conditions and compensation packages are competitive and
consider relations with our employees to be good.
</FONT>

<P align="left">
<B><FONT size="2">Operations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Management Structure.
</FONT></I><FONT size="2">The restaurant operations team is
built around regional centers, led by a Regional Vice President,
who reports to our Chief Operating Officer. Each Regional Vice
President is responsible for all operations, training,
recruiting and human resources within his or her region. The
Regional Vice Presidents are responsible for the financial plan
for their region and for the people development plan to support
the growth in their region. They oversee all aspects of the
sourcing, selecting, hiring, training and development outlined
in our Life of the Partner program. The Regional Vice Presidents
are responsible for execution of our management systems.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Internal Communication.
</FONT></I><FONT size="2">Our training programs emphasize the
importance of communication between management and hourly
partners on a daily basis. We have developed a succession of
structured communication from the regional level to the hourly
partner level to ensure that all operations initiatives are
communicated and executed effectively. The strength of our
communication process allows us to react swiftly
</FONT>

<P align="center"><FONT size="2">39
</FONT>
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<DIV align="left">
<FONT size="2">to partner and customer feedback. We believe that
this process allows us to maintain consistent restaurant
operations as we grow.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Sales Forecasting.
</FONT></I><FONT size="2">Each of the Regional Vice Presidents
and their District Managers have real time access to sales
forecast and actual sales information in their restaurants
through our web based reporting system. This plan allows
restaurant management teams to plan their staffing requirements
on a weekly, daily and even hourly basis to effectively serve
our customers. We believe the ability of our multi-unit
supervisors to direct changes based on financial results
throughout the week gives us a competitive advantage.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Customer Service Evaluation.
</FONT></I><FONT size="2">During training, Cos&#237; hourly
partners are introduced to our standards of service. In order to
monitor our success in executing to these standards and to give
our hourly partners consistent performance feedback, Cos&#237;
employs an external secret shopping service. Scores and comments
are reviewed with the individual partner who was shopped and
then posted in the restaurant to educate all of the partners.
Our management bonus system includes the scores from these
secret shops. Finally, rankings in critical categories are
distributed company wide by region and district to identify
which restaurants are achieving the highest scores.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Product Quality. </FONT></I><FONT size="2">Our
food and beverage quality is managed at three critical stages:
sourcing, line readiness and product preparation. Products are
delivered several times each week so that all restaurants
maintain fresh, quality products. Because our restaurants serve
a different variety of products during all five dayparts, a
specific line readiness checklist is completed to ensure that
the products have been rotated, prepared and staged correctly.
Finally, our partner-training program includes certification in
both product knowledge and product preparation standards.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Food and Labor Cost Controls.
</FONT></I><FONT size="2">Our information system allows us to
track actual versus theoretical labor and cost of goods sold.
Detailed reports are available at the restaurant level showing
variances on an item-by-item basis. The system is fully
integrated into our accounts payable and general ledger systems
so that restaurant managers have control and can be held
accountable for their results. The restaurant manager&#146;s
bonus includes a component based on food cost variance versus
theoretical costs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cos&#237; has developed a labor management system
that helps our managers control labor and ensures that staffing
levels are appropriate to meet our service standards. This labor
management system provides our multi unit managers with
performance reports on a real time basis that help them make
staffing adjustments during the course of the week. Our system
was developed to maximize labor efficiency and profitability of
the restaurants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that the combination of these
structured restaurant operating systems and technologies allow
our operators to focus their time more effectively on the day to
day drivers of our business.
</FONT>

<P align="left">
<B><FONT size="2">Scaleable Systems Infrastructure</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that our information technology
infrastructure is one of our competitive advantages. We use an
ASP model, which allows us to have the latest in technology and
up to the minute information without continually having to
re-invest in hardware and personnel. Our strategy includes
utilizing web technology to put information into the hands of
the people who need to make decisions in a timely manner.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our point of sale, back-office modules, and our
Oracle financials systems are fully integrated. This integration
allows us to all be working with the same, accurate data with
minimal staffing. All information relating to restaurant
operations is uploaded onto a secure web site five times a day
for review and pre-selected reports are distributed to our
operations team via wireless and e-mail solutions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have a redundancy and back-up plan in place
for all data as well as a disaster recovery plan. The plan
encompasses daily back up, weekly off-site storage, and
redundant facilities.
</FONT>

<P align="left">
<B><FONT size="2">Marketing</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe we enjoy broad appeal among fast
casual customers, who place a high value on quality food,
convenience to home and work, and a good value proposition. We
compete with quick-serve alternatives
</FONT>

<P align="center"><FONT size="2">40
</FONT>
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<DIV align="left">
<FONT size="2">during the day and casual dining restaurants in
the evening, and have developed our menu and pricing
accordingly. Our average check in 2001 of $6.37 is comparable to
the average check in 2001 of $6.19 of Panera Bread Company, a
relevant fast casual competitor, as reported in its 2001 annual
report on Form&nbsp;10-K filed with the SEC.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We focus our marketing efforts on building brand
awareness, increasing customer frequency and growing sales per
visit. We believe awareness of the Cos&#237; brand is primarily
achieved through strong site location, word of mouth and public
relations, as well as leveraging our catering capabilities to
build corporate sales and support key marketing events for our
brand. We have been featured or mentioned in over one thousand
print publications including The&nbsp;Wall Street Journal,
The&nbsp;New York Times and The&nbsp;Washington Post.
Additionally, we have won Time Out New York&#146;s award for New
York&#146;s Best Sandwich, &#147;Hot Concept&#148; by
Nation&#146;s Restaurant News and &#147;Premier Concepts of
Tomorrow&#148; by Restaurant Hospitality Magazine.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We seek to maintain a pipeline of new menu
segments and products, which are systematically introduced onto
our menu in order to keep our product offerings relevant to
consumers in each daypart. Our new menu introductions build on
the successful Cos&#237; platform of proprietary bread and
coffee products offered across multiple dayparts. Successful
introductions like Cos&#237; <I>Squagels&#174;</I>,
Cos&#237;-dillas<SUP>TM</SUP> and <I>Warm&nbsp;n&#146; Cos&#237;
Melts</I><SUP>TM</SUP> have enabled us to maintain strong
consumer interest.
</FONT>

<P align="left">
<B><FONT size="2">Purchasing</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have relationships with some of the
country&#146;s leading food and paper providers to provide our
restaurants with high quality proprietary food items at
competitive prices. We source and negotiate prices directly with
these suppliers. Cos&#237; does not utilize a commissary system
and thus our expansion is not restricted by geographic proximity
to commissary kitchens. Our inventory control system allows each
restaurant to place orders electronically with our master
distributor and then transmit the invoice electronically to our
accounts payable system. Our scalable system eliminates
duplicate work, and we believe gives our management tight
control of costs while ensuring quality and consistency across
all restaurants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our primary suppliers and master distributor have
parallel facilities and systems to minimize the risk of any
disruption of our supply chain.
</FONT>

<P align="left">
<B><FONT size="2">Competition</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The restaurant industry is intensely competitive.
Cos&#237; competes with respect to taste, quality and price of
product offered, customer service, atmosphere, location and
overall guest experience. Our competitors change with each of
the five dayparts, ranging from coffee bars and bakery cafes to
quick service restaurants and casual dining chains. We also
compete with many other restaurants for site locations and
restaurant employees. Although we believe that we compete
favorably with respect to each of our dayparts, many of our
competitors are well established national regional or local
chains, and some have substantially greater financial and other
resources than we do.
</FONT>

<P align="left">
<B><FONT size="2">Intellectual Property</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have the following US Trademark registrations:
&#147;COS&#205;,&#148; &#147;Totally Toasted Almond Mocha,&#148;
<I>&#147;Mocha Kiss,&#148; &#147;Squagels,&#148;</I>
&#147;Xando,&#148; our sun and moon logo, <I>&#147;Wake Up Call
to Last Call,&#148;</I> &#147;Symphony Blend,&#148;
<I>&#147;King of Hearts Blend,&#148;</I> &#147;Xandwich,&#148;
<I>&#147;Generation&nbsp;XO,&#148;</I> and
<I>&#147;Screamers.&#148;</I> We have US&nbsp;Trademark
applications pending for: &#147;Cos&#237; Downtown,&#148;
&#147;Warm&nbsp;n&#146; Cos&#237; Melts&#148; and
<I>&#147;Cos&#237; Corners,&#148;</I> and &#147;Arctic&#148; is
an unregistered trademark.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have registered the trademark
&#147;COS&#205;&#148; in seven foreign jurisdictions with
respect to goods and services. We also have applications pending
for registration for the trademark &#147;COS&#205;&#148; in four
other foreign jurisdictions.
</FONT>

<P align="center"><FONT size="2">41
</FONT>
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<P align="left">
<B><FONT size="2">Government Regulation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our restaurants are subject to regulation by
federal agencies and to licensing and regulation by state and
local health, sanitation, building, zoning, safety, fire and
other departments relating to the development and operation of
restaurants. These regulations include matters relating to
environmental, building, construction and zoning requirements
and the preparation and sale of food and alcoholic beverages.
Our facilities are licensed and subject to regulation under
state and local fire, health and safety codes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Many of our restaurants are required to obtain a
license to sell alcoholic beverages on the premises from a state
authority and, in certain locations, county and/or municipal
authorities. Typically, licenses must be renewed annually and
may be revoked or suspended for cause at any time. Alcoholic
beverage control regulations relate to numerous aspects of the
daily operations of each of our restaurants, including minimum
age of patrons and employees, hours of operation, advertising,
wholesale purchasing, inventory control and handling, and
storage and dispensing of alcoholic beverages. We have not
encountered any material problems relating to alcoholic beverage
licenses to date. The failure to receive or retain a liquor
license in a particular location could adversely affect that
restaurant and our ability to obtain such a license elsewhere.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are subject to &#147;dram shop&#148; statutes
in the states in which restaurants are located. These statutes
generally provide a person injured by an intoxicated person the
right to recover damages from an establishment that wrongfully
served alcoholic beverages to the intoxicated individual. We
carry liquor liability coverage as part of our existing
comprehensive general liability insurance, which we believe is
consistent with coverage carried by other entities in the
restaurant industry. Although we are covered by insurance, a
judgment against us under a dram-shop statute in excess of our
liability coverage could have a material adverse effect on us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our operations are also subject to federal and
state laws governing such matters as wages, working conditions,
citizenship requirements and overtime. Some states have set
minimum wage requirements higher than the federal level.
Significant numbers of hourly personnel at our restaurants are
paid at rates related to the federal minimum wage and,
accordingly, increases in the minimum wage will increase labor
costs. We are also subject to the Americans With Disability Act
of 1990, which, among other things, prohibits discrimination on
the basis of disability in public accommodations and employment.
We are required to comply with the Americans with Disabilities
Act and regulations relating to accommodating the needs of the
disabled in connection with the construction of new facilities
and with significant renovations of existing facilities.
</FONT>

<P align="left">
<B><FONT size="2">Legal Proceedings</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">From time to time, we are a defendant in
litigation arising in the ordinary course of our business,
including claims resulting from &#147;slip and fall&#148;
accidents, claims under federal and state laws governing access
to public accommodations, employment related claims and claims
from guests alleging illness, injury or other food quality,
health or operational concerns. To date, none of such
litigation, some of which is covered by insurance, has had a
material effect on us.
</FONT>

<P align="center"><FONT size="2">42
</FONT>
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<!-- link1 "<FONT size="2">MANAGEMENT</FONT>" -->
<DIV align="left"><A NAME="012"></A></DIV>

<P align="center">
<B><FONT size="2">MANAGEMENT</FONT></B>

<P align="left">
<B><FONT size="2">Executive Officers and Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following contains information concerning our
directors and executive officers:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="43%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Age</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Position</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Andy Stenzler
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">34</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chairman and Chief Executive Officer
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Jay Wainwright
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">31</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">President and Director
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Nick Marsh
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">33</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Operating Officer and Director
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Kenneth S. Betuker
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Financial Officer
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">David Orwasher
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">42</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Development Officer
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Jamie Mattikow
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Vice President of Marketing
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gilbert Melott
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Vice President of People
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Shep Wainwright
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">29</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Vice President of Real Estate
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">James M. Riley, Jr.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Vice President of Store Development
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Charles Gray
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">30</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Vice President of Information Systems
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Terry Diamond
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">63</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Director
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Creed L. Ford, III
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Director
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Eric Gleacher
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">62</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Director
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">D. Ian McKinnon
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Director
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Jeffrey M. Stork
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">46</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Director
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Greg Woolley
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Director
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Andy Stenzler, Chairman and Chief Executive
Officer.</FONT></I><FONT size="2"> Mr.&nbsp;Stenzler was a
founder of our predecessor company, Xando Coffee and Bar in
1994, and was most recently Chairman and Co-Chief Executive
Officer of that company prior to its merger with Cos&#237;
Sandwich Bar, Inc. in 1999. Mr.&nbsp;Stenzler currently serves
as Chairman and Chief Executive Officer. Mr.&nbsp;Stenzler was
named &#145;40&nbsp;under&nbsp;40&#146; by Crain&#146;s New York
Business and listed &#145;35&nbsp;Under&nbsp;35&#146; by New
York Magazine. The Resident Publications&#146; recognized
Mr.&nbsp;Stenzler as one of the &#145;Big&nbsp;100&#146; in
their story on the 100&nbsp;most influential New Yorkers.
Additionally, he was featured in Smart Money Magazine and on the
cover of Entrepreneur Magazine. In 2001, Mr.&nbsp;Stenzler was
named a &#147;Concept of Tomorrow&#148; Visionary by Restaurant
Hospitality magazine. He received a Bachelor of Engineering
degree from the University of Michigan at Ann Arbor in 1990 and
a Masters Degree in Business Administration in Finance and
International Business from the Stern School of Business at New
York University in&nbsp;1994.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Jay Wainwright, President and
Director.</FONT></I><FONT size="2"> Mr.&nbsp;Wainwright, a
founder of Cos&#237; Sandwich Bar, Inc., served as Chairman and
Chief Executive Officer of that entity from its inception in
1996 until its merger with Xando, Incorporated in 1999.
Mr.&nbsp;Wainwright currently serves as President.
Mr.&nbsp;Wainwright received a Bachelor of Arts degree from
Hamilton College. Mr.&nbsp;Wainwright is the brother of Shep
Wainwright and the nephew of Eric Gleacher.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Nick Marsh, Chief Operating Officer and
Director.</FONT></I><FONT size="2"> Mr.&nbsp;Marsh, a founder of
Xando Coffee and Bar, served as President of that entity from
its incorporation in 1994 until the merger with Cos&#237;
Sandwich Bar, Inc. in 1999. Mr.&nbsp;Marsh currently serves as
Chief Operations Officer. Prior to founding Xando Coffee and
Bar, Mr.&nbsp;Marsh was a management consultant with the
strategy firm of Marakon Associates and was Vice President of
Mergers and Acquisitions for Shawmut Bank in Hartford,
Connecticut, for two years. Mr.&nbsp;Marsh graduated from
Princeton University, <I>cum laude,</I> in 1990 with a Bachelor
of Arts degree.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Kenneth S. Betuker, Chief Financial
Officer.</FONT></I><FONT size="2"> Mr.&nbsp;Betuker has served
as Chief Financial Officer of Cos&#237; since May 2000. Prior to
joining Cos&#237;, Mr.&nbsp;Betuker was the Chief Financial
Officer at Noodle Kidoodle, Inc., from 1996 to May 2000, and the
Chief Financial and Administrative Officer of First National
Supermarkets, Inc. (a subsidiary of Royal Ahold,&nbsp;NV), from
1986 to 1996. Mr.&nbsp;Betuker graduated from Cleveland State
</FONT>

<P align="center"><FONT size="2">43
</FONT>

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<DIV align="left">
<FONT size="2">University, <I>cum laude,</I> with a Bachelor of
Science degree, and was awarded a Masters Degree in Business
Administration, with Highest Distinction, from Babson College.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">David Orwasher, Chief Development Officer.
</FONT></I><FONT size="2">Mr.&nbsp;Orwasher joined Cos&#237; as
Chief Development Officer in December&nbsp;2001. From 1996 to
2000, Mr.&nbsp;Orwasher served as Vice President of Development
and Asset Management for the Eastern&nbsp;U.S. for Starbucks
Corporation where he helped build the real estate development
and asset management organization and helped open over four
hundred stores in numerous markets in the Eastern&nbsp;U.S.
Prior to joining Cos&#237;, from 2000 to 2001, he served as the
Chief Development Officer for Zoots, a dry cleaning company
founded by Tom Stemberg and Todd Krasnow of Staples, Inc. Before
joining Starbucks, Mr.&nbsp;Orwasher spent five years as
Associate Counsel and Director of Leasing and Brokerage for the
Breslin Realty Development Corp., in addition to spending
approximately five years with the real estate group at Marriott
International, Inc. and two years with the Hershey Foods
Corporation, Friendly Restaurant Division. Mr.&nbsp;Orwasher is
a graduate of Vassar College, receiving a Bachelor of Arts
degree in Environmental Science, and earned he a Juris Doctor
degree from Pace University. He is a licensed attorney and is
admitted to practice in the states of New York and Connecticut.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Jamie Mattikow, Vice President of
Marketing.</FONT></I><FONT size="2"> Mr.&nbsp;Mattikow has
served as our Vice President of Marketing since May 2001. Prior
to joining Cos&#237;, Mr.&nbsp;Mattikow was Sr.&nbsp;Vice
President of Marketing for Seagram Beverage Company, a division
of Joseph&nbsp;E. Seagram and Sons&nbsp;Inc., from May 1998 to
April 2001. From January 1992 to April 1998, he was with Kraft
Foods, Inc., where he held positions ranging from Brand Manager
and Marketing Director, to Category Business Director.
Mr.&nbsp;Mattikow received a Masters Degree in Business
Administration from Columbia University School of Business with
a dual concentration in Finance and Marketing. He also received
a Bachelor of Arts degree in Economics and Political Science
from Lafayette College in&nbsp;1986.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Gilbert Melott, Vice President of
People.</FONT></I><FONT size="2"> Mr.&nbsp;Melott has served as
our Vice President of Human Resources and Training since
December&nbsp;2001. From December&nbsp;1995 to
November&nbsp;2001, he was with Bennigan&#146;s, as Executive
Director of Training and as Vice President of People, Process
and Education. Prior to joining Bennigan&#146;s, Mr.&nbsp;Melott
was a Division Director of Human Resources at Sheraton Holding
Corporation in Boston and spent four years as Divisional
Training and Development Manager at TGI&nbsp;Friday&#146;s.
Mr.&nbsp;Melott is a nationally recognized expert in
generational workplace studies and recipient of Industry of
Choice awards for achievement in training and education.
Mr.&nbsp;Melott received a Bachelors of Science degree in
Marketing and Organizational Communication from Fordham
University in&nbsp;1985.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Shep Wainwright, Vice President of Real
Estate.</FONT></I><FONT size="2"> Mr.&nbsp;Wainwright, a founder
of Cos&#237; Sandwich Bar, Inc., served as President of that
entity from its inception in 1996 until the merger with Xando,
Incorporated in 1999. Mr.&nbsp;Wainwright currently serves as
Vice President of Real Estate. Mr.&nbsp;Wainwright graduated
from Hamilton College, <I>cum laude,</I> in 1995 with a Bachelor
of Arts degree. Mr.&nbsp;Wainwright is the brother of Jay
Wainwright and the nephew of Eric Gleacher.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">James&nbsp;M. Riley, Jr., Vice President of
Store Development.</FONT></I><FONT size="2"> Mr.&nbsp;Riley has
served as our Vice President of Store Development since May
2000. Prior to joining Cos&#237;, he was Chief Development
Officer for Corners, Inc. from January 1998 to April&nbsp;2000.
Prior to joining Corners, Mr.&nbsp;Riley was with Boston
Chicken, Inc. and Einstein Bros. Bagels, where he participated
in opening over 200&nbsp;locations. Mr.&nbsp;Riley has a
Bachelors degree in Construction Management and Architectural
Engineering from Wentworth Institute of Technology in Boston,
Massachusetts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Charles Gray, Vice President of Information
Systems.</FONT></I><FONT size="2"> Mr.&nbsp;Gray currently
serves as our Vice President of Information Systems, and has
been with Cos&#237; since September 1998. Mr.&nbsp;Gray is a ten
year veteran in the food service industry having served as
Director of Training for RANCH&nbsp;*1, Inc. from 1996 to 1998,
Director of Operation Services for Einstein Bros. Bagels from
1995 to 1996, and Assistant Director of Training for Boston
Market Corporation from 1992 to 1995. Mr.&nbsp;Gray is a
graduate of the State University of New York at Albany.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Terry Diamond,
Director.</FONT></I><FONT size="2"> Mr.&nbsp;Diamond, a director
since April&nbsp;1998, has served as Chairman of Talon Asset
Management, which manages individual investment advisory
accounts and is the sub-agent with
</FONT>

<P align="center"><FONT size="2">44
</FONT>

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<DIV align="left">
<FONT size="2">investment responsibility for the ABN Amro Talon
Fund, since 1996. Mr.&nbsp;Diamond is also the Managing Member
of Talon Opportunity Partners LLC, as well as the General
Partner of Talon Opportunity Partners,&nbsp;L.P.
Mr.&nbsp;Diamond has acted as a consultant and board member to
many private, public, and philanthropic organizations.
Currently, he is a Board Member of Venetec International, Inc.
and PlayNetwork, Inc. Mr.&nbsp;Diamond received a Bachelor of
Science degree from the University of Michigan in 1960 and a
Juris Doctor degree from the University of Chicago Law School
in&nbsp;1963.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Creed L. Ford, III,
Director.</FONT></I><FONT size="2"> Mr.&nbsp;Ford has been a
director since March 1997. Mr.&nbsp;Ford has been Chairman and
Co-Chief Executive Officer of Fired Up, Inc., the parent company
of Johnny Carino&#146;s Country Italian restaurants and
Gumbo&#146;s Louisiana Style Caf&#233; since 1997, and the
President of Ford Restaurant Group, a Chili&#146;s
Grill&nbsp;&#38; Bar franchisee, since 1997. From 1976 through
1997, Mr.&nbsp;Ford served in various capacities at Brinker
International, Inc., including Chief Operating Officer. As COO
and Director, Mr.&nbsp;Ford oversaw all operations at Brinker
for all of its restaurant concepts. Mr.&nbsp;Ford serves on the
boards of Rudy&#146;s&nbsp;BBQ, Texas Restaurant Association
Education Foundation, Texas&nbsp;A&#38;M Center of
Entrepreneurship and Fired&nbsp;Up,&nbsp;Inc.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Eric Gleacher,
Director.</FONT></I><FONT size="2"> Mr.&nbsp;Gleacher has been a
director since 1996 and has been Chairman of Gleacher
Partners&nbsp;LLC since 1990. Mr.&nbsp;Gleacher founded the
M&#38;A department at Lehman Brothers Inc. in 1978 and headed
Global Mergers and Acquisitions at Morgan Stanley from 1985 to
1990. He currently serves on the boards of the University of
Chicago and New York University and is Secretary of the United
States Golf Association. Mr.&nbsp;Gleacher received a Masters of
Business Administration from the University of Chicago and a
Bachelor of Arts from Northwestern University and served as a
U.S.&nbsp;Marine Infantry Officer in the 1960s.
Mr.&nbsp;Gleacher is the uncle of Jay and Shep&nbsp;Wainwright.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">D.&nbsp;Ian McKinnon,
Director.</FONT></I><FONT size="2"> Mr.&nbsp;McKinnon has been a
director since 2000, and is a Partner of Ziff Brothers
Investments,&nbsp;L.L.C. He is also the President of ZBI
Equities,&nbsp;L.L.C., ZBI&#146;s domestic public equity
investment adviser with several billion dollars under
management. He currently also serves on the Board of Trustees of
Occidental College. Mr.&nbsp;McKinnon received a Masters Degree
in Business Administration from the Harvard Business School,
with High Distinction as a George&nbsp;F. Baker Scholar. He
graduated <I>summa cum laude</I> and Phi Beta Kappa from
Occidental College, with a Bachelor of Arts degree in Public
Policy.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Jeffrey M. Stork,
Director.</FONT></I><FONT size="2"> Mr.&nbsp;Stork has been a
director since March 1995. Mr.&nbsp;Stork was most recently
President and Chief Executive Officer of The&nbsp;StonCor Group
from 1983 to 2000. Currently, Mr.&nbsp;Stork is the Managing
Partner of Forms+Surfaces,&nbsp;LLC, a national architectural
products manufacturer. He currently serves on the boards of
Sequel Genetics, Inc. and Forms+Surfaces&nbsp;LLC.
Mr.&nbsp;Stork earned a Bachelor of Science degree in Chemical
Engineering from Lehigh University.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Greg Woolley,
Director.</FONT></I><FONT size="2"> Mr.&nbsp;Woolley has been a
director since June&nbsp;2001 and is Chief Executive Officer and
a Director of the LJCB Investment Group. LJCB is one of
Australia&#146;s leading private investment houses. Prior to
this, Mr.&nbsp;Woolley practiced mergers and acquisitions with
Macquarie Bank Limited. Mr.&nbsp;Woolley currently serves on the
Boards of Issues and Images, an Australian marketing
communications company, and the Australian Museum of
Contemporary Art. Mr.&nbsp;Woolley received a Bachelor of
Commerce degree and a Bachelor of Law degree, with Honours, from
the University of Tasmania.
</FONT>

<P align="left">
<B><FONT size="2">Board of Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The board of directors currently consists of nine
directors, three of whom are employed by Cos&#237;. Our
certificate of incorporation provides for our board to be
divided into three classes of directors serving staggered three
year terms. The terms of office of the directors will expire as
follows: Andy Stenzler (Class&nbsp;I director) in 2005; Jay
Wainwright (Class&nbsp;II director) in 2004; Nick Marsh
(Class&nbsp;III director) in 2003; Terry Diamond (Class&nbsp;III
director) in 2003; Creed Ford (Class&nbsp;II director) in 2004;
Eric Gleacher (Class&nbsp;II director) in 2004; D.&nbsp;Ian
McKinnon (Class&nbsp;I director) in 2005; Jeffrey Stork
(Class&nbsp;I director) in 2005; and Greg Woolley
(Class&nbsp;III director) in&nbsp;2003.
</FONT>

<P align="center"><FONT size="2">45
</FONT>
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<P align="left">
<B><FONT size="2">Board Committees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Compensation
Committee.</FONT></I><FONT size="2"> The compensation committee
of our board of directors recommends, reviews and oversees the
salaries, benefits and option plans for our employees,
consultants and other individuals compensated by us. The members
of the compensation committee are Ian McKinnon, Jeffrey Stork
and Eric&nbsp;Gleacher.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Audit Committee.</FONT></I><FONT size="2"> The
audit committee of our board of directors reviews, acts on and
reports to our board with respect to various auditing and
accounting matters, including the recommendation of our
auditors, the scope of our annual audits, fees to be paid to the
auditors, evaluating the performance of our independent auditors
and our accounting practices. The members of our audit committee
are Jeffrey Stork, Creed Ford and Greg&nbsp;Woolley.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Nominating
Committee.</FONT></I><FONT size="2"> The nominating committee of
our board of directors recommends to our board those individuals
to be nominated as directors. The members of our nominating
committee are Andy Stenzler, Creed Ford and Jeffrey&nbsp;Stork.
</FONT>

<P align="left">
<B><FONT size="2">Compensation of Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We reimburse each director for travel and other
related expenses incurred in attending meetings of the board of
directors and committee meetings.
</FONT>

<P align="left">
<B><FONT size="2">Compensation Committee Interlocks and Insider
Participation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The compensation committee of our board of
directors is comprised of Ian McKinnon, Jeffrey Stork and Eric
Gleacher. None of these individuals was at any time during the
2001 fiscal year or at any other time an officer or employee of
Cos&#237;. No executive officer of Cos&#237; serves as a member
of the board of directors or compensation committee of any
entity which has one or more executive officers serving as a
member of Cos&#237;&#146;s board of directors or compensation
committee.
</FONT>

<P align="left">
<B><FONT size="2">Indemnification and Limitation of Director and
Officer Liability</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to provisions of the Delaware General
Corporation Law, we have adopted provisions in our by-laws and
our certificate of incorporation, which eliminate or limit the
personal liability of directors to Cos&#237; and its
shareholders for monetary damages for breach of fiduciary duty.
Our by-laws also allow us to indemnify our officers and someone
serving at our request as a director, officer, employee,
fiduciary or agent of another corporation or of a partnership,
joint venture, trust or other enterprise to the fullest extent
permitted by Delaware law.
</FONT>

<P align="left">
<B><FONT size="2">Executive Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth information
regarding the total compensation earned during 2001 by our
Chairman and Chief Executive Officer and each of our other four
most highly compensated executive officers.
</FONT>

<P align="center"><FONT size="2">46
</FONT>

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<DIV align="left">
<FONT size="2">&#147;Other annual compensation&#148; includes
perquisites and other personal benefits paid to each of the
officers named below.
</FONT>
</DIV>

<P align="center">
<B><FONT size="2">Summary Executive Compensation Table</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Long Term</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Awards</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Annual Compensation</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Securities</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Other Annual</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Underlying</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">All Other</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="left" nowrap><B><FONT size="1">Officer</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Salary</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Bonus</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation (a)</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Andy Stenzler
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">137,500</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,342</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">255,117</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chairman and Chief Executive Officer
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Kenneth S. Betuker
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">215,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,383</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">174,063</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Financial Officer
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">James M. Riley, Jr.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">185,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,578</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">119,167</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Vice President, Store Development
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Jay Wainwright
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">137,500</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,689</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">125,851</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">President
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Nick Marsh
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">137,500</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,342</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">255,117</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Operating Officer
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(a)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The value of perquisites and benefits for each
	named officer does not exceed the lesser of $50,000 or 10% of
	total annual salary and bonus.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Stock Options</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amended and
Restated Cos&#237;, Inc. Stock Incentive Plan</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A total of 8,900,000 shares of our common stock
have been reserved for issuance under the Amended and Restated
Cos&#237;, Inc. Stock Incentive Plan. Shares subject to any
unexercised options granted under the plan, which have expired
or terminated become available for issuance again under the
plan. The plan provides for discretionary grants of incentive
stock options, nonqualified stock options and stock appreciation
rights, or SARs, to our employees and consultants. The exercise
price per share for an incentive stock option may not be less
than 100% of the fair market value of a share of our common
stock on the grant date. The exercise price per share for a
nonqualified stock option may not be less than 85% of the fair
market value of a share of our common stock on the grant date.
The exercise price per share for an incentive stock option
granted to a person owning stock possessing more than 10% of the
total combined voting power of all classes of our stock may not
be less than 110% of the fair market value of a share of our
common stock on the grant date. The aggregate fair market value,
determined on the date of grant, of the shares with respect to
which incentive stock options are exercisable for the first time
during any calendar year under all Cos&#237; plans may not
exceed $100,000. Our compensation committee has full discretion
to administer and interpret the plan, to adopt such rules,
regulations and procedures as it deems necessary or advisable,
and to determine the persons eligible to receive options or
SARs, the time or times at which the options or SARs may be
exercised, and whether all of the options or SARs may be
exercised at one time or in increments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may elect at any time to cancel any option or
SAR granted under the plan, and, in the case of an option, pay
the holder of such option the excess of the fair market value of
the shares subject to the option as of the date of such election
to cancel over the exercise price set forth in the particular
grant agreement, or, in the case of an SAR, the value of the SAR
as of the date of such election. We also may elect at any time
to convert any option granted under the plan to an SAR.
</FONT>

<P align="center"><FONT size="2">47
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1996
Cos&#237; Sandwich Bar, Inc. Incentive Stock Option
Plan</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of April&nbsp;1, 2002, options to purchase
approximately 480,000 shares of our common stock are outstanding
under the Cos&#237; Sandwich Bar, Inc. Incentive Stock Plan.
Shares subject to any unexercised options granted under the
plan, which have expired or terminated become available for
issuance again under the plan. No stock options may be granted
under the plan after October&nbsp;1, 2001. The Cos&#237;
Sandwich Bar, Inc. Incentive Stock Plan provides for
discretionary grants of incentive stock options to certain key
employees. The exercise price per share for an option may not be
less than 100% of the fair market value of a share of our common
stock on the grant date. The exercise price per share for an
incentive stock option granted to a person owning stock
possessing more than 10% of the total combined voting power of
all classes of our stock may not be less than 110% of the fair
market value of a share of our common stock on the grant date.
To the extent that the aggregate fair market value of stock with
respect to which incentive stock options are exercisable for the
first time by an optionee during any calendar year (under this
plan and all of our other incentive stock option plans or our
subsidiaries) exceeds $100,000, such incentive stock option
shall be treated as options which are not incentive stock
options. In the event an optionee&#146;s employment is
terminated by us, other than for cause, such optionee may
exercise any exercisable options under the plan for a period of
30&nbsp;days. In the event an optionee&#146;s employment is
terminated by reason of death, such optionee may exercise any
exercisable options under the plan for a period of
6&nbsp;months. In the event an optionee&#146;s employment is
terminated by us for cause, all options held by such optionee
are immediately cancelled and we may require such optionee to
sell to us, at a sales price equal to the lesser of the exercise
price and the fair market value of the underlying shares, all
shares owned by the optionee which were acquired pursuant to
this plan. The Cos&#237; Sandwich Bar, Inc. Incentive Stock
Option Plan is administered and interpreted by the board of
directors.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cos&#237;
Non-Employee Director Stock Option Plan</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A total of 250,000 shares of our common stock
have been reserved for issuance under the Cos&#237; Non-Employee
Director Stock Option Plan. Shares subject to any unexercised
options granted under the plan, which have expired or terminated
become available for issuance again under the plan. The
Cos&#237; Non-Employee Director Stock Option Plan provides for
discretionary grants of non qualified stock options and SARs to
our non-employee directors. The board of directors has full to
discretion to administer and interpret the plan and full
discretionary authority to determine the non-employee directors
eligible to receive options or SARs, the time or times at which
the options or SARs may be exercised, and whether all of the
options or SARs may be exercised at one time or in increments;
provided, however, the purchase price of shares subject to a
non-qualified stock option shall not be less than 85% of the
fair market value of a share of Cos&#237; common stock on the
grant date. Each optionee under the plan may exercise any
unexpired options or SARs following a change in control of
Cos&#237;, a sale of substantially all of the assets of
Cos&#237;, or shareholder approval of the dissolution of
Cos&#237;.
</FONT>

<P align="center"><FONT size="2">48
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows information concerning
stock options held by each of the officers named below as of
April&nbsp;1, 2002.
</FONT>

<P align="center">
<B><FONT size="2">Option Grants in Last Fiscal Year</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="21%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Potential Realizable</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Individual Grants</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Value at Assumed</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Annual Rates of Stock</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">% of Total</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Price Appreciation for</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Securities</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options Granted</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise or</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Option Term</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Underlying</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">to Employees in</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Base Price</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2" align="left" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options Granted</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">($/Sh)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Expiration Date</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">5%</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">10%</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Andy Stenzler
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">204,094</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">11.6</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">12/31/11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">870,954</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">2,191,788</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chairman and Chief Executive Officer
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Kenneth S. Betuker
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">124,063</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">7.9</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">12/31/11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">529,428</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1,332,326</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Financial Officer
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">James M. Riley, Jr.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">39,167</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">5.4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">7/3/11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">156,593</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">388,545</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Vice President
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Store Development
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Jay Wainwright
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">74,828</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">5.7</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">12/31/11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">319,322</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">803,586</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">President
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Nick Marsh
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">204,094</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">11.6</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">12/31/11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">870,954</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">2,191,788</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Operating Officer
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">Fiscal Year End Option Values</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="24%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Common Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Underlying</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Value of Unexercised</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Unexercised Options at</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">In-the-Money Options at</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Fiscal Year End</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Fiscal Year End</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares Acquired</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2" align="left" nowrap><B><FONT size="1">Officer</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">on Exercise</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Value Realized</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<FONT size="2">Andy Stenzler
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">169,611</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">157,236</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chairman and Chief Executive Officer
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Kenneth S. Betuker
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">214,063</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Financial Officer
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">James M. Riley
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">29,666</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">88,998</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Vice President Store Development
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Jay Wainwright
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">646,175</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">127,071</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">President
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Nick Marsh
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">169,611</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">157,236</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chief Operating Officer
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee
Stock Purchase Plan</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Employee Stock Purchase Plan will become
effective July&nbsp;1, 2002. The purpose of the plan is to
provide employees with an opportunity to purchase our shares
through accumulated payroll deductions. The plan provides for
the grant of stock options to eligible employees. Each employee
will be eligible to participate in the plan commencing on the
first day of the offering period (as described below) occurring
on or after the date on which the employee has been employed by
us for six months. The plan is administered by our compensation
committee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A total of 500,000 shares of common stock are
authorized for issuance under the plan. Any eligible employee
may elect to participate in the plan by authorizing our
compensation committee to make payroll deductions to pay the
exercise price of an option at the time and in the manner
prescribed by our compensation committee. The employee may
designate the amount of the payroll deduction in whole
percentages, up to 10% of the employee&#146;s compensation for
each payroll period in an offering period.
</FONT>

<P align="center"><FONT size="2">49
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">In no event will an employee be granted an option
under the plan that would permit an employee to purchase shares
of our common stock under the plan, to the extent that,
immediately after the grant, such employee (i)&nbsp;would own
common stock and/or hold options to purchase our common stock
possessing 5% or more of the total combined voting power or
value of all classes of our stock, or (ii)&nbsp;has the right to
purchase our common stock during any calendar year having a fair
market value in excess of $25,000. Options are granted at two
six-month offering periods in each calendar year. The date of
grant and the date of exercise for the first option period under
the plan in a given calendar year will be January&nbsp;1 and
June&nbsp;30, respectively, and the date of grant and date of
exercise for the second option period will be July&nbsp;1 and
December&nbsp;31, respectively. The first offering period of the
plan will conclude on December&nbsp;31, 2002. The price of stock
purchased under the plan will be an amount equal to the lesser
of 85% of the fair market value of the stock on the date of
purchase or on the date of commencement of the applicable
offering period.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Executive Contracts, Change-In-Control and
Other Arrangements</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employment
contracts</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have entered into employment agreements with
Messrs.&nbsp;Andy Stenzler, Jay Wainwright, Nick Marsh, Shep
Wainwright and David Orwasher.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Andy Stenzler, Jay Wainwright, Nick Marsh and
Shep Wainwright.</FONT></I><FONT size="2"> The term of each
agreement is for three years with each agreement expiring in
2005, subject to automatic one year extensions, unless we give
such executive at least 180&nbsp;days prior written notice of
non-extension.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The agreements provide that we will pay
Messrs.&nbsp;Stenzler, Jay Wainwright, Marsh and Shep Wainwright
annual base salaries of $225,000, $175,000, $175,000 and
$137,500, respectively, with annual increases as provided in the
respective agreements. Each executive will be eligible to
receive an annual cash bonus, with a target bonus potential
equal to 50% of his respective base salary. Additionally, each
executive will be granted annual options to purchase our common
stock in accordance with our current compensation plan for
senior management, with initial grant targets of 86,400 shares
for each of Messrs.&nbsp;Stenzler, Jay Wainwright, Marsh, and
Shep Wainwright.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The agreements may be terminated by Cos&#237; for
&#147;good cause&#148; or by the executive voluntarily, and will
automatically terminate upon such executive&#146;s death,
disability or retirement. If we do not extend an
executive&#146;s employment period beyond the third anniversary
of the commencement date, or if the agreement is terminated by
us without good cause, or if an executive terminates his
employment for good reason, we must pay the executive
(i)&nbsp;his then current annual base salary and, unless we do
not extend the executive&#146;s employment period beyond the
third anniversary of the commencement date, non-incentive
compensation and provide the executive with his then current
benefits through the greater of two years or the date such
executive&#146;s employment agreement expires, and (ii)&nbsp;an
amount equal to two times the cash bonus calculated at the
greater of 50% of his then current annual base salary or the
actual bonus earned by the executive for the directly preceding
fiscal year, payable in bi-weekly installments over such period.
All options held by the executive become 100% vested as of the
date of termination. In addition, upon a change of control all
outstanding stock options held by the executive shall
automatically become fully vested, regardless of whether the
executive terminates his employment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the executive&#146;s employment agreement is
terminated as a result of his death, disability or retirement,
we are obligated to pay the executive (or his estate, as
applicable) (i)&nbsp;his then current annual base salary,
non-incentive compensation and employee benefits for a period of
one year, and (ii)&nbsp;an amount equal to the executive&#146;s
cash bonus calculated at the greater of 50% of his then current
annual base salary or the actual bonus earned by the executive
for the directly preceding fiscal year, payable in equal each
payday over such one year period. All options held by the
executive become 100% vested upon the executive&#146;s death,
retirement or disability.
</FONT>

<P align="center"><FONT size="2">50
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If any of the payments provided for in the
executive&#146;s employment agreement would be subject to an
excise tax under the Internal Revenue Code, we are required to
pay the executive the amount necessary to fund the payment of
any excise tax the executive is required to pay as well as all
income taxes imposed on such additional payment and any interest
or penalties relating to such payments. However, if a reduction
of $15,000 or less of the amount paid to the executive would
avoid the imposition of any excise tax, then the amount paid to
the executive will be reduced by the amount necessary to avoid
such imposition.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event the executive&#146;s employment is
terminated for good cause or he voluntarily terminates
employment, such executive will be subject to a non-compete
agreement for a period of 24&nbsp;months following the
termination. During this 24&nbsp;month period, the executive
will not directly or indirectly, personally or with other
employees, agents or otherwise, or on behalf of any other
person, firm, or corporation, engage in any restaurant, bar,
coffee shop or similar business within certain operating
criteria and certain defined geographical regions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">David Orwasher. </FONT></I><FONT size="2">The
term of the agreement is for three years expiring in 2005.
Mr.&nbsp;Orwasher will receive a salary of $250,000 for fiscal
year 2002, with annual increases as provided in the agreement.
Mr.&nbsp;Orwasher is also entitled to an annual bonus of not
less than 20% of his base salary. Mr.&nbsp;Orwasher&#146;s
annual cash bonus amount will increase based upon specific
financial performance criteria for restaurants opened at real
estate locations leased or acquired by Cos&#237; during
Mr.&nbsp;Orwasher&#146;s term of employment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After the second anniversary of
Mr.&nbsp;Orwasher&#146;s employment, he is entitled to receive
annual stock option grants in the minimum amount of 62,500
shares, with annual increases as provided in the agreement. If
Mr.&nbsp;Orwasher terminates his employment for &#147;good
reason&#148; or we terminate his employment without
&#147;cause,&#148; then all options granted to Mr.&nbsp;Orwasher
become 100% vested as of the date of termination. Additionally,
Mr.&nbsp;Orwasher will be entitled to receive the following:
(i)&nbsp;any bonus payable pursuant to the agreement when and as
it becomes due, (ii)&nbsp;a severance payment equal to one
year&#146;s gross salary and (iii)&nbsp;continuation of employee
benefits for a period of one year. All stock options granted to
Mr.&nbsp;Orwasher become 100% vested upon the sale of all or
substantially all of the assets or transfer of control of
Cos&#237;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If Mr.&nbsp;Orwasher&#146;s employment agreement
is terminated by us for &#147;cause&#148; all stock options
granted to Mr.&nbsp;Orwasher pursuant to the employment
agreement will terminate immediately. If Mr.&nbsp;Orwasher
resigns (other than for &#147;good reason&#148;) or we terminate
Mr.&nbsp;Orwasher for &#147;cause,&#148; death or disability,
Mr.&nbsp;Orwasher will be entitled to receive all salary and
bonuses due and owing to him to the date of termination, and, in
the event of death or disability, any bonus payable pursuant to
the employment agreement when and as it comes due.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Orwasher has the right to terminate his
employment for &#147;good reason&#148; if there is a change of
control or the business plan is substantially altered.
</FONT>

<P align="center"><FONT size="2">51
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "<FONT size="2">PRINCIPAL SHAREHOLDERS</FONT>" -->
<DIV align="left"><A NAME="013"></A></DIV>

<P align="center">
<B><FONT size="2">PRINCIPAL SHAREHOLDERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents information
regarding the beneficial ownership of our common stock as of
April&nbsp;1, 2002 by: (1)&nbsp;each person who beneficially
owns more than 5% of our common stock; (2)&nbsp;each of our
directors and the executive officers named in the summary
compensation table contained elsewhere in this prospectus; and
(3)&nbsp;all current executive officers and directors as a
group. Beneficial ownership is determined under the rules of the
SEC. These rules deem common stock subject to options or
warrants currently exercisable, or exercisable within
60&nbsp;days, to be outstanding for purposes of computing the
percentage ownership of the person holding the options or of a
group of which the person is a member, but they do not deem such
stock to be outstanding for purposes of computing the percentage
ownership of any other person or group. To our knowledge, except
under applicable community property laws or as otherwise
indicated, the persons named in the table have sole voting and
sole investment control with regard to all shares beneficially
owned. Except as otherwise indicated, the address for each of
the named individuals is c/o Cos&#237;, Inc., 242&nbsp;West 36th
Street, New York, New York 10018.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the following table, percentage ownership for
each shareholder before this offering is based on 19,574,522.57
shares of common stock outstanding as of April&nbsp;1, 2002
which amount includes (i)&nbsp;7,951,364.57 shares of common
stock outstanding as of April&nbsp;1, 2002, (ii)&nbsp;2,005,862
shares of common stock issuable upon conversion of Series&nbsp;A
preferred stock (which will be converted effective upon
consummation of this offering), (iii)&nbsp;9,312,705 shares of
common stock issuable upon conversion of Series&nbsp;C preferred
stock (which will be converted effective upon consummation of
this offering), (iv)&nbsp;256,057 shares of common stock
issuable upon exercise of outstanding warrants at an exercise
price of $.01 per share, (v)&nbsp;44,115 shares of common stock
issuable upon exercise of outstanding warrants at an exercise
price of $8.50 per share (which will be exercised upon
consummation of this offering), and (vi)&nbsp;4,419 shares of
common stock issuable upon exercise of outstanding warrants at
an exercise price of $9.50 per share, which will be exercised
upon consummation of this offering. Shares outstanding at
April&nbsp;1, 2002 excludes 2,932,891 shares of our common stock
issuable upon exercise of outstanding options currently
exercisable or exercisable within 60&nbsp;days at a weighted
average price of $5.18 per share. The percentage ownership for
each shareholder after this offering also gives effect to the
issuance
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our common stock in this offering.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="44%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Shares Beneficially Owned</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Percent Owned</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Percent Owned</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">prior to</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">after this</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">Name and Address</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">this&nbsp;Offering(1)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Offering</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Andy Stenzler
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">786,903.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(2)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Jay Wainwright
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">817,067.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(3)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Nick Marsh
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">786,903.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(4)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Kenneth S. Betuker
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,000.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(5)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">James M. Riley, Jr.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29,666.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(6)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Terry Diamond
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,071</FONT></TD>
	<TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(7)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Creed L. Ford, III
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">470,590.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Eric Gleacher
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">965,711.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(8)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">D. Ian McKinnon
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Jeffrey M. Stork
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,247,177.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(9)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Greg Woolley
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">LJCB Nominees Pty Ltd.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,444,364.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(10)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Kafig Pty Ltd<BR>
	161 Collins Street Melbourne, Australia 3000
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Ziff Asset Management, L.P.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,041,863.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(11)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Ziff Brothers Investments<BR>
	153 E. 53rd Street NY, NY 10022
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">All directors and executive officers as a
	group<BR>
	(16 persons)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><BR><FONT size="2">5,228,721.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(12)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="4%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">*</FONT></TD>
	<TD align="left">
	<FONT size="2">Less than one percent.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="3%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">With respect to each person, percentage ownership
	is calculated by dividing the number of shares beneficially
	owned by such person by the sum of the number of outstanding
	shares at such date and the
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">52
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="3%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="left">
	<FONT size="2">number of shares such person has the right to
	acquire upon exercise of options currently exercisable, or
	exercisable within 60&nbsp;days.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes (i)&nbsp;7,143 shares of common stock
	issuable upon conversion of Series&nbsp;A preferred stock (which
	will be converted effective upon consummation of this offering),
	(ii)&nbsp;549 shares of common stock issuable upon exercise of
	outstanding warrants at an exercise price of $.01 per share
	(which will be exercised effective upon consummation of this
	offering), and (iii)&nbsp;169,611 shares of common stock
	issuable upon exercise of outstanding options at a weighted
	average price of $7.00 per share.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 646,175 shares of common stock issuable
	upon exercise of outstanding options at a weighted average price
	of $3.58 per share.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes (i)&nbsp;7,143 shares of common stock
	issuable upon conversion of Series&nbsp;A preferred stock (which
	will be converted effective upon consummation of this offering),
	(ii)&nbsp;549 shares of common stock issuable upon exercise of
	outstanding warrants at an exercise price of $.01 per share
	(which will be exercised effective upon consummation of this
	offering), and (iii)&nbsp;169,611 shares of common stock
	issuable upon exercise of outstanding options at a weighted
	average price of $7.00 per share.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 10,000 shares of common stock issuable
	upon exercise of outstanding options at a weighted average price
	of $7.00 per share.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(6)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 29,666 shares of common stock issuable
	upon exercise of outstanding options at a weighted average price
	of $7.00 per share.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(7)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes (i)&nbsp;7,143 shares of common stock
	issuable upon conversion of Series&nbsp;A preferred stock owned
	by Mr.&nbsp;Diamond&#146;s wife, (ii)&nbsp;549 shares of common
	stock issuable upon exercise of outstanding warrants at an
	exercise price of $.01 per share owned by
	Mr.&nbsp;Diamond&#146;s wife, (iii)&nbsp;3,622 shares of common
	stock issuable upon conversion of Series&nbsp;C preferred stock
	owned by his wife, and (iv)&nbsp;1,757 shares of common stock
	issuable upon exercise of outstanding warrants at an exercise
	price of $.01 per share owned by the Diamond Family Foundation.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(8)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes (1)&nbsp;244,153 shares of common stock
	issuable upon conversion of Series&nbsp;C preferred stock (which
	will be converted effective upon consummation of this offering)
	and (ii)&nbsp;24,722.07 owned by Mr.&nbsp;Gleacher&#146;s wife,
	Anne.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(9)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes (i)&nbsp;437,704 shares of common stock
	held by JDS Partners (Mr.&nbsp;Stork is a managing member of JDS
	Partners), (ii)&nbsp;25,000 shares of common stock issuable upon
	conversion of Series&nbsp;A preferred stock and 50,000 shares of
	common stock issuable upon conversion of Series&nbsp;A preferred
	stock held by JDS&nbsp;Partners (which will be converted
	effective upon consummation of this offering), and
	(iii)&nbsp;1,923 shares of common stock issuable upon exercise
	of outstanding warrants at an exercise price of $.01 per share
	(which will be exercised effective upon consummation of this
	offering), and 3,846.9 shares of common stock issuable upon
	exercise of outstanding warrants at an exercise price of $.01
	per share held by JDS&nbsp;Partners (which will be exercised
	effective upon consummation of this offering).
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(10)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 1,444,364 shares of common stock
	issuable upon conversion of Series&nbsp;A preferred stock (which
	will be converted effective upon consummation of this offering).
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(11)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 2,823,307 shares of common stock
	issuable upon conversion of Series&nbsp;C preferred stock (which
	will be converted effective upon consummation of this offering)
	and (ii)&nbsp;87,853 shares of common stock issuable upon
	exercise of outstanding warrants at an exercise price of $.01
	per share.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(12)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">These 16 persons include all directors and
	executive officers detailed in the &#147;Management&#148;
	section above. See notes&nbsp;3, 4, 5, 6, 7, 8, and 9 above.
	Includes 9,440&nbsp;shares of common stock issuable upon
	exercise of outstanding options held by Charles Gray at a
	weighted average exercise price of $7.00 per share.
	</FONT></TD>
</TR>

</TABLE>

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<P align="center">
<B><FONT size="2">RELATED PARTY TRANSACTIONS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A member of Cadwalader, Wickersham&nbsp;&#38;
Taft is the father of our President and our Vice President of
Real Estate. Cadwalader, Wickersham&nbsp;&#38; Taft has acted as
our outside counsel since October&nbsp;1999. In fiscal year
2001, the law firm received legal fees and reimbursement of
expenses from us in the amount of $70,825. We engage a public
relations firm that is partially owned by the wife of our Chief
Executive Officer. This firm provides us with public relations
services, for which we paid approximately $146,000 in fiscal
2001. Our Chairman and Chief Executive Officer and our Chief
Operating Officer each issued promissory notes to us in the
amount of $1,362,400, each due in 2005, which accrue interest at
an annual rate of 5.75%, in connection with the purchase of our
preferred shares in 1998.
</FONT>

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<P align="center">
<B><FONT size="2">DESCRIPTION OF CAPITAL STOCK</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our certificate of incorporation authorizes the
issuance of up to 100,000,000 shares of common stock and
40,000,000 shares of preferred stock, 1,000,000 of which are
designated as Series&nbsp;D preferred stock, and 39,000,000
shares of which the rights and preferences may be established
from time to time by our board of directors. Upon completion of
this offering, based on the number of shares outstanding as of
April&nbsp;1,
2002, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of preferred stock will be outstanding. As of April&nbsp;1,
2002, we had approximately 291 record shareholders.
</FONT>

<P align="left">
<B><FONT size="2">Common Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of common stock are entitled to one vote
for each share held on all matters submitted to a vote of
shareholders and do not have cumulative voting rights. Thus,
holders of a majority of the shares of common stock entitled to
vote in any election of directors may elect all of the directors
standing for election. Holders of common stock are entitled to
receive ratably any dividends that may be declared by our board
of directors out of funds legally available for dividends,
subject to any preferential dividend rights of outstanding
preferred stock. If we liquidate, dissolve or wind up, the
holders of common stock are entitled to receive ratably all of
our assets available after payment of all debts and other
liabilities, subject to the prior rights of any outstanding
preferred stock. Holders of common stock have no preemptive,
subscription, redemption or conversion rights or any rights to
share in any sinking fund. The rights, preferences and
privileges of the holders of common stock are subject to, and
may be adversely affected by, the rights of the holders of
shares of any series of preferred stock that we may designate
and issue in the future.
</FONT>

<P align="left">
<B><FONT size="2">Preferred Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our certificate of incorporation authorizes the
issuance of up to 40,000,000 shares of preferred stock from time
to time in one or more series and with terms of each series
stated in our board&#146;s resolutions providing for the
designation and issue of that series. Our certificate also
authorizes the board of directors to fix, state and express the
powers, rights, designations, preferences, qualifications,
limitations and restrictions, and dividend, voting, conversion
and redemption rights pertaining to each series of preferred
stock that we issue. Without seeking any shareholder approval,
our board of directors may issue preferred stock with voting and
other rights that could adversely affect the voting power of the
holders of our common stock and could have the effect of
delaying, deferring or preventing a change in control. Other
than the issuance of the series of preferred stock previously
authorized by the board of directors in connection with the
shareholder rights plan described below, we have no present
plans to issue any shares of preferred stock.
</FONT>

<P align="left">
<B><FONT size="2">Registration Rights</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have granted registration rights to certain
holders of shares of our common stock under the terms of the
Amended and Restated Registration Agreement dated as of
March&nbsp;30, 1999, by and among us and the shareholders named
in the agreement. Subject to certain exceptions, including our
right to defer a demand registration for a single period of up
to 90&nbsp;days in a given year, these holders have the right to
require us to register their shares at our expense under the
circumstances described in that agreement. In addition, all
holders of shares with registration rights have the right to
piggyback on any registration for our account, subject to
certain limitations. Accordingly, in the event that we propose
to register additional shares of common stock under the
Securities Act, the holders of shares with registration rights
are entitled to receive notice of that registration and to
include their shares in the registration, subject to limitations
described in the agreement. All registration rights are subject
to conditions and limitations, among them our right to limit the
number of shares of common stock held by these security holders
to be included in the registration. We are generally required to
bear all of the expenses of all registrations (other than
underwriting discounts and commissions). Registration of the
shares of common stock held by security holders with
registration rights would result in these shares becoming freely
tradeable without restriction under the Securities Act
immediately upon effectiveness of such registration. In
connection with any registration under these provisions, we are
required to indemnify the holder participating in an offering
against civil liabilities under the Securities Act.
</FONT>

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<P align="left">
<B><FONT size="2">Anti-Takeover Provisions of Our Certificate of
Incorporation, By-laws and Shareholder Rights Plan</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The provisions of our certificate of
incorporation, by-laws and shareholder rights plan, and Delaware
statutory law described in this section may delay or make it
more difficult for someone to acquire us without the approval of
our board. These provisions could have the effect of
discouraging third parties from making acquisition proposals
although such proposals, if made, might be considered desirable
by a majority of our stockholders. These provisions may also
have the effect of making it more difficult for third parties to
cause the replacement of our current management without the
concurrence of our board.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified
Board of Directors</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The certificate of incorporation provides for our
board (other than those directors elected solely by any series
of preferred stock created by resolution of our board) to be
divided into three classes of directors serving staggered three
year terms. As a result, approximately one-third of our board
will be elected each year. See &#147;Management&nbsp;&#151;
Directors&#148;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe a classified board will help to assure
the continuity and stability of our board, and our business
strategies and policies as determined by our board, because a
majority of the directors at any given time will have prior
experience as our directors. This provision should also help to
ensure that our board, if confronted with an unsolicited
proposal from a third party that has acquired a block of our
voting stock, will have sufficient time to review the proposal
and appropriate alternatives and to seek the best available
result for all stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This provision could prevent a party who acquires
control of a majority of the outstanding voting stock from
obtaining control of our board until the second annual
stockholders&#146; meeting following the date the acquiror
obtains the controlling stock interest, could have the effect of
discouraging a potential acquiror from making a tender offer or
otherwise attempting to obtain control of us and could thus
increase the likelihood that incumbent directors will retain
their positions.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Number of
Directors; Removal; Vacancies</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our certificate of incorporation and by-laws
provide that the number of directors shall not be less than 3
nor more than 15 and, except as may be provided in the terms of
any series of preferred stock created by resolutions of the
board, shall be determined from time to time exclusively by a
vote of a majority of our board then in office. The certificate
of incorporation also provides that our board shall have the
exclusive right, except as may be provided in the terms of any
series of preferred stock created by resolutions of the board,
to fill vacancies, including vacancies created by expansion of
our board. Furthermore, except as may be provided in the terms
of any preferred stock created by resolution of our board with
respect to the election of directors by the holders of such
series, directors may be removed by stockholders only for cause
and only by the affirmative vote of at least 66&nbsp;2/3% of the
voting power of all of the shares of our capital stock then
entitled to vote generally in the election of directors, voting
together as a single class.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These provisions, in conjunction with the
provision of the certificate of incorporation authorizing our
board to fill vacant directorships, could prevent stockholders
from removing incumbent directors without cause and filling the
resulting vacancies with their own nominees.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
Stockholder Action by Written Consent; Special
Meetings</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our certificate of incorporation provides that,
except as may be provided in the terms of any series of
preferred stock created by resolution of our board, stockholder
action can be taken only at an annual or special meeting of
stockholders and cannot be taken by written consent in lieu of a
meeting. Our certificate of incorporation also provides that
special meetings of stockholders can only be called by the
Chairman of the Board or by the Secretary pursuant to a
resolution approved by a majority of our board then in office.
Stockholders are not permitted to call a special meeting of
stockholders.
</FONT>

<P align="center"><FONT size="2">56
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<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Approval of
Certain Business Combinations</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our certificate of incorporation requires that
certain business combinations with a &#147;Related Person&#148;
(as such term is defined in our certificate of incorporation) be
approved by the affirmative vote of 80% of our outstanding
shares generally entitled to vote for the election of directors,
unless (i)&nbsp;the business combination has been approved by
two-thirds of the board of directors; or (ii)&nbsp;the amount of
consideration to be received in the business combination by the
holders of common stock or any class or series of outstanding
voting stock, other than common stock, shall be equal to the
greater of: (i)&nbsp;the highest per share price paid by the
Related Person for any shares of our stock acquired within the
prior two years; or (ii)&nbsp;the fair market value (as such
term is defined in our certificate of incorporation) of our
common stock.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advance
Notice for Raising Business or Making Nominations at
Meetings</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our by-laws establish an advance notice procedure
with regard to stockholder proposals and nominations of
individuals for election to the board of directors. In general,
notice of a stockholder proposal or a director nomination for an
annual meeting must be delivered to us at our executive offices
not less than 120&nbsp;days nor more than 150&nbsp;days before
the date of the anniversary of the last annual
stockholders&#146; meeting (unless the meeting is to be held
more than 30&nbsp;days in advance of such anniversary date, in
which event the stockholder proposal or director nomination
shall be delivered to us no later than the close of business on
the 10th day following the day on which notice of the meeting
was given) and must contain specified information and conform to
certain requirements, as set forth in our by-laws. Notice of a
director nomination for a special meeting must be received by us
no later than the 10th day following the day on which notice of
the date of a special meeting of stockholders was given. If the
presiding officer at any stockholders&#146; meeting determines
that a stockholder proposal or director nomination was not made
in accordance with the by-laws, we may disregard such proposal
or nomination.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notice of any nomination for election as a
director must set forth the name, age, business and residence
address of the person or persons to be nominated; the business
experience during the past five years of such person or persons;
including the person&#146;s principal occupation or employment
during such period, the name and principal business of any
corporation or other organization in which such occupation or
employment was carried on, and such other information as to the
nature of the persons responsibilities and level of professional
competence as may be sufficient to permit assessment of the
person&#146;s prior business experience, the class or series and
number of shares of our capital stock beneficially owned by the
person and any other information relating to the person that
would be required to be disclosed in a proxy statement or other
filing required to be made in connection with solicitations of
proxies for election of directors pursuant to Section&nbsp;14 of
the Exchange Act of 1934 and the rules and regulations
promulgated thereunder.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amendments to
By-Laws</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our certificate of incorporation provides that
our board or the holders of at least 66&nbsp;2/3% of the voting
power of all shares of our capital stock then entitled to vote
generally in the election of directors, voting together as a
single class, have the power to amend or repeal our by-laws.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amendment of
the Certificate of Incorporation</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any proposal to amend, alter, change or repeal
any provision of our certificate of incorporation, except as may
be provided in the terms of any preferred stock created by
resolution of our board and which relate to such series of
preferred stock, requires approval by the affirmative vote of
both a majority of the members of our board then in office and a
majority vote of the voting power of all of the shares of our
capital stock entitled to vote generally in the election of
directors, voting together as a single class. However, any
proposal to amend, alter, change or repeal the provisions of our
certificate of incorporation relating to (1)&nbsp;the
classification of our board, (2)&nbsp;removal of directors,
(3)&nbsp;the prohibitions on stockholder action by written
consent or stockholder calls for special meetings,
(4)&nbsp;amendment of by-laws, or (5)&nbsp;amendment of the
certificate of incorporation requires approval by the
affirmative vote of 66&nbsp;2/3% of the voting power of all of
the shares of our capital stock entitled to vote generally in
the election of directors, voting together as a
</FONT>

<P align="center"><FONT size="2">57
</FONT>

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<DIV align="left">
<FONT size="2">single class; except in the case of any proposal
to amend, alter, change or repeal the provision of our
certificate of incorporation relating to business combinations
which requires approval by the affirmative vote of 80% of the
voting power of all of the shares of our capital stock entitled
to vote generally in the election of directors, voting together
as a single class.
</FONT>
</DIV>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred
Stock and Additional Common Stock</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the certificate of incorporation, our board
will have the authority to provide by resolution for the
issuance of shares of one or more series of preferred stock. Our
board is authorized to fix by resolution the terms and
conditions of each such other series. See <I>&#147;Description
of Capital Stock&nbsp;&#151; Preferred Stock&#148;.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that the availability of our preferred
stock, in each case issuable in series, and additional shares of
common stock could facilitate certain financings and
acquisitions and provide a means for meeting other corporate
needs which might arise. The authorized shares of our preferred
stock, as well as authorized but unissued shares of common stock
will be available for issuance without further action by our
stockholders, unless stockholder action is required by
applicable law or the rules of any stock exchange on which any
series of our stock may then be listed, or except as may be
provided in the terms of any preferred stock created by
resolution of our board.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These provisions give our board the power to
approve the issuance of a series of preferred stock, or
additional shares of common stock, that could, depending on its
terms, either impede or facilitate the completion of a merger,
tender offer or other takeover attempt. For example, the
issuance of new shares of preferred stock might impede a
business combination if the terms of those shares include voting
rights which would enable a holder to block business
combinations or, alternatively, might facilitate a business
combination if those shares have general voting rights
sufficient to cause an applicable percentage vote requirement to
be satisfied.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Moreover, the Series&nbsp;D preferred stock is
issuable under the circumstances provided for in the rights
agreement upon exercise of the rights. See
<I>&#147;&#151;&nbsp;Shareholder Rights Plan&#148;.</I>
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Delaware
Business Combination Statute</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Section&nbsp;203 of the Delaware General
Corporation Law, or the DGCL, provides that, subject to certain
exceptions specified therein, an &#147;interested
stockholder&#148; of a Delaware corporation may not engage in
any business combination with the corporation for a three-year
period following the time that such stockholder becomes an
&#147;interested stockholder&#148; unless (1)&nbsp;prior to such
time, the board of directors of the corporation approved either
the business combination or the transaction which resulted in
the stockholder becoming an &#147;interested stockholder&#148;,
(2)&nbsp;upon consummation of the transaction which resulted in
the stockholder becoming an &#147;interested stockholder,&#148;
the interested stockholder owned at least 85% of the voting
stock of the corporation outstanding at the time the transaction
commenced (excluding certain shares), or (3)&nbsp;at or
subsequent to such time, the business combination is approved by
the board of directors of the corporation and authorized at an
annual or special meeting of stockholders by the affirmative
vote of at least 66&nbsp;2/3% of the outstanding voting stock
which is not owned by the &#147;interested stockholder.&#148;
Except as otherwise specified in Section&nbsp;203, an
&#147;interested stockholder&#148; is defined to include
(1)&nbsp;any person that is the owner of 15% or more of the
outstanding voting stock of the corporation, or is an affiliate
or associate of the corporation and was the owner of 15% or more
of the outstanding voting stock of the corporation at any time
within three years immediately prior to the relevant date and
(2)&nbsp;the affiliates and associates of any such person. Under
certain circumstances, Section&nbsp;203 makes it more difficult
for a person who would be an &#147;interested stockholder&#148;
to effect various business combinations with a corporation for a
three-year period, although the stockholders may elect to
exclude a corporation from the restrictions imposed thereunder.
Our certificate of incorporation does not exclude us from the
restrictions imposed under Section&nbsp;203. The provisions of
Section&nbsp;203 may encourage companies interested in acquiring
us to negotiate in advance with our board, since the stockholder
approval requirement would be avoided if a majority of the
directors then in office approve either the business combination
or the transaction which results in the stockholder becoming an
interested stockholder. These provisions also may have the
effect of preventing changes in our management. It
</FONT>

<P align="center"><FONT size="2">58
</FONT>
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<DIV align="left">
<FONT size="2">is possible that such provisions could make it
more difficult to accomplish transactions which stockholders may
otherwise deem to be in their best interests.
</FONT>
</DIV>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder
Rights Plan</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each holder of a share of our common stock has
the right to purchase from us one one-hundredth (&nbsp;1/100) of
a share of our Series&nbsp;D preferred stock, $.01 par value per
share, at a price of $100 per one one-hundredth of a
Series&nbsp;D preferred share. The exercise price and the number
of Series&nbsp;D preferred shares issuable upon exercise are
subject to adjustments from time to time to prevent dilution.
The share purchase rights are not exercisable until the earlier
to occur of (1)&nbsp;10&nbsp;days following a public
announcement that a person or group of affiliated or associated
persons, referred to as an acquiring person, have acquired
beneficial ownership of 15% or more of our outstanding voting
common stock or (2)&nbsp;10 business days following the
commencement of, or announcement of an intention to make, a
tender offer or exchange offer which would result in an
acquiring person beneficially owning 15% or more of our
outstanding voting shares of common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we are acquired in a merger or other business
combination, or if more than 50% of our consolidated assets or
earning power is sold after a person or group has become an
acquiring person, proper provision will be made so that each
holder of a share purchase right &#151; other than share
purchase rights beneficially owned by the acquiring person,
which will thereafter be void &#151; will have the right to
receive, upon exercise of the share purchase right at the then
current exercise price, the number of shares of common stock of
the acquiring company which at the time of the transaction have
a market value of two times the exercise price. If any person or
group becomes an acquiring person, proper provision shall be
made so that each holder of a share purchase right &#151; other
than share purchase rights beneficially owned by the acquiring
person, which will thereafter be void &#151; will have the right
to receive upon exercise of the share purchase right at the then
current exercise price, the number of shares of Series&nbsp;D
preferred stock with a market value at the time of the
transaction equal to two times the exercise price.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Series&nbsp;D preferred shares issuable upon
exercise of the share purchase rights will not be redeemable.
Each Series&nbsp;D preferred share will be entitled to a minimum
preferential dividend payment of $.10 per share and will be
entitled to an aggregate dividend of 100&nbsp;times the cash
dividend declared per share of common stock. In the event we
liquidate, the holders of the Series&nbsp;D preferred shares
will be entitled to receive a payment in an amount equal to the
greater of $100&nbsp;per one one-hundredth share or
100&nbsp;times the payment made per share of common stock. Each
Series&nbsp;D preferred share will have 100 votes, voting
together with the shares of common stock. Finally, in the event
of any merger, consolidation or other transaction in which
shares of common stock are exchanged, each Series&nbsp;D
preferred share will be entitled to receive 100&nbsp;times the
amount received per share of common stock. These rights are
protected by customary antidilution provisions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Before the date the share purchase rights are
exercisable, the share purchase rights may not be detached or
transferred separately from the common stock. The share purchase
rights will expire in 2012, or, if the share purchase rights
become exercisable before 2012, at the close of business on the
90th day following such date the share purchase right become
exercisable, provided that our board of directors does not
extend or otherwise modify the right. At any time on or prior to
10&nbsp;business days following the time an acquiring person
acquires beneficial ownership of 15% or more of our outstanding
voting common stock, our board of directors may redeem the share
purchase rights in whole, but not in part, at a price of $.01
per share purchase right. Immediately upon any share purchase
rights redemption, the exercise rights terminate, and the
holders will only be entitled to receive the redemption price. A
more detailed description and terms of the share purchase rights
are set forth in a rights agreement between Cos&#237;
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
as rights agent. This rights agreement could have the effect of
discouraging tender offers or other transactions that might
otherwise result in our shareholders receiving a premium over
the market price for their common stock.
</FONT>

<P align="left">
<B><FONT size="2">Indemnification and Limitations on Liability
of Directors and Officers</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our by-laws provide for indemnification of
directors to the fullest extent permitted by Delaware law. Our
certificate of incorporation, to the extent permitted by
Delaware law, eliminates or limits the personal liability
</FONT>

<P align="center"><FONT size="2">59
</FONT>

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<DIV align="left">
<FONT size="2">of directors to Cos&#237; and its shareholders
for monetary damages for breach of fiduciary duty. Such
indemnification may be available for liabilities arising in
connection with this offering. To the extent that limitation of
liability or indemnification for liabilities under the
Securities Act may be permitted to directors, officers or
persons controlling Cos&#237; under the foregoing provisions, we
have been informed that, in the opinion of the SEC, such
indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. Our by-laws also
allow us to indemnify our officers to the fullest extent
permitted by Delaware law. Our by-laws obligate us, under
certain circumstances, to advance expenses to our directors and
officers in defending an action, suit or proceeding for which
indemnification may be sought. We also can indemnify someone
serving at our request as a director, officer, employee,
fiduciary or agent of another corporation or of a partnership,
joint venture, trust or other enterprise against these
liabilities.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our by-laws also provide that we have the power
to purchase and maintain insurance on behalf of any person who
is or was one of our directors, officers, employees or agents
against any liability asserted against that person or incurred
by that person in these capacities, whether or not we would have
the power to indemnify that person against these liabilities
under Delaware law. We maintain insurance on behalf of all of
our directors and executive officers.
</FONT>

<P align="left">
<B><FONT size="2">Other Matters</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;is
the transfer agent and registrar for our common stock.
</FONT>

<P align="center"><FONT size="2">60
</FONT>

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<!-- link1 "<FONT size="2">CERTAIN U.S. FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS</FONT>" -->
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<P align="center">
<B><FONT size="2">CERTAIN U.S. FEDERAL INCOME AND ESTATE TAX
CONSIDERATIONS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a general summary of certain
U.S. federal income and estate tax considerations with respect
to your acquisition, ownership and disposition of common stock
if you are a Non-U.S. Holder. A &#147;Non-U.S. Holder&#148; is a
beneficial owner of common stock that, for U.S. federal income
tax purposes, is not:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">an individual who is a citizen or resident of the
	U.S.;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">a corporation or other entity treated as a
	corporation for U.S. federal income tax purposes created or
	organized in or under the laws of the U.S. or of any political
	subdivision of the U.S.;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">an estate, the income of which is subject to U.S.
	federal income taxation regardless of its source; or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">a trust, if a court within the U.S. is able to
	exercise primary supervision over the administration of the
	trust and one or more U.S. persons have the authority to control
	all substantial decisions of the trust.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The tax treatment of a partner in a partnership
generally will depend on the status of the partner and the
activities of the partnership. If you are a partnership or a
partner in a partnership that is considering the purchase of
common stock, you should consult your tax advisor regarding the
particular tax consequences to you.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This summary does not address all of the U.S.
federal income tax considerations that may be relevant to you in
light of your particular circumstances. This discussion is
limited to Non-U.S. Holders that hold our common stock as a
capital asset. In addition, this summary does not deal with
holders that are subject to special treatment under U.S. federal
income tax laws (such as insurance companies, tax-exempt
organizations, financial institutions, brokers, dealers in
securities, certain U.S. expatriates, and Non-U.S. Holders that
hold our common stock as part of a &#147;straddle,&#148;
&#147;hedge,&#148; &#147;conversion transaction,&#148;
&#147;synthetic security,&#148; or other integrated investment).
This summary does not discuss any aspects of state, local or
non-U.S. taxation. This summary is based on current provisions
of the Internal Revenue Code of 1986, as amended, U.S. Treasury
regulations, judicial opinions, published positions of the
Internal Revenue Service, and all other applicable authorities,
all as in effect as of the date of this prospectus and all of
which are subject to change, possibly with retroactive effect.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">We urge prospective investors to consult their
tax advisors regarding the U.S. federal, state, local, and
non-U.S. income and other tax considerations of acquiring,
holding and disposing of shares of our common stock.</FONT></B>

<P align="left">
<B><FONT size="2">Dividends</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As discussed under &#147;Dividend Policy&#148;
above, we do not currently expect to pay dividends. In the event
that we do pay dividends, any dividends we pay to you, as a
Non-U.S. Holder, generally will be subject to U.S. withholding
tax at a rate of 30% (or a lower rate prescribed by an
applicable tax treaty) on the gross amount of the dividends
unless the dividends are effectively connected with your conduct
of a trade or business in the U.S. (or, if a tax treaty applies,
attributable to a U.S. permanent establishment) and you provide
us with an Internal Revenue Service Form&nbsp;W-8ECI (or
appropriate substitute form).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For purposes of determining whether tax is to be
withheld at a reduced rate under a tax treaty, you will be
required to provide an Internal Revenue Service Form&nbsp;W-8BEN
(or appropriate substitute form) certifying your entitlement to
benefits under a treaty. In addition, where dividends are paid
to a Non-U.S. Holder that is a partnership or other pass-through
entity, persons holding an interest in the entity may need to
provide the certification.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Dividends effectively connected with a U.S. trade
or business (or, if a tax treaty applies, attributable to a U.S.
permanent establishment) generally will be subject to U.S.
federal income tax on net income basis, in the same manner as
generally applied to U.S. persons. In addition, a &#147;branch
profits tax&#148; may be imposed at a 30% rate (or a lower rate
under an applicable tax treaty) on dividends received by a
foreign corporation that are effectively connected with the
conduct of a trade or business in the U.S.
</FONT>

<P align="center"><FONT size="2">61
</FONT>

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<P align="left">
<B><FONT size="2">Sale or Other Disposition of Our Common
Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a Non-U.S. Holder, you generally will not be
subject to U.S. federal income tax, including any withholding
thereof, on any gain realized upon the sale or other disposition
of your shares of the common stock unless:
</FONT>
<P>

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	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the gain is effectively connected with your
	conduct of a trade or business within the U.S. (or, if a tax
	treaty applies, is attributable to a U.S. permanent
	establishment);
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">you are an individual who is present in the U.S.
	for 183&nbsp;days or more in the taxable year of disposition and
	you meet other requirements; or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">we are or have been a &#147;U.S. real property
	holding corporation&#148; for U.S. federal income tax purposes
	and you hold or have held, directly or indirectly, at any time
	within the shorter of the five-year period preceding disposition
	or your holding period for the shares of common stock, more than
	5% of our outstanding common stock.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We do not believe that we are, have been or are
likely to become a U.S. real property holding corporation.
However, no assurance can be provided that we will not become a
U.S. real property holding corporation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gain that is effectively connected with your
conduct of a trade or business within the U.S. generally will be
subject to U.S. federal income tax on a net income basis in the
same manner as generally applied to U.S. persons (and if you are
a corporation, the branch profits tax discussed above may also
apply in some circumstances), but you will not be subject to
withholding. If you are described in the second bullet point
above, you generally will be subject to tax at a rate of 30% on
the gain realized, although the gain may be offset by some U.S.
source capital losses. You should consult any applicable income
tax treaties that may provide for a lower rate of tax or other
rules different from those described above.
</FONT>

<P align="left">
<B><FONT size="2">Federal Estate Tax</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Common stock actually or beneficially held by an
individual who is a Non-U.S. Holder at the time of death will be
included in the individual&#146;s gross estate for U.S. federal
estate tax purposes, unless an applicable estate tax or other
treaty provides otherwise and, therefore, may be subject to U.S.
federal estate tax. Estates of non-resident aliens are generally
allowed a statutory credit that has the effect of offsetting the
U.S. federal estate tax imposed on the first $60,000 of the
taxable estate.
</FONT>

<P align="left">
<B><FONT size="2">Information Reporting and Backup
Withholding</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We must report annually to the Internal Revenue
Service and to you the amount of dividends we pay to you and any
tax we withhold. These reporting requirements apply regardless
of whether withholding is reduced by an applicable tax treaty.
Pursuant to applicable tax treaties or other agreements, this
information also may be made available to the tax authorities in
the country in which you reside or are established.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additional U.S. information reporting
requirements and backup withholding tax will generally apply to
the dividends paid to you on the common stock at an address
inside the U.S. and to payments to you of the proceeds of a sale
of the common stock by a U.S. office of a broker unless you
certify, under penalties of perjury, that you are not a U.S.
person or otherwise establish an exemption. Backup withholding
is imposed at a rate not to exceed 31%. Information reporting
(but not backup withholding) generally will also apply to
payments of the proceeds of sales of the common stock by
non-U.S. offices of U.S. brokers, or non-U.S. brokers with some
types of relationships with the U.S., unless you comply with
certain certification procedures to establish that you are not a
U.S. person or you otherwise establish an exemption.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Backup withholding is not an additional tax. Any
amounts withheld under the backup withholding tax rules from a
payment to you can be refunded or credited against your U.S.
federal income tax liability, if any, if the required
information is furnished to the Internal Revenue Service.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The foregoing discussion of U.S. federal
income and estate tax considerations is not tax advice.
Accordingly, each prospective Non-U.S. Holder of our common
stock should consult that holder&#146;s own tax adviser with
respect to the federal, state, local and non-U.S. tax
consequences of the acquisition, ownership and disposition of
our common stock.</FONT></B>

<P align="center"><FONT size="2">62
</FONT>

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<!-- link1 "<FONT size="2">SHARES ELIGIBLE FOR FUTURE SALE</FONT>" -->
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<P align="center">
<B><FONT size="2">SHARES ELIGIBLE FOR FUTURE SALE</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to this offering, there has been no public
market for our common stock. Future sales of substantial amounts
of our common stock in the public market could adversely affect
market prices prevailing from time to time. Furthermore, since
only a limited number of shares will be available for sale
shortly after the offering because of certain contractual and
legal restrictions on resale (as described below), sales of
substantial amounts of our common stock in the public market
after such restrictions lapse could adversely affect the
prevailing market price at such time and our ability to raise
equity capital in the future.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon completion of this offering, we will have
outstanding an aggregate
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock, assuming no exercise of the underwriters&#146;
over-allotment option and no exercise of outstanding options to
purchase our common stock. Of these shares, the shares of common
stock to be sold in this offering will be freely tradable
without restriction or further registration under the Securities
Act, unless such shares are held by our &#147;affiliates,&#148;
as that term is defined in Rule&nbsp;144 under the Securities
Act. These restricted shares may be sold in the public market
only if registered or if they qualify for an exemption from
registration under Rule&nbsp;144 or Rule&nbsp;701 promulgated
under the Securities Act, which rules are summarized below. As a
result of the contractual restrictions described below and the
provisions of Rule&nbsp;144 and Rule&nbsp;701, these restricted
shares will be available for sale in the public market as
follows (based on the number of shares outstanding as of
April&nbsp;1, 2002):
(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;restricted
shares will be eligible for sale 90&nbsp;days after the date of
this prospectus; and (ii)&nbsp;all of the restricted shares will
be available for sale in the public market upon expiration of
the lock-up agreements 180&nbsp;days after the date of this
prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of our officers and directors, and certain of
our stockholders and option holders have agreed not to sell,
make any short sale of, grant any option for the purchase of, or
otherwise transfer or dispose of, any shares of common stock or
any securities convertible into or exercisable for common stock
held by such persons for a period of 180&nbsp;days after the
date of this prospectus, without the prior written consent of
Credit Suisse First Boston Corporation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In general, under Rule&nbsp;144 as currently in
effect, a person (or persons whose shares are aggregated),
including an affiliate, who has beneficially owned shares for at
least one year is entitled to sell, within any three-month
period commencing 90&nbsp;days after the date of this
prospectus, a number of shares that does not exceed the greater
of (i)&nbsp;1% of the then outstanding shares of our common
stock
(approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
immediately after the offering) or (ii)&nbsp;the average weekly
trading volume of our common stock on the Nasdaq National Market
during the four calendar weeks preceding such sale, subject to
the filing of a Form&nbsp;144 with respect to such sale. Sales
under Rule&nbsp;144 are also subject to certain manner of sale
provisions and notice requirements and to the availability of
current public information about us. In addition, a person who
is not deemed to have been an affiliate of ours at any time
during the 90&nbsp;days preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least
two years, would be entitled to sell such shares under
Rule&nbsp;144(k) without regard to the requirements described
above. Therefore, unless otherwise restricted,
&#147;144(k)&nbsp;shares&#148; may be sold immediately following
completion of the offering. In general, under Rule&nbsp;701 of
the Securities Act as currently in effect, any of our employees,
consultants or advisors who purchased shares from us in
connection with a compensatory stock or option plan or written
employment agreement is eligible to resell such shares
90&nbsp;days after the effective date of the offering in
reliance on Rule 144, but without compliance with certain
restrictions, including the holding period conditions, contained
in Rule&nbsp;144.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Within 90&nbsp;days of the date of this
prospectus, we intend to file a registration statement under the
Securities Act to register shares of our common stock reserved
for issuance under our equity incentive plans, thus permitting
the resale of such shares by non-affiliates in the public market
without restriction under the Securities Act. Such registration
statements will become effective immediately upon filing. As of
April&nbsp;1, 2002, 6,058,042 options to purchase shares of our
common stock were outstanding under our stock option plans and
agreements, certain of which are subject to the lock-up
agreements described above.
</FONT>

<P align="center"><FONT size="2">63
</FONT>

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<!-- link1 "<FONT size="2">UNDERWRITING</FONT>" -->
<DIV align="left"><A NAME="018"></A></DIV>

<P align="center">
<B><FONT size="2">UNDERWRITING</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms and subject to the conditions
contained in an underwriting agreement
dated &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2002, we have agreed to sell to the underwriters named below,
for whom Credit Suisse First Boston Corporation, Banc of America
Securities LLC, U.S. Bancorp Piper Jaffray Inc., and William
Blair&nbsp;&#38; Company, L.L.C. are acting as representatives,
the following respective numbers of shares of common stock:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="82%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">of Shares</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="left" nowrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT size="1">Underwriter</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Credit Suisse First Boston Corporation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Banc of America Securities LLC
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">U.S. Bancorp Piper Jaffray Inc.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">William Blair &#38; Company, L.L.C.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The underwriting agreement provides that the
underwriters are obligated to purchase all the shares of common
stock in the offering if any are purchased, other than those
shares covered by the over-allotment option described below. The
underwriting agreement also provides that if an underwriter
defaults the purchase commitments of non-defaulting underwriters
may be increased or the offering may be terminated.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have granted to the underwriters a 30-day
option to purchase on a pro rata basis up
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional
shares at the initial public offering price less the
underwriting discounts and commissions. The option may be
exercised only to cover any over-allotments of common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The underwriters propose to offer the shares of
common stock initially at the public offering price on the cover
page of this prospectus and to selling group members at that
price less a selling concession of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. The underwriters and
selling group members may allow a discount of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share on sales to other
broker/dealers. After the initial public offering the
underwriters may change the public offering price and concession
and discount to broker/dealers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes the compensation
and estimated expenses we will pay:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Per Share</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Without</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">With</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Without</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">With</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Over-allotment</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Over-allotment</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Over-allotment</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Over-allotment</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Underwriting Discounts and Commissions paid by us
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Expenses payable by us
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The representatives have informed us that they do
not expect discretionary sales to exceed 5% of the shares of
common stock being offered.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have agreed that we will not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Securities and Exchange Commission
a registration statement under the Securities Act relating to,
any shares of our common stock or securities convertible into or
exchangeable or exercisable for any shares of our common stock,
or publicly disclose the intention to make any offer, sale,
pledge, disposition or filing, without the prior written consent
of Credit Suisse First Boston Corporation for a period of
180&nbsp;days after the date of this prospectus, except
issuances pursuant to the exercise of employee stock options
outstanding on the date hereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our officers and directors and certain
shareholders and option holders
(representing &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our outstanding
shares of common stock) have agreed that they will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly
or indirectly, any shares of our common stock or securities
convertible into or exchangeable or exercisable for any shares
of our common stock, enter into a transaction that would have
the same effect, or enter into any swap, hedge or other
arrangement that transfers, in whole or in part, any of the
economic consequences of ownership of our common stock, whether
any of these transactions are to be settled by delivery of our
common stock or other securities, in cash or otherwise, or
publicly disclose the
</FONT>

<P align="center"><FONT size="2">64
</FONT>
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<DIV align="left">
<FONT size="2">intention to make any offer, sale, pledge or
disposition, or to enter into any transaction, swap, hedge or
other arrangement, without, in each case, the prior written
consent of Credit Suisse First Boston Corporation for a period
of 180&nbsp;days after the date of this prospectus.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The underwriters have reserved for sale at the
initial public offering price up
to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of the common stock for employees, directors and other persons
associated with us who have expressed an interest in purchasing
common stock in the offering. The number of shares available for
sale to the general public in the offering will be reduced to
the extent these persons purchase the reserved shares. Any
reserved shares not so purchased will be offered by the
underwriters to the general public on the same terms as the
other shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have agreed to indemnify the underwriters
against liabilities under the Securities Act, or contribute to
payments that the underwriters may be required to make in that
respect.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have applied to list the shares of common
stock on The Nasdaq Stock Market&#146;s National Market under
the symbol &#147;COSI.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In February&nbsp;2002, certain individuals
associated with William Blair &#38; Company, L.L.C. purchased
164,320 shares of our Series&nbsp;C preferred stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the offering the underwriters
may engage in stabilizing transactions, over-allotment
transactions, syndicate covering transactions, penalty bids and
passive market making in accordance with Regulation&nbsp;M under
the Exchange Act.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Stabilizing transactions permit bids to purchase
	the underlying security so long as the stabilizing bids do not
	exceed a specified maximum.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Over-allotment involves sales by the underwriters
	of shares in excess of the number of shares the underwriters are
	obligated to purchase, which creates a syndicate short position.
	The short position may be either a covered short position or a
	naked short position. In a covered short position, the number of
	shares over-allotted by the underwriters is not greater than the
	number of shares that they may purchase in the over-allotment
	option. In a naked short position, the number of shares involved
	is greater than the number of shares in the over-allotment
	option. The underwriters may close out any covered short
	position by either exercising their over-allotment option and/or
	purchasing shares in the open market.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Syndicate covering transactions involve purchases
	of the common stock in the open market after the distribution
	has been completed in order to cover syndicate short positions.
	In determining the source of shares to close out the short
	position, the underwriters will consider, among other things,
	the price of shares available for purchase in the open market as
	compared to the price at which they may purchase shares through
	the over-allotment option. If the underwriters sell more shares
	than could be covered by the over-allotment option, a naked
	short position, the position can only be closed out by buying
	shares in the open market. A naked short position is more likely
	to be created if the underwriters are concerned that there could
	be downward pressure on the price of the shares in the open
	market after pricing that could adversely affect investors who
	purchase in the offering.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Penalty bids permit the representatives to
	reclaim a selling concession from a syndicate member when the
	common stock originally sold by the syndicate member is
	purchased in a stabilizing or syndicate covering transaction to
	cover syndicate short positions.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">In passive market making, market makers in the
	common stock who are underwriters or prospective underwriters
	may, subject to limitations, make bids for or purchases of our
	common stock until the time, if any, at which a stabilizing bid
	is made.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These stabilizing transactions, syndicate
covering transactions and penalty bids may have the effect of
raising or maintaining the market price of our common stock or
preventing or retarding a decline in the market price of the
common stock. As a result the price of our common stock may be
higher than the price that might otherwise exist in the open
market. These transactions may be effected on The Nasdaq
National Market and, if commenced, may be discontinued at any
time.
</FONT>

<P align="center"><FONT size="2">65
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A prospectus in electronic format may be made
available on the web sites maintained by one or more of the
underwriters participating in this offering. The representatives
may agree to allocate a number of shares to underwriters for
sale to their online brokerage account holders. Internet
distributions will be allocated by the underwriters that will
make internet distributions on the same basis as other
allocations.
</FONT>

<P align="center"><FONT size="2">66
</FONT>

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<!-- link1 "<FONT size="2">NOTICE TO CANADIAN RESIDENTS</FONT>" -->
<DIV align="left"><A NAME="019"></A></DIV>

<P align="center">
<B><FONT size="2">NOTICE TO CANADIAN RESIDENTS</FONT></B>

<P align="left">
<B><FONT size="2">Resale Restrictions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The distribution of the common stock in Canada is
being made only on a private placement basis exempt from the
requirement that we prepare and file a prospectus with the
securities regulatory authorities in each province where trades
of common stock are made. Any resale of the common stock in
Canada must be made under applicable securities laws which will
vary depending on the relevant jurisdiction, and which may
require resales to be made under available statutory exemptions
or under a discretionary exemption granted by the applicable
Canadian securities regulatory authority. Purchasers are advised
to seek legal advice prior to any resale of the common stock.
</FONT>

<P align="left">
<B><FONT size="2">Representations of Purchasers</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">By purchasing common stock in Canada and
accepting a purchase confirmation a purchaser is representing to
us and the dealer from whom the purchase confirmation is
received that;
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the purchaser is entitled under applicable
	provincial securities laws to purchase the common stock without
	the benefit of a prospectus qualified under those securities
	laws;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">where required by law, that the purchaser is
	purchasing as principal and not as agent; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the purchaser has reviewed the text above under
	Resale Restrictions.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Rights of Action&nbsp;&#151;&nbsp;Ontario
Purchasers Only</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Ontario securities legislation, a purchaser
who purchases a security offered by this prospectus during the
period of distribution will have a statutory right of action for
damages, or while still the owner of the shares, for rescission
against us in the event that this prospectus contains a
misrepresentation. A purchaser will be deemed to have relied on
the misrepresentation. The right of action for damages is
exercisable not later than the earlier of 180&nbsp;days from the
date the purchaser first had knowledge of the facts giving rise
to the cause of action and three years from the date on which
payment is made for the shares. The right of action for
rescission is exercisable not later than 180&nbsp;days from the
date on which payment is made for the shares. If a purchaser
elects to exercise the right of action for rescission, the
purchaser will have no right of action for damages against us.
In no case will the amount recoverable in any action exceed the
price at which the shares were offered to the purchaser and if
the purchaser is shown to have purchased the securities with
knowledge of the misrepresentation, we will have no liability.
In the case of an action for damages, we will not be liable for
all or any portion of the damages that are proven to not
represent the depreciation in value of the shares as a result of
the misrepresentation relied upon. These rights are in addition
to, and without derogation from, any other rights or remedies
available at law to an Ontario purchaser. The foregoing is a
summary of the rights available to an Ontario purchaser. Ontario
purchasers should refer to the complete text of the relevant
statutory provisions.
</FONT>

<P align="left">
<B><FONT size="2">Enforcement of Legal Rights</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of our directors and officers as well as the
experts named herein may be located outside of Canada and, as a
result, it may not be possible for Canadian purchasers to effect
service of process within Canada upon us or those persons. All
or a substantial portion of our assets and the assets of those
persons may be located outside of Canada and, as a result, it
may not be possible to satisfy a judgment against us or those
persons in Canada or to enforce a judgment obtained in Canadian
courts against us or those persons outside of Canada.
</FONT>

<P align="left">
<B><FONT size="2">Taxation and Eligibility for
Investment</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Canadian purchasers of common stock should
consult their own legal and tax advisors with respect to the tax
consequences of an investment in the common stock in their
particular circumstances and about the eligibility of the common
stock for investment by the purchaser under relevant Canadian
legislation.
</FONT>

<P align="center"><FONT size="2">67
</FONT>

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<!-- link1 "<FONT size="2">PRICING OF THIS OFFERING</FONT>" -->
<DIV align="left"><A NAME="020"></A></DIV>

<P align="center">
<B><FONT size="2">PRICING OF THIS OFFERING</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to this offering, there has been no public
market for our common stock. Consequently, the initial public
offering price for our common stock has been determined by
negotiation among us and the representatives of the
underwriters. Among the primary factors considered in
determining the public offering price were:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">prevailing market conditions;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">our results of operations in recent periods;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the present stage of our development;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the market capitalizations and stages of
	development of other companies that we and the representatives
	of the underwriters believe to be comparable to our business; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">estimates of our business potential.
	</FONT></TD>
</TR>

</TABLE>

<!-- link1 "<FONT size="2">LEGAL MATTERS</FONT>" -->
<DIV align="left"><A NAME="021"></A></DIV>

<P align="center">
<B><FONT size="2">LEGAL MATTERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain legal matters with respect to the
validity of common stock offered hereby will be passed upon for
us by Cadwalader, Wickersham&nbsp;&#38; Taft, New York, New
York. A member of Cadwalader, Wickersham&nbsp;&#38; Taft
beneficially owned 97,017&nbsp;shares, representing 0.57% of our
common stock prior to this offering. Certain matters relating to
the common stock will be passed upon for the Underwriters by
Dewey Ballantine&nbsp;LLP, New York, New&nbsp;York.
</FONT>

<!-- link1 "<FONT size="2">EXPERTS</FONT>" -->
<DIV align="left"><A NAME="022"></A></DIV>

<P align="center">
<B><FONT size="2">EXPERTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated statements of operations,
redeemable securities and stockholders&#146; equity and cash
flows (including the related financial statement schedule) of
Cos&#237;, Inc. (formerly Xando Cos&#237;,&nbsp;Inc.) for the
year ended January&nbsp;3, 2000, appearing in this prospectus
and registration statement, have been audited by
Ernst&nbsp;&#38; Young LLP, independent auditors, as set forth
in their reports thereon appearing elsewhere herein and are
included in reliance upon such reports given upon the authority
of such firm as experts in accounting and auditing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The financial statements and schedules for fiscal
2001 and 2000 included in this prospectus and elsewhere in the
registration statement have been audited by Arthur
Andersen&nbsp;LLP, independent public accountants, as indicated
in their reports with respect thereto, and are included herein
in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On May&nbsp;23, 2001 Cos&#237; appointed Arthur
Andersen&nbsp;LLP to replace Ernst&nbsp;&#38; Young LLP as its
principal accountants. The reports of Ernst&nbsp;&#38; Young LLP
on the fiscal 1999 financial statements of Cos&#237; did not
contain an adverse opinion or disclaimer of opinion, nor were
they qualified or modified as to uncertainty, audit scope or
accounting principles. The decision to change accountants was
approved by Cos&#237;&#146;s Board of Directors. There were no
disagreements with the former accountants during fiscal 2000 or
preceding their replacement on any matter of accounting
principles or practices, financial statement disclosure or
auditing scope or procedures, which disagreements, if not
resolved to the former accountants&#146; satisfaction, would
have caused them to make reference to the subject matter of the
disagreement in connection with their reports.
</FONT>

<!-- link1 "<FONT size="2">WHERE YOU CAN FIND MORE INFORMATION</FONT>" -->
<DIV align="left"><A NAME="023"></A></DIV>

<P align="center">
<B><FONT size="2">WHERE YOU CAN FIND MORE INFORMATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This prospectus is part of a registration
statement on Form&nbsp;S-1 that Cos&#237; has filed with the SEC
covering the shares of common stock that Cos&#237; is offering.
This prospectus does not contain all of the information
presented in the registration statement, and you should refer to
that registration statement with its exhibits for further
information. Statements in this prospectus describing or
summarizing any contract or other document are not complete, and
you should review the copies of those documents filed as
exhibits to the registration statement for more detail. You may
read and copy the registration statement at the SEC&#146;s
Public Reference
</FONT>

<P align="center"><FONT size="2">68
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">Room at 450&nbsp;Fifth Street,&nbsp;N.W.,
Washington,&nbsp;D.C. 20549. For information on the operation of
the Public Reference Room, call the SEC at 1-800-SEC-0330. You
can also inspect our registration statement on the Internet at
the SEC&#146;s web site, http://www.sec.gov.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After this offering, we will be required to file
annual, quarterly, and current reports, proxy and information
statements and other information with the SEC. You can review
this information at the SEC&#146;s Public Reference Room or on
the SEC&#146;s web site, as described above.
</FONT>

<P align="center"><FONT size="2">69
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">COSI, INC.</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED FINANCIAL STATEMENTS</FONT></B>

<P align="center">
<B><FONT size="2">INDEX</FONT></B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="87%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Report of Independent Public Accountants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Report of Independent Auditors
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Consolidated Financial Statements:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Consolidated Balance Sheets at January&nbsp;1,
	2001, December&nbsp;31, 2001 and April&nbsp;1, 2002
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Consolidated Statements of Operations for the
	years ended January&nbsp;3, 2000, January&nbsp;1, 2001 and
	December&nbsp;31, 2001 and for the three months ended
	April&nbsp;2, 2001 and April&nbsp;1, 2002
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Consolidated Statements of Redeemable Securities
	and Stockholders&#146; Equity for the years ended
	December&nbsp;31, 2001 and January&nbsp;1, 2001 and for the
	three months ended April&nbsp;1, 2002
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Consolidated Statements of Cash Flows for the
	years ended January&nbsp;3, 2000, January&nbsp;1, 2001 and
	December&nbsp;31, 2001 and for the three months ended
	April&nbsp;2, 2001 and April&nbsp;1, 2002
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Notes to Consolidated Financial Statements
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-1
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "<FONT size="2">REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS</FONT>" -->
<DIV align="left"><A NAME="024"></A></DIV>

<P align="center">
<B><FONT size="2">REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS</FONT></B>

<P align="left">
<FONT size="2">To Cosi, Inc.:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have audited the accompanying consolidated
balance sheets of Cosi, Inc. and subsidiaries (formerly Xando
Cosi, Inc., a Delaware corporation) as of January&nbsp;1, 2001
and December&nbsp;31, 2001, and the related consolidated
statements of operations, redeemable securities and
stockholders&#146; equity and cash flows for the years then
ended. These financial statements are the responsibility of the
Company&#146;s management. Our responsibility is to express an
opinion on these financial statements based on our audits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We conducted our audits in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial
position of Cosi, Inc. as of January&nbsp;1, 2001 and
December&nbsp;31, 2001, and the consolidated results of its
operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the
United States.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">/s/ Arthur Andersen LLP
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Melville, New York
</FONT>

<DIV align="left">
<FONT size="2">April&nbsp;2, 2002
</FONT>
</DIV>

<P align="center"><FONT size="2">F-2
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "<FONT size="2">REPORT OF INDEPENDENT AUDITORS</FONT>" -->
<DIV align="left"><A NAME="025"></A></DIV>

<P align="center">
<B><FONT size="2">REPORT OF INDEPENDENT AUDITORS</FONT></B>

<P align="left">
<FONT size="2">The Board of Directors of Cosi, Inc.:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have audited the accompanying consolidated
statements of operations, redeemable securities and
stockholders&#146; equity and cash flows of Cosi, Inc. (formerly
Xando Cosi, Inc.) for the year ended January&nbsp;3, 2000. These
financial statements are the responsibility of the
Company&#146;s management. Our responsibility is to express an
opinion on these financial statements based on our audit.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We conducted our audit in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In our opinion, the financial statements referred
to above present fairly, in all material respects, the
consolidated results of operations and cash flows of Cosi, Inc.
for the year ended January&nbsp;3, 2000 in conformity with
accounting principles generally accepted in the United States.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="38%"></TD>
	<TD width="62%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">/s/ Ernst &#38; Young LLP
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Stamford, Connecticut
</FONT>

<DIV align="left">
<FONT size="2">November&nbsp;19, 2000
</FONT>
</DIV>

<P align="center"><FONT size="2">F-3
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "<FONT size="2">COSI, INC. CONSOLIDATED BALANCE SHEETS</FONT>" -->
<DIV align="left"><A NAME="026"></A></DIV>

<P align="center">
<B><FONT size="2">COSI, INC.</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED BALANCE SHEETS</FONT></B>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">January 1,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">April 1,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="15" align="center" valign="top">
	<B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">CURRENT ASSETS:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash and cash equivalents
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,062,872</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,469,571</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,568,005</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts receivable, net of allowances of
	$367,038, $219,845 and $231,244
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,964,547</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,198,786</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">815,917</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Inventory
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">910,873</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,403,806</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,452,814</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Prepaid expenses and other current assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">515,268</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">568,353</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">845,622</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total current assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,453,560</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,640,516</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,682,358</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">PROPERTY, EQUIPMENT AND LEASEHOLD<BR>
	IMPROVEMENTS, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,781,207</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25,507,195</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27,022,402</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">INTANGIBLE, SECURITY DEPOSITS AND OTHER ASSETS,
	net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,831,054</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,240,733</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,282,689</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,065,821</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,388,444</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">44,987,449</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="15"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="15" align="center" valign="top">
	<B><FONT size="2">LIABILITIES, REDEEMABLE SECURITIES AND
	STOCKHOLDERS&#146; EQUITY</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="15"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">CURRENT LIABILITIES:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,824,415</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,737,121</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,374,497</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,202,829</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,951,809</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,904,977</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Current portion of other liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">746,751</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,678,880</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,678,880</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Current portion of capital lease obligations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">544,523</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">441,862</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">364,585</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Current portion of long-term debt
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">942,831</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,136,835</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,176,854</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total current liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,261,349</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,946,507</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,499,793</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">OTHER LIABILITIES, net of current portion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,436,047</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,531,364</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,594,695</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">CAPITAL LEASE OBLIGATIONS, net of current portion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">604,636</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">135,236</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58,405</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">LONG-TERM DEBT, net of current portion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,343,786</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,466,022</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,487,387</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,645,818</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,079,129</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,640,280</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">COMMITMENTS AND CONTINGENCIES (Note 13)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">REDEEMABLE SECURITIES:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Series&nbsp;A Convertible Preferred stock &#151;
	$0.01 par value; 2,005,862 authorized, 2,005,862 issued and
	outstanding; aggregate liquidation preference of $17,338,870,
	$18,768,150 and $19,143,513, including accrued dividends of
	$3,297,836, $4,727,116 and $5,102,479, respectively
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,663,989</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,318,205</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,749,802</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Series&nbsp;C Convertible Preferred
	stock&nbsp;&#151; $0.01 par value; 10,510,191 authorized,
	4,717,856, 7,282,782 and 9,312,705 issued and outstanding,
	respectively; aggregate liquidation preference of $45,177,441,
	$75,524,713 and $92,299,485, including accrued dividends of
	$3,826,780, $8,807,592 and $10,298,087,<BR>
	respectively
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">45,031,309</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">73,971,056</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">94,782,876</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total redeemable securities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">61,695,298</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">92,289,261</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">113,532,678</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">STOCKHOLDERS&#146; EQUITY (DEFICIT):
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Common stock&nbsp;&#151; $.01 par value:
	30,000,000 shares authorized, 7,881,771, 7,895,115 and 7,951,365
	shares issued and outstanding, respectively
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">78,818</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">78,951</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">79,515</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Additional paid-in capital
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,573,552</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31,970,196</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31,952,738</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock subscriptions receivable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,974,804</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,974,804</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,974,804</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accumulated deficit
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(75,952,861</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(118,054,289</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(124,242,958</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total stockholders&#146; equity (deficit)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(48,275,295</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(88,979,946</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(95,185,509</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total liabilities, redeemable securities and
	stockholders&#146; equity (deficit)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,065,821</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,388,444</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">44,987,449</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated balance sheets.
</FONT>

<P align="center"><FONT size="2">F-4
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">COSI, INC.</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF
OPERATIONS</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="24%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">For the Years Ended</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">For the Three Months Ended</FONT></B></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">January 3,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">January 1,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">April 2,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">April 1,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(unaudited)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">NET SALES
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">37,262,174</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">51,222,818</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">70,184,136</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,855,850</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,052,054</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">COST OF SALES:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cost of goods sold
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,838,564</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,843,992</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,791,711</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,205,619</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,853,441</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restaurant operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,236,154</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,172,860</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">45,114,495</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,976,081</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,126,978</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">TOTAL COST OF SALES
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">33,074,718</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46,016,852</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">63,906,206</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,181,700</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,980,419</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">GENERAL AND ADMINISTRATIVE EXPENSES
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,024,240</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,774,234</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,361,511</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,735,134</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,620,306</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DEPRECIATION AND<BR>
	AMORTIZATION
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,155,186</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,158,146</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,689,985</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,021,879</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,210,250</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">RESTAURANT PRE-OPENING EXPENSES
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">661,356</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,409,497</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,438,783</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">253,600</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">111,361</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">PROVISION FOR LOSSES ON ASSET IMPAIRMENTS AND
	DISPOSALS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,208,708</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,847,545</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,486,309</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">90,445</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">MERGER COSTS AND RELATED EXPENSES
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,958,748</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">LEASE TERMINATION COSTS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,437,146</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">477,266</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,410,759</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">578,245</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">STOCK COMPENSATION
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,512,571</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34,770,499</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23,460,722</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(35,109,417</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,005,153</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,870,282</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">INTEREST INCOME
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">478,635</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">441,350</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">340,453</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60,699</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29,922</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">INTEREST EXPENSE
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(206,182</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(210,655</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(654,379</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(98,394</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(387,874</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34,498,046</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23,230,027</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(35,423,343</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,042,848</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,228,234</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">PREFERRED STOCK DIVIDENDS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,561,237</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,219,684</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,678,085</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,312,694</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,960,435</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">NET LOSS ATTRIBUTABLE TO COMMON STOCK
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(37,059,283</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(27,449,711</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(42,101,428</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,355,542</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,188,669</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">PER SHARE DATA:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net Loss Per Share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic and diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5.02</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.48</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5.34</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.81</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.78</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Pro Forma basic and diluted (Note&nbsp;16)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.12</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.23</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted Average Common Shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Outstanding:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Actual
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,375,684</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,881,759</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,887,842</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,882,134</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,923,240</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Pro Forma (Note 16)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,676,459</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,557,792</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated statements.
</FONT>

<P align="center"><FONT size="2">F-5
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">COSI, INC.</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF REDEEMABLE
SECURITIES AND STOCKHOLDERS&#146; EQUITY</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Years Ended JANUARY 3, 2000,
JANUARY&nbsp;1, 2001 and DECEMBER&nbsp;31, 2001</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">and for the Three Months Ended April&nbsp;1,
2002</FONT></B>
</DIV>

<TABLE width="100%" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="15%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="27"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="27" align="center" nowrap><B><FONT size="1">Redeemable Securities</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="27" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Series A Convertible</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Series B Convertible</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Series C Convertible</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Preferred Stock</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Preferred Stock</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Preferred Stock</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Redeemable</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Securities</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">BALANCE, December&nbsp;28, 1998
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,998,718</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,705,739</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">457,662</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,974,804</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,680,543</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of preferred stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,144</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">50,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(457,662</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,974,804</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,351,420</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,987,062</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,062,258</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Conversion of preferred stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(130,703</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,155,415</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,155,415</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of warrants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Costs of preferred stock issuance
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(128,113</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(128,113</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Compensation relating to stock option
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Compensation relating to subscriptions receivable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued preferred stock dividend
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,137,944</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,177,005</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,314,949</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accretion of preferred stock to liquidation value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">224,936</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,352</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">246,288</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">BALANCE, January&nbsp;3, 2000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,005,862</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,118,619</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,220,717</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,901,891</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,020,510</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of Series&nbsp;C convertible preferred
	stock, net of issuance costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,497,139</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,455,104</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,455,104</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued preferred stock dividend
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,320,434</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,649,775</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,970,209</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accretion of preferred stock to liquidation value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">224,936</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,539</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">249,475</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">BALANCE, January&nbsp;1, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,005,862</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,663,989</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,717,856</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">45,031,309</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">61,695,298</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of Series&nbsp;C convertible preferred
	stock, net of issuance costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,564,926</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,915,878</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,915,878</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of warrants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Noncash compensation expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued preferred stock dividend
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,429,280</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,980,812</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,410,092</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accretion of preferred stock to liquidation value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">224,936</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43,057</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">267,993</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">BALANCE, December&nbsp;31, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,005,862</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,318,205</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,282,782</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">73,971,056</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">92,289,261</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of Series&nbsp;C convertible preferred
	stock, net of issuance costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,649,600</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,669,907</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,669,907</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of warrants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued preferred stock dividend
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">375,363</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,490,495</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,865,858</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accretion of preferred stock to liquidation value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">56,234</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38,343</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">94,577</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Conversion of senior subordinated debt to
	Series&nbsp;C Convertible Preferred Stock (Note&nbsp;16)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">380,323</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,613,075</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,613,075</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">BALANCE, April&nbsp;1, 2002 (unaudited)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,005,862</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,749,802</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,312,705</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">94,782,876</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">113,532,678</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>

<P align="right">[Additional columns below]

<P>[Continued from above table, first column(s) repeated]

<TABLE width="100%" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="18%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Common Stock</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Additional</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Paid-In</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Subscriptions</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Capital</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Receivable</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Deficit</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">BALANCE, December&nbsp;28, 1998
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,599,066</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">65,990</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,730,781</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,974,804</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,443,867</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,378,100</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">694,245</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,942</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,117,001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,123,943</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of preferred stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Conversion of preferred stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">588,365</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,885</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,124,335</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,130,220</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of warrants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">88,230</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">88,230</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Costs of preferred stock issuance
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Compensation relating to stock option
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,412,458</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,412,458</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Compensation relating to subscriptions receivable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100,113</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100,113</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued preferred stock dividend
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,314,949</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,314,949</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accretion of preferred stock to liquidation value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(246,288</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(246,288</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34,498,046</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34,498,046</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">BALANCE, January&nbsp;3, 2000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,881,676</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">78,817</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,572,918</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,974,804</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(48,503,150</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(20,826,219</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of Series&nbsp;C convertible preferred
	stock, net of issuance costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued preferred stock dividend
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,970,209</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,970,209</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accretion of preferred stock to liquidation value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(249,475</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(249,475</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">95</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">634</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">635</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23,230,027</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23,230,027</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">BALANCE, January&nbsp;1, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,881,771</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">78,818</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,573,552</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,974,804</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(75,952,861</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(48,275,295</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of Series&nbsp;C convertible preferred
	stock, net of issuance costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of warrants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,098,469</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,098,469</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Noncash compensation expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">231,631</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">231,631</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued preferred stock dividend
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,410,092</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,410,092</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accretion of preferred stock to liquidation value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(267,993</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(267,993</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,344</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">133</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66,544</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66,677</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(35,423,343</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(35,423,343</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">BALANCE, December&nbsp;31, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,895,115</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">78,951</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31,970,196</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,974,804</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(118,054,289</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(88,979,946</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of Series&nbsp;C convertible preferred
	stock, net of issuance costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of warrants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">61,407</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">61,407</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued preferred stock dividend
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,865,858</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,865,858</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accretion of preferred stock to liquidation value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(94,577</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(94,577</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Conversion of senior subordinated debt to
	Series&nbsp;C Convertible Preferred Stock (Note&nbsp;16)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(429,865</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(429,865</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">56,250</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">564</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">351,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">351,564</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,228,234</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,228,234</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">BALANCE, April&nbsp;1, 2002 (unaudited)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,951,365</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">79,515</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31,952,738</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,974,804</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(124,242,958</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(95,185,509</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated statements.
</FONT>

<P align="center"><FONT size="2">F-6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "<FONT size="2">COSI, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS</FONT>" -->
<DIV align="left"><A NAME="027"></A></DIV>

<P align="center">
<B><FONT size="2">COSI, INC.</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF CASH
FLOWS</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="28%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">For the Years Ended</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">For the Three Months Ended</FONT></B></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">January 3,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">January 1,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">April 2,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">April 1,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">CASH FLOWS FROM OPERATING ACTIVITIES:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34,498,046</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23,230,027</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(35,423,343</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,042,848</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,228,234</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Adjustments to reconcile net loss to net cash
	used in operating activities:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Depreciation and amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,155,186</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,158,146</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,689,985</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,021,879</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,210,250</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Asset impairments and disposals
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,410,599</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,847,545</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,933,142</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59,701</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Writedown of financing charges
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">88,230</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for bad debts
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">306,925</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">73,330</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock compensation expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,512,571</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Changes in operating assets and liabilities:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts receivable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(245,598</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,653,944</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">765,761</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(219,301</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">382,869</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Inventory
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(108,841</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(397,048</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(492,934</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(66,278</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(49,007</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">667,935</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(409,413</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,309</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(41,956</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(925,196</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,282,931</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">918,150</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,929,135</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,362,623</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,099,059</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,358,273</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(255,229</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(392,582</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(46,811</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued merger and integration
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">639,300</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(639,300</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued contractual lease increases
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">831,784</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">628,401</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">825,772</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">216,931</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">190,577</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Prepaid expenses and other current assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(242,815</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(198,203</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(53,084</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(157,142</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(277,270</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Lease termination accrual
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,437,146</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(437,146</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,201,674</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">578,245</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(127,267</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net cash used in operating activities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,539,696</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,539,107</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(12,299,519</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,925,221</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,349,472</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">CASH FLOWS FROM INVESTING ACTIVITIES:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Purchases of property, equipment and leasehold
	improvements
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(13,795,532</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(18,161,055</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(20,350,590</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,418,893</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,725,456</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Payments made for security deposits
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(224,775</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(186,693</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Payments made for intangible and other assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(721,991</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net cash used in investing activities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(14,742,298</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(18,347,748</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(20,350,590</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,418,893</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,725,456</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">CASH FLOWS FROM FINANCING ACTIVITIES:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Proceeds from issuance of common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,123,943</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">635</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66,677</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,082</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">351,564</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net proceeds from issuance of preferred stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,408,949</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,455,104</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,147,494</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,072,740</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,669,907</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Proceeds from bridge financing notes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,500,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Principal payments on capital lease obligations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(237,981</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(303,783</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(572,060</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,775</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(154,110</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Proceeds from long-term debt
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,998,977</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,269,213</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">772,557</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Principal payments on long-term debt
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(21,740</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(186,947</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(854,516</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(149,426</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(466,556</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net cash provided by financing activities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,773,171</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,963,986</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,056,808</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,811,621</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,173,362</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net increase (decrease)&nbsp;in cash
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">491,177</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,922,869</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(593,301</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,467,507</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,098,434</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">CASH AND CASH EQUIVALENTS, beginning of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,494,564</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,985,741</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,062,872</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,062,872</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,469,571</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">CASH AND CASH EQUIVALENTS, end of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,985,741</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,062,872</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,469,571</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,530,379</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,568,005</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash paid during the year for:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">117,952</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">220,492</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">466,764</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">98,394</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">88,751</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Corporate franchise and income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">68,111</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,931</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">277,198</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">80,337</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,585</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Non-cash financing transactions:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Assets acquired under capital leases
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">915,799</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">134,678</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Conversion of Senior Subordinated Debt to
	Series&nbsp;C Preferred
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,183,210</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Conversion of Warrants to Series&nbsp;C Preferred
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">429,864</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated statements.
</FONT>

<P align="center"><FONT size="2">F-7
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">COSI, INC.</FONT></B>

<DIV>&nbsp;</DIV>

<!-- link1 "<FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</FONT>" -->
<DIV align="left"><A NAME="028"></A></DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<!-- link1 "<FONT size="2">January 3, 2000, January 1, 2001 and December 31, 2001</FONT>" -->
<DIV align="left"><A NAME="029"></A></DIV>

<DIV align="center">
<B><FONT size="2">January&nbsp;3, 2000, January&nbsp;1, 2001 and
December&nbsp;31, 2001</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Description
and Organization of Business</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cosi, Inc. and subsidiaries (the
&#147;Company&#148; or &#147;Cosi&#148;), formerly known as
Xando Cosi, Inc., engages in the business of operating
restaurants, which sell high-quality coffees and sandwiches
along with a variety of coffee beverages, teas, baked goods and
alcoholic beverages. As of December&nbsp;31, 2001, the Company
had 67&nbsp;restaurants in operation in Connecticut, New York,
the District of Columbia, Pennsylvania, Maryland, Massachusetts,
Virginia, Illinois, New&nbsp;Jersey, Michigan, Ohio and
Wisconsin.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;4, 1999, a wholly-owned
subsidiary of the Company merged with Cosi Sandwich Bar, Inc.
(&#147;Cosi&nbsp;SB&#148;). The merger was accounted for as a
pooling of interests (Note&nbsp;3).
</FONT>

<P align="left">
<B><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Summary of
Significant Accounting Policies</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fiscal Year
End</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s fiscal year ends on the Monday
closest to December&nbsp;31. Fiscal years 1999, 2000 and 2001
ended on January&nbsp;3, 2000, January&nbsp;1, 2001 and
December&nbsp;31, 2001, respectively. Fiscal 1999 contained
53&nbsp;weeks and fiscal 2000 and 2001 each contained
52&nbsp;weeks.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principles of
Consolidation</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements include the
accounts of the Company and its wholly owned subsidiaries. All
intercompany accounts and transactions have been eliminated in
consolidation.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and Cash
Equivalents</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company considers all short-term liquid
investments with a maturity of three months or less when
purchased to be cash equivalents. At December&nbsp;31, 2001 and
January&nbsp;1, 2001, $1.4&nbsp;million and $2.8&nbsp;million,
respectively, was invested primarily in commercial paper and
money market accounts and is classified as cash and cash
equivalents in the accompanying consolidated balance sheets.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Concentrations
of Credit Risk</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Financial instruments that potentially subject
the Company to concentrations of credit risk consist principally
of cash deposits and accounts receivable. The Company places its
cash deposits in FDIC insured financial institutions, commercial
paper and money market funds. Cash deposits may exceed FDIC
insured levels from time to time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s accounts receivable consist
principally of receivables from trade or &#147;house&#148;
accounts representing corporate customers, as well as amounts
due from certain landlords for tenant improvement
reimbursements. The Company has established credit procedures,
whereby analyses are performed to control the granting of credit
to customers.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Inventory is stated at the lower of cost (first
in, first out method) or market, and consists principally of
whole bean coffee, liquor, sandwich ingredients and packaging
and related food supplies.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property,
Equipment and Leasehold Improvements</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Property, equipment and leasehold improvements
are stated at cost and include improvements and costs incurred
in the development and construction of new restaurants and
remodels, equipment and leasehold improvements. Depreciation is
computed using the straight-line method over estimated useful
lives, which
</FONT>

<P align="center"><FONT size="2">F-8
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">COSI, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">range from two to fifteen years. Leasehold
improvements are amortized using the straight-line method over
the shorter of their estimated useful lives or the term of the
related leases.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In accordance with Statement of Financial
Accounting Standards (&#147;SFAS&#148;) No.&nbsp;121,
&#147;Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of,&#148; impairment losses are
recorded on long-lived assets on a restaurant by restaurant
basis whenever impairment factors are determined to be present.
The Company considers a history of restaurant operating losses
to be its primary indicator of potential impairment for
individual restaurant locations. The Company has identified
certain units that have been impaired, and recorded charges of
approximately $4.2&nbsp;million, $5.8&nbsp;million and
$7.2&nbsp;million in the statements of operations for fiscal
years 1999, 2000 and 2001, respectively.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangibles,
Security Deposits and Other Assets</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Intangibles and other assets consist of
expenditures associated with obtaining liquor licenses,
trademarks and logos. Liquor licenses are stated at cost which,
in the aggregate, is not in excess of market. Certain of the
liquor licenses have unlimited lives provided that they are
renewed annually and, accordingly, the costs of those liquor
licenses are not amortized. Security deposits primarily consist
of deposits placed on leased locations. Amortization expense
related to intangibles and other assets amounted to
approximately $27,000, $8,400 and $9,400, for fiscal years 1999,
2000 and 2001, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company reviews intangible assets for
impairment, whenever events or changes in circumstances indicate
that the carrying amounts of those assets may not be
recoverable. Management believes that there is no impairment
with respect to such intangible assets at December&nbsp;31, 2001
or January&nbsp;1, 2001.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
Taxes</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company accounts for income taxes in
accordance with the provisions of SFAS No.&nbsp;109,
&#147;Accounting for Income Taxes&#148;. Deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit
carry-forwards. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in
the year in which those temporary differences are expected to be
recovered or settled.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue
Recognition</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company records revenue at the time of the
purchase of its products by its customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December&nbsp;1999, the SEC staff released
Staff Accounting Bulletin (&#147;SAB&#148;) No.&nbsp;101,
&#147;Revenue Recognition,&#148; which provides guidance on the
recognition, presentation and disclosure of revenue in financial
statements. SAB No.&nbsp;101 explains the SEC staff&#146;s
general framework for recognizing revenue and specific criteria
to be met, along with required disclosures related to revenue
recognition. Adoption of SAB No.&nbsp;101 in fiscal 2000 did not
have a material impact on the Company&#146;s financial position
or results of its operations.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair Value of
Financial Instruments</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company accounts for financial instruments in
accordance with SFAS No.&nbsp;107, &#147;Disclosures about Fair
Value of Financial Instruments&#148;. The carrying value of all
financial instruments reflected in the accompanying balance
sheet approximates fair value at January&nbsp;1, 2001 and
December&nbsp;31, 2001.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-Based
Compensation</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company complies with the disclosure-only
provisions of SFAS No.&nbsp;123, &#147;Accounting for
Stock-Based Compensation&#148;. This statement establishes
financial accounting and reporting standards for stock-based
</FONT>

<P align="center"><FONT size="2">F-9
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">COSI, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">employee compensation plans. The provisions of
SFAS No.&nbsp;123 encourage entities to adopt a fair value based
method of accounting for stock compensation plans; however,
these provisions also permit the Company to continue to measure
compensation costs under pre-existing accounting pronouncements.
Pursuant to SFAS No.&nbsp;123, the Company has elected to
continue the accounting set forth in Accounting Principles Board
(&#147;APB&#148;) Opinion No.&nbsp;25, &#147;Accounting for
Stock Issued to Employees&#148; and to provide the necessary pro
forma disclosures (Not&nbsp;11).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March&nbsp;2000, the Financial Accounting
Standards Board (&#147;FASB&#148;) released Interpretation
No.&nbsp;44, &#147;Accounting for Certain Transactions involving
Stock Compensation: an Interpretation of APB
Opinion&nbsp;25&#148;. Interpretation No.&nbsp;44 provides
clarification of certain issues, such as the determination of
who is an employee, the criteria for determining whether a plan
qualifies as a non-compensatory plan, the accounting
consequences of various modifications to the terms of a
previously fixed stock option award and the accounting for an
exchange of stock compensation awards in a business combination.
The Company believes that its practices are in conformity with
this guidance and, accordingly, the adoption of the provisions
of Interpretation No.&nbsp;44 did not have a material impact on
its financial statements.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Loss Per
Share</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company follows the provisions of SFAS
No.&nbsp;128, &#147;Earnings Per Share&#148;. In accordance with
this statement, basic net loss per share is computed by dividing
the net loss attributable to common shareholders (after
deducting preferred stock dividends) by the weighted-average
number of common shares outstanding. Diluted net loss per share
is computed by dividing the net loss attributable to common
shareholders by the weighted-average number of common shares and
dilutive common share equivalents, if any, outstanding. For all
periods presented, the impact of all common share equivalents
has not been included, as their inclusion would be
anti-dilutive. See Note&nbsp;16 for a description of the
calculation of pro forma net loss per share for fiscal 2001.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Segment
Disclosures</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has adopted the provisions of SFAS
No.&nbsp;131, &#147;Disclosures About Segments of an Enterprise
and Related Information&#148;. Pursuant to this pronouncement,
operating segments are defined as components of an enterprise
about which separate financial information is available and is
evaluated regularly by the chief operating decision maker in
deciding how to allocate resources in assessing performance.
Management of the Company considers its operations to be in the
food service industry and, as a result, the Company has one
single reporting operating unit with all sales historically
generated in the United States.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pre-Opening
Costs</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All costs incurred prior to the opening of a
location, which consist primarily of salaries and other direct
expenses incurred with the initial setup of restaurants and
certain costs related to remodels, employee training and general
restaurant management, are expensed as incurred.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advertising
Costs</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Advertising costs are expensed as incurred and
approximated $206,000, $177,000 and $141,000 for fiscal years
1999, 2000, 2001, respectively.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive
Income</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company follows the provisions of SFAS
No.&nbsp;130, &#147;Reporting Comprehensive Income&#148;, which
requires companies to report all changes in equity during a
period, except those resulting from investment by owners and
distributions to owners, for the period in which they are
recognized. Comprehensive (loss) income
</FONT>

<P align="center"><FONT size="2">F-10
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">COSI, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">is the total of net (loss)&nbsp;income and all
other nonowner changes in equity (or other comprehensive
income), such as unrealized gains or losses on securities
classified as available-for-sale, foreign currency translation
adjustments and minimum pension liability adjustments.
Comprehensive income must be reported on the face of the
consolidated statements of operations or the consolidated
statements of stockholders&#146; equity. The Company&#146;s
operations did not give rise to items includable in
comprehensive income that were not already in its net loss for
fiscal years 1999, 2000 and 2001. Accordingly, the
Company&#146;s comprehensive loss is the same as its net loss
for all periods presented.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reclassifications</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain items in the financial statements
presented have been reclassified to conform to the fiscal 2001
presentation.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recently
Issued Accounting Pronouncements</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June&nbsp;1998, the FASB issued SFAS
No.&nbsp;133, &#147;Accounting for Derivative Instruments and
Hedging Activities,&#148; which establishes accounting and
reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and
for hedging activities. SFAS No.&nbsp;133, as amended by SFAS
No.&nbsp;137 and SFAS No.&nbsp;138, is effective for all fiscal
years beginning after June&nbsp;15, 2000 and will not require
retroactive restatement of prior period financial statements.
This statement requires the recognition of all derivative
instruments as either assets or liabilities in the balance
sheet, measured at fair value. Derivative instruments will be
recognized as gains or losses in the period of change. The
adoption of SFAS No.&nbsp;133 during fiscal 2001 did not have a
material impact on the Company&#146;s financial position or
results of its operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July&nbsp;2001, the FASB issued SFAS
No.&nbsp;141, &#147;Business Combinations&#148; and
No.&nbsp;142, &#147;Goodwill and Other Intangible Assets&#148;.
SFAS&nbsp;141 requires all business combinations initiated after
June&nbsp;30, 2001 to be accounted for using the purchase
method. Under SFAS&nbsp;142, goodwill and intangible assets with
indefinite lives are no longer amortized but are reviewed
annually (or more frequently if impairment indicators arise) for
impairment. Separable intangible assets that are not deemed to
have indefinite lives will continue to be amortized over their
useful lives (but with no maximum life) adoption of these
standards in fiscal 2002 will not have a material impact on the
Company&#146;s financial statements, principally because the
Company&#146;s significant business combination (Note&nbsp;3)
was accounted for under the pooling-of-interests method of
accounting in which no goodwill was recorded. The Company&#146;s
intangibles consist of expenditures associated with obtaining
liquor licenses, trademarks and logos. These identifiable
intangibles have indefinite lives and, accordingly, will no
longer be amortized effective January&nbsp;1, 2002 upon adoption
of this Statement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June&nbsp;2001, the FASB issued SFAS
No.&nbsp;143, &#147;Accounting for Asset Retirement
Obligations&#148;. This statement addresses financial and
reporting obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. It
applies to legal obligations associated with the retirement of
long-lived assets that result from acquisition, construction,
development and/or the normal operation of a long-lived asset,
except for certain obligations of lessees. This statement is
effective for financial statements issued for fiscal years
beginning after June&nbsp;15, 2002. The Company believes
adoption of SFAS&nbsp;143 will not have a material effect on its
financial position or results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August&nbsp;2001, the FASB issued SFAS
No.&nbsp;144, &#147;Accounting for the Impairment or Disposal of
Long-Lived Assets&#148;. SFAS 144 supercedes SFAS 121 and APB
Opinion No.&nbsp;30, &#147;Reporting Results of Operations-
Reporting the Effects of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions.&#148; This statement retains the fundamental
provisions of SFAS 121 for recognition and measurement of
impairment, but amends the accounting and reporting standards
for segments of a business to be disposed of. The provisions of
this statement are required to be adopted no later than fiscal
years beginning after December&nbsp;31, 2001. The Company is
currently evaluating the effects of this
</FONT>

<P align="center"><FONT size="2">F-11
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">COSI, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">statement, which the Company does not believe
will have a material impact on the Company&#146;s financial
position or results of its operations.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Use of
Estimates</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States requires management to make estimates and
assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results may differ
from those estimates.
</FONT>

<P align="left">
<B><FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Merger and
Related Costs</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;4, 1999, Cosi SB merged with and
into a wholly owned subsidiary of the Company. As a result of
the merger, Cosi SB became a wholly owned subsidiary of the
Company. The former Cosi SB shareholders were entitled to
receive 11.237 shares of the Company&#146;s common stock for
each share of Cosi SB common stock. As a result, Cosi SB
shareholders received 3,655,093 shares of the Company&#146;s
common stock. In addition, outstanding Cosi SB stock options
were converted at the same exchange factor into options to
purchase approximately 1,811,921 shares of the Company&#146;s
common stock. The merger was intended to qualify as a tax-free
reorganization and was accounted for under the
pooling-of-interests accounting method.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the merger, the Company
recorded costs and expenses of approximately $894,000,
principally for legal and accounting services. Additionally, the
Company wrote down the book value of certain property, equipment
and leaseholds with a net book value of approximately $8.1
million to recognize an impairment due to facility consolidation
and renovation and reconfiguration of certain restaurant
locations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Costs incurred to recognize certain severance,
systems integration and relocation amounted to approximately
$812,000 during fiscal 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For fiscal 1999 revenues and net loss of Xando
and Cosi included in the financial statements are as follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year 1999</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Revenues:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Xando
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,626,158</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cosi
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,636,016</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">37,262,174</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net Loss:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Xando
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(27,418,618</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cosi
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,079,428</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34,498,046</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-12
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">COSI, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<B><FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts
Receivable, net</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Accounts receivable, net, consists of the
following:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">January 1,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts receivable, trade
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">828,095</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">657,102</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Reimbursements due from landlords
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,360,539</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">482,548</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">142,951</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">278,981</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,331,585</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,418,631</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Less: allowance for doubtful accounts
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(367,038</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(219,845</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts receivable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,964,547</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,198,786</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property,
Equipment and Leasehold Improvements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Property, equipment and leasehold improvements
consist of the following:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">January 1,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Leasehold improvements
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,825,166</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,216,827</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Furniture and fixtures
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,306,431</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,279,777</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restaurant equipment
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,843,848</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,455,154</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Computer and telephone equipment
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,146,204</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,600,702</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Construction in progress
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">588,914</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">181,252</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31,710,563</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41,733,712</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Less: accumulated depreciation and amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,929,356</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(16,226,517</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,781,207</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25,507,195</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depreciation and amortization expense for fiscal
years 1999, 2000 and 2001 was $3,128,172, $6,131,888 and
$6,680,585, respectively.
</FONT>

<P align="left">
<B><FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued
Liabilities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Accrued liabilities consists of the following:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">January 1,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Payroll and related benefits and taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,060,734</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,043,941</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Professional and legal costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">232,600</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">188,581</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Taxes payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">321,119</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">473,022</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,588,376</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,246,265</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,202,829</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,951,809</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-Term
Debt</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes
Payable</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company maintains a credit facility in the
original amount of $3 million under a Master Loan and Security
Agreement dated October&nbsp;28, 1999 (the &#147;Equipment Loan
Credit Facility&#148;). The proceeds are required to be used for
the purchases of equipment. Borrowings are secured by the
equipment purchased.
</FONT>

<P align="center"><FONT size="2">F-13
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">COSI, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">Each borrowing under the Equipment Loan Credit
Facility is payable over 36&nbsp;months and the interest rate is
determined at the time of the borrowing. Warrants to purchase
shares of Series&nbsp;C Convertible Preferred Stock were issued
in connection with the Credit Facility. The warrants entitle the
holder to acquire 14,118 shares of the Company&#146;s
Series&nbsp;C Convertible Preferred Stock for $8.50 per share.
As of December&nbsp;31, 2001, there were two notes payable
outstanding under the Equipment Loan Credit Facility. The note
payable due September&nbsp;1, 2003 requires monthly payments of
$35,949, which commenced in October&nbsp;2000, and accrues
interest at a rate of 9.10% per annum. The note payable due
December&nbsp;1, 2003 requires monthly payments of $58,361,
which commenced in December 2001, and accrues interest at a rate
of 8.50% per annum.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the monthly payments, the Company
is required to pay loan fees of $113,738 and $186,158,
respectively, which are due September&nbsp;1, 2003 and
December&nbsp;1, 2003, respectively. The Company is amortizing
these loan fees as additional interest expense over the term of
the notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the credit facility, the Company
has an outstanding note payable of approximately $174,000. The
note is due March 2007 and requires monthly payments of $3,097,
which commenced in May 1998, and accrues interest at a rate of
10% per year.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Senior
Subordinated Debt</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November&nbsp;2001, the Company issued
approximately $9&nbsp;million of senior subordinated notes along
with detachable warrants. The notes bear interest at 13% per
annum, compounded quarterly and payable in arrears, and will
mature in 5&nbsp;years. Interest is payable at maturity of the
notes. The holders of the notes have the right to obtain payment
in cash for the accrued but unpaid interest eighteen months from
the date of issuance of the notes provided written notice
(&#147;Notice&#148;) is given to the Company. Should that occur,
the interest rate would be retroactively reduced to 11.5%
compounded quarterly from the date of issuance through the
Notice date, and thereafter. The Company also has the right to
pre-pay its obligation under the notes by incurring a prepayment
premium, as defined, on the outstanding principal plus accrued
but unpaid interest. Additionally, the notes will be subject to
a mandatory prepayment at the election of the Company or the
holders at any time after the earliest of (i)&nbsp;a material
change in ownership, as defined, (ii)&nbsp;a merger or sale of
substantially all of the Company&#146;s assets, (iii)&nbsp;a
substantial change in corporate structure, as defined, or
(iv)&nbsp;a default by the Company, as defined. The warrants are
exercisable at $.01 per common share and are exercisable for a
period of 5&nbsp;years from the date of issuance. The fair value
ascribed to the warrants was $1,079,808. The value assigned to
the warrants is being recognized as interest expense over the
term of the notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Maturities of long-term debt during the next five
fiscal years and thereafter are as follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="79%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2002
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,136,835</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2003
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,296,912</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2004
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41,434</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2005
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">45,439</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2006
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,015,877</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Thereafter
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">111,942</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,648,439</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Less: Current maturities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,136,835</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Unaccreted debt discount
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,045,582</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Long-term debt, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,466,022</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-14
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">COSI, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<B><FONT size="2">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital Lease
Obligations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2001, the Company is
obligated under capital leases for certain restaurant equipment
with an original cost of $2,019,144. The leases expire at
various dates through 2004. The following is a schedule of
future minimum lease payments for capital leases as of
December&nbsp;31, 2001:
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="83%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2002
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">480,007</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2003
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">138,287</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2004
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,929</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total lease payments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">621,223</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Less: amount representing interest
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">44,125</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Present value of net capital lease payments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">577,098</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Less: current portion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">441,862</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Long-term portion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">135,236</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
Taxes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Significant components of the Company&#146;s
deferred tax assets are as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">January 1,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Deferred tax assets:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net operating loss carryforward
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,611,490</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,577,446</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Deferred compensation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,669,651</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,669,651</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Depreciation expense and Impairment of Long-Lived
	Assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,151,633</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,139,945</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Lease termination accrual
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,110,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,034,619</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Allowance for doubtful accounts
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">135,804</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">81,343</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Contractual lease increases
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">807,635</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,113,171</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">288,758</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">238,190</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,973</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,973</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total deferred tax assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,781,944</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">34,861,338</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Valuation allowance
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23,781,944</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34,861,338</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net deferred taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, the Company has
Federal net operating tax loss carryforwards of approximately
$50.2&nbsp;million, which if not used, will expire through 2021.
Utilization of the net operating losses may be subject to an
annual limitation due to the change in ownership provisions of
the Internal Revenue Code and similar state provisions. These
annual limitations may result in the expiration of these net
operating losses before their utilization. The Company has
recorded a valuation allowance to offset the benefit associated
with the deferred tax assets noted above due to the uncertainty
of realizing the related benefits.
</FONT>

<P align="left">
<B><FONT size="2">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalization</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in
Authorized Number of Shares</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;29, 2001, the Corporation
amended its Certificate of Incorporation to increase the
authorized capital stock from 25,226,580 shares to 45,673,947,
of which 30,000,000 shares will be Common Stock and 15,673,947
shares will be Preferred Stock, designated as follows: 2,005,862
shares of Series&nbsp;A
</FONT>

<P align="center"><FONT size="2">F-15
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">COSI, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">convertible preferred stock, 10,510,191 shares of
Series&nbsp;C convertible preferred stock and 3,157,894 shares
to be designated by the Board of Directors.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Redeemable
Securities</FONT></I></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series&nbsp;A
Convertible Preferred Stock</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the Series&nbsp;A Convertible
Preferred Stock Purchase Agreement (the &#147;Series&nbsp;A
Purchase Agreement&#148;) dated April&nbsp;28, 1998, the Company
issued 1,998,718 shares of Series&nbsp;A Convertible Preferred
Stock (the &#147;Series&nbsp;A&#148;) for approximately
$14&nbsp;million. The proceeds were reduced by $351,800 for
closing costs. The Series&nbsp;A Purchase Agreement provides for
the issuance of one warrant to purchase one share of the
Company&#146;s Common Stock at an exercise price of $.01 (the
&#147;Warrants&#148;) for each 13&nbsp;shares of Series&nbsp;A
issued. The Warrants are exercisable for a period of ten years
from the date of issuance and will expire on the earlier of
(i)&nbsp;the completion of a qualified public offering, as
defined or (ii)&nbsp;the redemption of all of the Series&nbsp;A.
The Company allocated $997,818 of the proceeds to the warrants
to recognize their fair value. In November 1999, the Company
issued an additional 7,144 shares of Series&nbsp;A for $50,000,
based on the same terms and conditions. No additional warrants
were issued.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series&nbsp;B
Convertible Preferred Stock</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Contemporaneously with the Series&nbsp;A Purchase
Agreement, the Company issued 457,662 shares of Series&nbsp;B
Convertible Preferred Stock (the &#147;Series&nbsp;B Executive
Stock&#148;) to certain officers of the Company in exchange for
promissory notes aggregating $2,974,804 pursuant to the terms of
an Executive Stock Agreement the &#147;Executive
Agreement&#148;. The promissory notes accrue interest at an
annual rate of 5.75% and mature in April&nbsp;2003. These notes
are included in stockholders&#146; equity as stock subscriptions
receivable. The Executive Agreement provided that shares of
Series&nbsp;B vest at the rate of 25% per year or immediately
upon a qualified public offering. During 1999, the officers
converted the Series&nbsp;B Executive Stock into an equal number
of shares of common stock subject to the same vesting
provisions. In the event that the Company no longer employs the
stockholders, the Executive Agreement provides for certain
Company stock repurchases and/or stockholder put options.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series&nbsp;C
Convertible Preferred Stock</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;1, 1999, the Company entered into a
bridge financing arrangement (the &#147;Agreement&#148;)
pursuant to which it issued Subordinated Promissory Notes (the
&#147;Promissory Notes&#148;) aggregating $1.5&nbsp;million
maturing on July&nbsp;28, 1999. The Promissory Notes bear
interest at an escalating rate (ranging from 12% to 18%) based
on the number of days from the issuance of the Promissory Notes.
Warrants (the &#147;Bridge Warrants&#148;) to purchase shares of
Series&nbsp;A Convertible Preferred Stock were issued in
connection with the Promissory Notes. The Bridge Warrants
entitle the holder to acquire a certain amount of the
Company&#146;s Series&nbsp;A Convertible Preferred Stock for a
price to be determined at the time of the Company&#146;s next
financing. The amount of preferred stock to be issued would be
based upon a price per share based on certain provisions in the
Agreement. At the time of the Company&#146;s March&nbsp;30, 1999
financing, the terms of the Bridge Warrants were specified to be
for the purchase of 44,115 shares of Series&nbsp;A Convertible
Preferred Stock at $8.50 per share. The fair value of the Bridge
Warrants was determined using the Black-Scholes option-pricing
model and totaled $88,230. On March&nbsp;30, 1999, the
Promissory Notes were exchanged for 176,471 shares of
Series&nbsp;C Convertible Preferred Stock. The value assigned to
the Bridge Warrants was recognized as interest expense and the
carrying amount of the Promissory Notes were converted to
Series&nbsp;C Convertible Preferred Stock upon conversion of the
Promissory Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;30, 1999, in connection with the
1999 Series&nbsp;C Preferred Stock Purchase Agreement (the
&#147;1999 Series&nbsp;C Purchase Agreement&#148;), the Company
issued 2,351,420 shares of Series&nbsp;C convertible preferred
stock (&#147;1999 Series&nbsp;C&#148;), par value $0.01 per
share and received proceeds of approximately
</FONT>

<P align="center"><FONT size="2">F-16
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">COSI, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">$20&nbsp;million (including the exchange for the
Company&#146;s Promissory Notes aggregating $1.5&nbsp;million;
described above). The proceeds were reduced by $128,411 for
closing costs. During 1999, 130,703 shares of Series&nbsp;C were
converted to an equal number of shares of Common Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During fiscal 2000, the Company issued an
aggregate of 2,497,139 shares of Series&nbsp;C, par value $.01
at $9.00 per share, (&#147;2000 Series&nbsp;C&#148;). The
Company received aggregate proceeds of approximately $22.4
million in April&nbsp;2000, June 2000, and September&nbsp;2000.
The terms of the issuance of 2000 Series&nbsp;C are the same as
the March&nbsp;1999 issuance of 1999 Series&nbsp;C, with the
exception that the liquidation preference of the 2000
Series&nbsp;C is $9.00 per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During fiscal 2001, the Company issued 2,564,926
shares of Series&nbsp;C convertible preferred stock, par value
$.01. (&#147;2001 Series&nbsp;C&#148;). The Company received
proceeds of approximately $23.9&nbsp;million, net of issuance
costs. The terms of the issuance of 2001 Series&nbsp;C are the
same as the previous issuances of Series&nbsp;C convertible
preferred stock, with the exception that the liquidation
preference is $9.50 per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each share of Series&nbsp;A and Series&nbsp;C may
be converted into one share of Common Stock at any time at the
option of the Series&nbsp;A and the Series&nbsp;C convertible
preferred stockholders (the &#147;Convertible Preferred
Stockholders&#148;). Such conversion is based on a value of
$7.00, $8.50, $9.00 and $9.50 per share for 1999 Series&nbsp;A,
1999 Series&nbsp;C, 2000 Series&nbsp;C and 2001 Series&nbsp;C,
respectively, with such value adjusted, if necessary, in order
to prevent dilution. The value of accrued but unpaid dividends
is not convertible to common stock upon conversion. The
Series&nbsp;A and each of the 1999, 2000 and 2001 Series&nbsp;C
shares will be automatically converted into Common Stock upon
the earlier of (i)&nbsp;the completion of a qualified public
offering (&#147;Offering&#148;), or (ii)&nbsp;the written demand
of at least 60% of the then outstanding shares of each series of
the shares held by the Convertible Preferred Stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event this conversion does not occur, the
Series&nbsp;A and Series&nbsp;C may be redeemed any time after
April&nbsp;1, 2004 and March&nbsp;30, 2005, respectively, at the
option of the holders of at least a majority of then outstanding
shares at a price of $7.00, $8.50, $9.00 and $9.50, as
applicable, per share (the &#147;Liquidation Value&#148;) plus
all accrued but unpaid dividends. As a result of the redemption
features, the Series&nbsp;A and Series&nbsp;C securities are
presented outside stockholders&#146; equity in the accompanying
consolidated balance sheets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Dividends on the Series&nbsp;A and the 1999, 2000
and 2001 Series&nbsp;C accrue at an annual rate of 8% on the sum
of the Liquidation Value plus all accumulated and unpaid
dividends whether or not they have been declared. In addition to
such dividends, the Convertible Preferred Stockholders are
entitled to participate in dividends declared to common
stockholders, if any, other than those dividends solely payable
in common stock. These dividends are based on amounts that would
have been declared and paid with respect to the Common Stock
issuable to the Convertible Preferred Stockholders upon the
conversion of all Series&nbsp;A and 1999, 2000 and 2001
Series&nbsp;C into common stock immediately prior to the record
date of such dividends. In the event of any liquidation,
dissolution or winding up of the Company, each Convertible
Preferred Stockholder will receive liquidation preferences in
the amount of the greater of (i)&nbsp;the Liquidation Value on
all shares of Series&nbsp;A and 1999, 2000 and 2001
Series&nbsp;C held plus all accrued and unpaid dividends or
(ii)&nbsp;such stockholders&#146; pro rata share of the portion
of all liquidation proceeds payable to the common stockholders
after all required liquidation payments to the Series&nbsp;B
convertible preferred stockholders are made.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of the Series&nbsp;A and 1999, 2000
and 2001 Series&nbsp;C are entitled to vote on all matters
submitted to all stockholders for a vote together with the
common stockholders, all voting together as a single class,
however, the Convertible Preferred Stockholders, voting as a
class, have the right to approve any mergers, acquisitions, and
sale of Company assets, dividends, distributions, stock
repurchases or issuance of any equity securities senior or equal
to the Series&nbsp;A and 1999, 2000 and 2001 Series&nbsp;C. The
Purchase Agreements for Series&nbsp;A, and for 1999, 2000 and
2001 Series&nbsp;C (the &#147;Preferred Stock Purchase
</FONT>

<P align="center"><FONT size="2">F-17
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">COSI, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">Agreements&#148;) and the Executive Agreement
provide for anti-dilution adjustments in connection with any
distribution of the Company&#146;s common stock.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Common Stock
Purchase Rights</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;28, 2001, the Board of Directors
resolved to adopt a Shareholders&#146; Rights Plan &#147;Rights
Plan&#148;. The resolution provides that the Rights Plan will be
effective only upon the consummation of an Offering by the
Company. Upon an Offering a dividend distribution of one right
(&#147;Right&#148;) for each share of common stock, $.01 par
value per share of the Corporation will be made to stockholders.
Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of preferred stock of the
Company designated as Series&nbsp;D Preferred Stock at a price
of $100 per one one-hundredth of a share. The Board of Directors
also resolved to amend its certificate of incorporation,
effective upon the consummation of an Offering by the Company,
to designate 1,000,000 shares of Series&nbsp;D Preferred Stock
for such issuance. The Series&nbsp;D Preferred Stock
(&#147;Series&nbsp;D&#148;), $.01 par value per share will be
nonredeemable and subordinated to any other series of the
Company&#146;s preferred stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Initially, the Rights will not be exercisable,
will not be represented by a separate certificate, and will not
be transferable apart from the common stock. The Rights become
exercisable, unless earlier redeemed, by each record holder upon
the close of business on the day which is the earlier of
(i)&nbsp;the tenth day following the first date there is public
announcement that a person or group of affiliated or associated
persons has acquired beneficial ownership of 15% or more of the
outstanding voting stock of the Company or such earlier date as
determined by the Board of Directors; or (ii)&nbsp;the tenth
business day after the announcement that a person or
group&#146;s intention to commence or engage in a tender or
exchange offer the consummation of which would result in the
ownership of 15% or more of the common stock of the Company by
this person or group.
</FONT>

<P align="left">
<B><FONT size="2">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock Option
Plans</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has several stock option plans that
provide for the granting of incentive and nonqualified stock
options to participants, employees and non-employee directors,
to acquire Common Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There are 6,350,126 shares of Common Stock
reserved for issuance under the Plans. Grants have been made at
fair market value (as determined by the Board of Directors) and
generally vest over a period of five years and expire ten years
from the date of the grant. The Board of Directors approves
vesting terms on an individual basis. The Company accounts for
stock option grants in accordance with APB Opinion No.&nbsp;25,
&#147;Accounting for Stock Issued to Employees.&#148;
</FONT>

<P align="center"><FONT size="2">F-18
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">COSI, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Activity with respect to the Company&#146;s stock
option plans for the years ended January&nbsp;3, 2000,
January&nbsp;1, 2001 and December&nbsp;31, 2001 was as follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Range of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted Average</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">of Options</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise Price</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise Price</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balance as of December&nbsp;28, 1999
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,965,664</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.89&nbsp;- $6.25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.095</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Granted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">618,537</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.097&nbsp;- $7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.507</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Canceled/ Expired
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(84,136</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.89&nbsp;- $7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.593</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balance as of January&nbsp;3, 2000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,500,065</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.89&nbsp;- 10.75</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.675</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Granted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,432,906</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exercised
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(95</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Canceled/ Expired
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(250,586</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.10&nbsp;- 7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.285</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balance as of January&nbsp;1, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,682,290</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.89&nbsp;- 10.75</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.495</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Granted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,410,159</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exercised
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,360</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.03&nbsp;- $7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.176</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Canceled/ Expired
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(368,278</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.10&nbsp;- $7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.814</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balance as of December&nbsp;31, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,714,811</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.89&nbsp;- $10.75</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.064</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There were approximately 1.7 million, 2.0 million
and 2.7 million options exercisable under the Plans as of
January&nbsp;3, 2000, January&nbsp;1, 2001 and December&nbsp;31,
2001, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Had compensation cost for these programs been
determined based upon the fair value at the grant dates
consistent with SFAS No.&nbsp;123, the Company&#146;s pro forma
net loss and net loss per common share would have been as
follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss attributable to common stock:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">As reported
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(37,059,283</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(27,449,711</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(42,101,428</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Pro forma
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(37,704,507</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(28,020,683</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(43,478,843</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss per common share&nbsp;&#151; Basic and
	Diluted:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">As reported
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5.02</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.48</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5.34</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Pro forma
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5.11</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.56</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5.51</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Pro Forma net loss per common share&nbsp;&#151;
	Basic and Diluted:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">As reported
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.12</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Pro forma
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.21</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The fair value of each option grant was estimated
on the date of grant using the Black-Scholes option-pricing
model with the following assumptions:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Fiscal Year Ended</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Expected volatility
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Average expected option life
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5 years</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5 years</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5 years</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Average risk-free interest rate
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.13</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.37</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.57</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Dividend yield
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-19
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">COSI, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to the merger, certain officers of Cosi SB
had received compensatory nonqualified stock options, which were
exercisable upon the underlying shares reaching a targeted
market value. As a result of the merger, these options vested
and a charge to earnings of approximately $4.2 million was
recorded in fiscal year 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Summarized information about the Company&#146;s
stock options outstanding and exercisable at December&nbsp;31,
2001 is as follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="43%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Outstanding</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Exercise Price Range</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Life</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$0.89
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">299,657</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.59</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.89</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">299,657</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.89</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$3.03
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">571,211</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.92</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.03</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">571,211</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.03</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$5.10&nbsp;- $6.25
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,040,654</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.53</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,001,087</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.50</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$7.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,703,289</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">772,962</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$8.50&nbsp;- $10.75
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.75</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.06</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.06</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,714,811</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.97</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.05</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,744,917</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.04</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defined
Contribution Plan</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has a 401(k) Plan (the
&#147;Plan&#148;) for all qualified employees. The Plan provides
for a matching employer contribution of twenty-five percent of
up to four percent of the employees&#146; deferred savings. The
employer contributions vest over five years. The deferred amount
cannot exceed fifteen percent of an individual
participant&#146;s compensation in any calendar year. The
Company&#146;s contribution to the Plan was $11,652, $21,635 and
$26,115 for fiscal years 1999, 2000 and 2001, respectively.
</FONT>

<P align="left">
<B><FONT size="2">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitments
and Contingencies</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Commitments</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is committed under lease agreements
expiring through 2014 for occupancy of its retail restaurants
that were open and operating on December&nbsp;31, 2001 and for
office space at the following minimum annual rentals:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="82%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2002
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,892,528</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2003
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,280,552</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2004
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,465,417</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2005
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,638,201</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2006
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,517,367</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Thereafter
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">44,429,054</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Rental expense for the fiscal years ended 1999,
2000 and 2001 totaled $3,584,831, $6,184,680 and $9,096,207,
respectively. Certain lease agreements have renewal options
ranging from 3&nbsp;years to 15&nbsp;years. In addition, certain
leases obligate the Company to pay additional rent if restaurant
sales reach certain minimum levels (percentage rent). Amounts
incurred under these additional rent provisions were $203,776,
$174,402 and $168,451 for fiscal years 1999, 2000 and 2001,
respectively.
</FONT>

<P align="center"><FONT size="2">F-20
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">COSI, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, future minimum
rental payments required under non-cancelable operating leases
for retail restaurants, which were not yet opened as of
December&nbsp;31, 2001, are as follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2002
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">361,532</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2003
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">517,338</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2004
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">517,338</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2005
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">527,256</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2006
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">534,574</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Thereafter
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,437,319</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subsequent to year-end, the Company entered into
non-cancelable operating leases for future retail restaurant
locations with minimum rental payments as follows:
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2002
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46,549</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2003
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">93,100</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2003
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">93,100</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2004
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">93,100</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2005
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">93,100</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Thereafter
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">562,450</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain of the Company&#146;s lease agreements
provide for scheduled rent increases during the lease term, or
for rental payments commencing at a date other than the date of
initial occupancy. In accordance with SFAS No.&nbsp;13,
&#147;Accounting for Leases,&#148; rent expense is recognized on
a straight-line basis over the term of the respective leases.
The Company&#146;s obligation with respect to these scheduled
rent increases has been presented as a long-term liability in
the accompanying consolidated balance sheets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, the Company had
outstanding approximately $370,000 in standby letters of credit,
which were given as security deposits for certain of the lease
obligations. The letters of credit are fully secured by cash
deposits or marketable securities held in accounts at the
issuing banks. Such deposits are not available for withdrawal,
amounted to approximately $370,000 at December&nbsp;31, 2001 and
are included as a component of Intangible, Security Deposits and
Other Assets on the accompanying consolidated financial
statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In fiscal 1999, 2000 and 2001, the Company
recorded a provision of approximately $3,437,000, $477,000 and
$6,411,000, respectively, relating to lease commitments for
restaurants the Company has closed or is committed to close.
During fiscal 2001, the Company made cash payments totaling
approximately $1,209,100 for those restaurants&#146; leases.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, future minimum
lease payments related to restaurants that have been closed or
are committed to be closed is approximately $16.9 million, with
remaining lease terms ranging from 7 to 13&nbsp;years.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other liabilities in the accompanying
consolidated balance sheet as of January&nbsp;1, 2001 include
$3,000,000 in accrued lease termination costs (including a
current portion of $746,751) and $2,182,798 in accrued
contractual lease increases. Other liabilities as of
December&nbsp;31, 2001 include $8,201,674 in accrued lease
termination costs (including a current portion of $1,678,880)
and $3,008,570 in accrued contractual lease increases.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During fiscal 2000, the Company entered into a
contract to sell a restaurant and assigned the lease to the
buyer. Simultaneously, the Company entered into a guaranty and
surety agreement whereby the Company has guaranteed the first
two years of rental payments to be made by the buyer. In the
event of default by the buyer, the Company will be reinstated as
the primary obligor under the lease.
</FONT>

<P align="center"><FONT size="2">F-21
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">COSI, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase
Commitment</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During fiscal year 1999, the Company entered into
an exclusive coffee supply agreement with an unrelated third
party (&#147;Supplier&#148;). The agreement calls for minimum
purchases, in terms of both quantity and price, to be made by
the Company of coffee beans and related products. The agreement
is in effect through December&nbsp;2002 but may be terminated by
the Company or the Supplier provided 180&nbsp;days notice is
given in advance of such termination.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Self-Insurance</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has a self-insured group health
insurance plan. The Company is responsible for all covered
claims to a maximum liability of $50,000 per participant during
a plan year. Benefits paid in excess of $50,000 are reimbursed
to the plan under the Company&#146;s stop loss policy. In
addition, the Company also has an aggregate stop loss policy
whereby the Company&#146;s liability for total claims submitted
cannot exceed a pre-determined dollar factor based upon, among
other things, past years&#146; claims experience, actual claims
paid, the number of plan participants and monthly accumulated
aggregate deductibles. Group health insurance expense for the
fiscal years 1999, 2000 and 2001 was approximately $472,000,
$800,000 and $968,000, respectively.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Litigation</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">From time to time, the Company is a party to
litigation arising in the normal course of its business
operations. In the opinion of management and counsel, it is not
anticipated that the settlement or resolution of any such
matters will have a material adverse impact on the
Company&#146;s financial condition, liquidity or results of
operations.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employment
Agreements</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During fiscal 2002, the Company has entered into
employment agreements with certain officers and employees. The
term of each agreement is for three years with each agreement
expiring in 2005. The aggregate annual base salaries for the
three year term is $962,500.
</FONT>

<P align="left">
<B><FONT size="2">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related Party
Transactions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company incurs fees with a legal firm, a
partner of which is an owner of certain of the Company&#146;s
equity securities. This firm provides legal services on behalf
of the Company, which amounted to approximately $45,000, $41,000
and $71,000 for the fiscal years 1999, 2000 and 2001.
Furthermore, the Company engages a public relations firm that is
partially owned by a family member of a founding shareholder of
the Company. This firm provides public relations services to the
Company, which amounted to approximately $18,500, $67,000 and
$146,000 for fiscal years 1999, 2000 and 2001, respectively.
Management of the Company believes that these related party
transactions were effected on a basis that approximates fair
market value.
</FONT>

<P align="left">
<B><FONT size="2">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect of the
Events of September 11, 2001</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September&nbsp;2001, the Emerging Issues Task
Force reached a consensus regarding Issue No.&nbsp;01-10,
&#147;Accounting for the Impact of Terrorist Attacks of
September&nbsp;11, 2001,&#148; which requires that losses and
other costs incurred as a result of the September&nbsp;11, 2001,
events be classified as part of income from continuing
operations in the statement of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the events of September&nbsp;11,
2001, a Company owned restaurant location and a kiosk that had
operated in the World Trade Center in New&nbsp;York City were
destroyed. Additionally, due to its proximity to the World Trade
Center, another restaurant in the World Financial Center has
been closed. The Company
</FONT>

<P align="center"><FONT size="2">F-22
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">COSI, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">and its insurer, and its insurance broker are in
disagreement over the amount of insurance coverage for these
locations. Consequently, approximately $1.3&nbsp;million has
been included in the 2001 provisions for asset impairments and
disposals. The Company also maintains business interruption
insurance coverage for which it has submitted claims. No amounts
potentially reimbursable from business interruption policies
have been recognized in the accompanying financial statements.
Any amounts received from these policies will be recognized as
income when received or, earlier, if the Company&#146;s is
notified of the amount of claims approved by its insurers.
</FONT>

<P align="left">
<B><FONT size="2">16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsequent
Events</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sale of
Additional Securities</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the first quarter of fiscal 2002, the
Company issued approximately 1.6&nbsp;million shares of
Series&nbsp;C convertible preferred stock, par value $.01
(&#147;2002 Series&nbsp;C&#148;). The Company received proceeds
of approximately $15.7&nbsp;million. The terms of the issuance
of 2002 Series&nbsp;C preferred convertible stock are the same
as the previous issuances, with the exception that the
liquidation preference is $9.50&nbsp;per share.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Senior
Subordinated Debt</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the first quarter of fiscal 2002, the
Company issued $500,000 of senior subordinated notes with
detachable warrants. The fair value ascribed to the warrants was
$61,407. The terms of the notes and warrants issued are the same
as those issued during fiscal year 2001 (Note&nbsp;7).
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Conversion of
Senior Subordinated Debt</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;20, 2002, holders of senior
subordinated debt and the Company converted senior subordinated
debt and warrants with a fair value of $3,638,149 into
380,323.67 shares of 2002 Series&nbsp;C Preferred Stock. The
gain on this early extinguishment of the subordinated debt was
not material to the unaudited results of operations for the
three months ended April&nbsp;2, 2002.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Public
Offering</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In February, the Company announced it is
considering an underwritten initial public offering of its
common stock. Upon the effectiveness of a public offering, the
Company&#146;s Series&nbsp;A and Series&nbsp;C convertible
preferred stock automatically converts to common stock.
Additionally, the Company intends to exercise its option to
require all outstanding warrants to be exercised. Accordingly,
pro forma per share data has been presented in the accompanying
statements of operations for fiscal 2001 and for the three
months ended April&nbsp;2, 2002 (unaudited). Pro forma per share
information has been calculated before the effect of dividends
on preferred stock and by reflecting the weighted average shares
of preferred stock and warrants as common stock outstanding for
the respective periods.
</FONT>

<P align="left">
<B><FONT size="2">17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unaudited
Interim Consolidated Financial Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The unaudited consolidated financial information
for the three months ended April&nbsp;2, 2001 and April&nbsp;1,
2002 has been prepared in accordance with generally accepted
accounting principles for interim financial information. In the
opinion of the Company&#146;s management, these unaudited
consolidated financial statements reflect all adjustments
necessary, consisting of normal recurring adjustments, for a
fair presentation of such data on a basis consisted with that of
the audited data presented herein. The consolidated results of
operations for interim periods are not necessarily indicative of
results to be expected for a full year.
</FONT>

<P align="center"><FONT size="2">F-23
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON
SCHEDULE</FONT></B>

<P align="left">
<FONT size="2">To Cosi, Inc.:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have audited, in accordance with auditing
standards generally accepted in the United States, the
consolidated financial statements of Cosi, Inc. and subsidiaries
(formerly Xando Cosi, Inc., a Delaware corporation) included as
of January&nbsp;1, 2001 and December&nbsp;31, 2001, and for the
years then ended, in this filing and have issued our report
thereon dated April&nbsp;2, 2002. Our audits were made for the
purposes of forming an opinion on the basic financial statements
taken as a whole. The accompanying schedule is the
responsibility of the Company&#146;s management and is presented
for purposes of complying with the Securities and Exchange
Commission&#146;s rules and is not part of the basic financial
statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial
statements and, in our opinion, fairly states in all material
respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="38%"></TD>
	<TD width="62%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">/s/ ARTHUR ANDERSEN LLP
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Melville, New York
</FONT>

<DIV align="left">
<FONT size="2">April&nbsp;2, 2002
</FONT>
</DIV>

<P align="center"><FONT size="2">S-1
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">REPORT OF INDEPENDENT AUDITORS ON
SCHEDULE</FONT></B>

<P align="left">
<FONT size="2">The Board of Directors of Cos&#237;, Inc.:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have audited the consolidated statements of
operations, redeemable securities and stockholders&#146; equity
and cash flows of Cos&#237;, Inc. (formerly Xando Cos&#237;,
Inc.) for the year ended January&nbsp;3, 2000, and have issued
our report thereon dated November&nbsp;19, 2000 (included
elsewhere in this Registration Statement). Our audit also
included Schedule&nbsp;II&nbsp;&#151; Valuation and Qualifying
Accounts included in this Registration Statement. This schedule
is the responsibility of the Company&#146;s management. Our
responsibility is to express an opinion based on our audit.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In our opinion, the financial statement schedule
referred to above, when considered in relation to the basic
financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">/s/ ERNST &#38; YOUNG LLP
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Stamford, Connecticut
</FONT>

<DIV align="left">
<FONT size="2">November&nbsp;19, 2000
</FONT>
</DIV>

<P align="center"><FONT size="2">S-2
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="right">
<B><FONT size="2">SCHEDULE II</FONT></B>

<P align="center">
<B><FONT size="2">COSI, INC. AND SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">VALUATION AND QUALIFYING ACCOUNTS</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Three Years Ending December&nbsp;31,
2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Balance at</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Charged to</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Charged to</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Beginning</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Costs and</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Other Accounts</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Deductions</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Balance at</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">of Period</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Expenses</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Describe)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Describe)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">End of Period</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">(in $000s)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">JANUARY 3, 2000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Allowance for doubtful accounts receivable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">62.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">300.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(55.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)(a)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">306.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Lease termination reserve
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,437.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(b)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,437.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued merger and integration costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,192.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(553.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)(c)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">639.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">JANUARY 1, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Allowance for doubtful accounts receivable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">306.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">88.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(28.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)(a)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">367.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Lease termination reserve
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,437.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">477.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(914.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)(b)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,000.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued merger and integration costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">639.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">55.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(695.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)(c)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DECEMBER 31, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Allowance for doubtful accounts receivable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">367.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(150.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)(a)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">220.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Lease termination reserve
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,000.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,410.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,209.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)(b)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,201.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">NOTES:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(a)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Write-off of uncollectable accounts.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(b)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Payments to landlords and others for leases on
	closed stores.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(c)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Payments of merger and integration costs.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">S-3
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<IMG src="y59517y59517l2.gif">

<P align="center">


<DIV>&nbsp;</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">PART
II.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INFORMATION NOT REQUIRED IN
PROSPECTUS</FONT></B>

<P align="left">
<B><FONT size="2">Item&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Other
Expenses of Issuance and Distribution</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Set forth below is an estimate of the approximate
amount of the fees and expenses (other than underwriting
commissions and discounts) payable by Cos&#237; in connection
with this offering.
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Securities and Exchange Commission Registration
	Fee
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,520</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">National Association of Securities Dealers Inc.
	Registration Fee
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,500</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Nasdaq National Market Listing Fees
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Printing Expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Legal Fees and Expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounting Fees and Expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Miscellaneous
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Item&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Indemnification
of Directors and Officers</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Section&nbsp;145 of the DGCL permits
indemnification of officers, directors, and other corporate
agents under certain circumstances and subject to certain
limitations. Our certificate of incorporation and by-laws
provide that we shall indemnify our directors and officers, and
anyone who is or was serving at our request as a director,
officer, employee, fiduciary, or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, to
the fullest extent permitted under Delaware law. In addition, we
have entered into separate indemnification agreements with our
directors and executive officers which require us, among other
things, to indemnify them against certain liabilities which may
arise by reason of their status or service (other than
liabilities arising from acts or omissions not in good faith or
willful misconduct). These indemnification provisions and the
indemnification agreements entered into between us and our
executive officers and directors may be sufficiently broad to
permit indemnification of our executive officers and directors
for liabilities (including reimbursement of expenses incurred)
arising under the Securities Act of 1933, as amended.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We maintain directors&#146; and officers&#146;
liability insurance against any actual or alleged error,
misstatement, misleading statement, act, omission, neglect or
breach of duty by any director or officer, excluding certain
matters including fraudulent, dishonest or criminal acts or self
dealing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Underwriting Agreement filed as
Exhibit&nbsp;1.1 to this registration statement provides for
indemnification by the Underwriters of us and our officers and
directors for certain liabilities arising under the Securities
Act of 1933, as amended, or otherwise.
</FONT>

<P align="left">
<B><FONT size="2">Item&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Recent
Sales of Unregistered Securities</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since April&nbsp;1, 1999, the Registrant and its
Predecessors have sold and issued the following unregistered
securities:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;Issuances of shares of Common Stock
other than pursuant to exercise of employee stock options.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;4, 1999, in connection with the
merger of a subsidiary of the Registrant with Cos&#237; Sandwich
Bar, Inc., the Registrant issued to the former shareholders of
Cos&#237; Sandwich Bar, Inc. 11.237 shares of Common Stock in
exchange for each share of Cos&#237; Sandwich Bar, Inc., Common
Stock outstanding immediately prior to the merger for an
aggregate total of 3,655,814.90 shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;4, 1999, pursuant to the
conversion of 209,600 shares of the Registrant&#146;s
Series&nbsp;B Convertible Preferred Stock by Andrew Stenzler,
the Registrant issued 209,600 shares of its Common Stock to
Mr.&nbsp;Stenzler.
</FONT>

<P align="center"><FONT size="2">II-1
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;4, 1999, pursuant to the
conversion of 209,600 shares of the Registrant&#146;s
Series&nbsp;B Convertible Preferred Stock by Nicholas Marsh, the
Registrant issued 209,600 shares of its Common Stock to
Mr.&nbsp;Marsh.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;4, 1999, pursuant to the
conversion of 38,462 shares of the Registrant&#146;s
Series&nbsp;B Convertible Preferred Stock by David Kaufman, the
Registrant issued 38,462 shares of its Common Stock to
Mr.&nbsp;Kaufman.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;4, 1999, pursuant to the
conversion of 130,703 shares of the Registrant&#146;s
Series&nbsp;C Preferred by Ziff Asset Management, L.P.
(&#147;ZAM&#148;), the Registrant issued 130,703 shares of its
Common Stock to ZAM.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;4, 2001, the Registrant sold
2,858&nbsp;shares of its Common Stock to two outside consultants
in exchange for full satisfaction of invoices for consulting
services for an aggregate amount of $20,000, or $7.00 per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;Issuances of Shares of Series&nbsp;C
Preferred Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;20, 2000, the Registrant issued a
total of 898,549.33&nbsp;shares of Series&nbsp;C Convertible
Preferred Stock (&#147;Series&nbsp;C Preferred&#148;) to outside
investors, most of which were existing shareholders of the
Registrant, for an aggregate purchase price of $8,086,941, or
$9.00 per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On April&nbsp;12, 2000, the Registrant issued a
total of 229,268&nbsp;shares of Series&nbsp;C Preferred to
outside investors, most of which were existing shareholders of
the Registrant, for an aggregate purchase price of $1,063,412,
or $9.00 per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;10, 2000, the Registrant issued a
total of 8,250 shares of Series C Preferred to outside
investors, most of which were existing shareholders of the
Registrant, for an aggregate purchase price of $74,250, or $9.00
per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;30, 2000, the Registrant issued a
total of 683,204&nbsp;shares of Series&nbsp;C Preferred to
outside investors, most of which were existing shareholders of
the Registrant, for an aggregate purchase price of $6,148,845,
or $9.00 per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;30, 2000, the Registrant issued
a total of 677,866 shares of Series&nbsp;C Preferred to outside
investors, most of which were existing shareholders of the
Registrant, for an aggregate purchase price of $6,100,794, or
$9.00 per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;31, 2001, the Registrant issued a
total of 1,517,482 shares of Series&nbsp;C Preferred to outside
investors, most of which were existing shareholders of the
Registrant for an aggregate purchase price of $14,416,168, or
$9.50 per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;31, 2001, the Registrant issued a
total of 73,758 shares of Series&nbsp;C Preferred to an existing
shareholder of the Registrant for an aggregate purchase price of
$700,701, or $9.50 per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On May&nbsp;10, 2001, the Registrant issued a
total of 868,822&nbsp;shares of Series&nbsp;C Preferred to
outside investors, most of which were existing shareholders of
the Registrant, for an aggregate purchase price of $8,250,009,
or $9.50 per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;1, 2001, the Registrant issued a
total of 105,264 shares of Series&nbsp;C Preferred to an outside
investor for an aggregate purchase price of $1,000,008, or $9.50
per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;23, 2002, the Registrant issued
a total of 2,029,923&nbsp;shares of Series&nbsp;C to partners of
William Blair &#38; Company and outside investors, most of which
were existing shareholders of the Registrant, for an aggregate
purchase price of $19,284,229.37, or $9.50 per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;Option Issuances to, and Exercises by,
Employees, Directors and Consultants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">From April&nbsp;1, 1999 to April&nbsp;1, 2002,
the Registrant issued options to purchase a total of 4,091,018
shares of Common Stock at a weighted-average exercise price of
$7.00 per share to 1,794 employees. No
</FONT>

<P align="center"><FONT size="2">II-2
</FONT>

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<DIV align="left">
<FONT size="2">consideration was paid to the Registrant by any
recipient of any of the forgoing options for the grant of such
options.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;1, 1999, the Registrant issued a
stock option to purchase 5,050&nbsp;shares of Common Stock at an
exercise price of $7.00 per share, to an outside attorney in
consideration of legal services rendered.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;23, 1999, the Registrant issued
a stock option to purchase 11,237&nbsp;shares of Common Stock at
an exercise price of $5.93 per share, to an outside consultant
in consideration of management consulting services rendered.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;7, 2000, the Registrant issued
stock options to purchase 5,000&nbsp;shares of its Common Stock
at an exercise price of $7.00 per share, to two outside
accountants in consideration of accounting services rendered.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;15, 2000, the Registrant sold 95
shares of its Common Stock to an employee for aggregate
consideration of $635, or approximately $6.68 per share,
pursuant to the exercise of outstanding stock options.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;10, 2001, the Registrant issued
to a stock option to purchase 19,156&nbsp;shares of its Common
Stock at an exercise price of $7.00 per share, to an outside
recruiter in consideration of executive recruitment services
rendered.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;15, 2001, the Registrant issued
a stock option to purchase 20,000&nbsp;shares of Common Stock at
an exercise price of $7.00 per share, to an outside consultant
in consideration of consulting services rendered.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;1, 2001, the Registrant sold 400
shares of its Common Stock to an employee for aggregate
consideration of $2,500, or approximately $6.25 per share,
pursuant to the exercise of outstanding stock options.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On April&nbsp;1, 2000, the Registrant issued a
stock option to purchase 50,000&nbsp;shares of its Common Stock
at an exercise price of $7.00 per share, to two outside
consultants in consideration of consulting services rendered.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On July&nbsp;13, 2001, the Registrant sold 9,319
shares of its Common Stock to an employee for aggregate
consideration of $38,803.92, or approximately $4.16 per share,
pursuant to the exercise of outstanding stock options.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;20, 2001, the Registrant issued
a stock option to purchase 5,000&nbsp;shares of its Common Stock
at an exercise price of $7.00 per share, to an outside
consultant in consideration of store design services rendered.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;31, 2001, the Registrant issued
stock options to purchase 150,000&nbsp;shares of its Common
Stock at an exercise price of $7.00 per share, to four outside
consultants in consideration of consulting services rendered.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;31, 2001, the Registrant issued
a stock option to purchase 20,000&nbsp;shares of its Common
Stock at an exercise price of $7.00 per share, to an outside
attorney in consideration of legal services rendered.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;30, 2002, the Registrant sold
56,250 shares of its Common Stock to a former director for
aggregate consideration of $351,562.50, or approximately $6.25
per share, pursuant to the exercise of outstanding stock options.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;11, 2002, the Registrant sold 41
shares of its Common Stock to an employee for aggregate
consideration of $287, or approximately $7.00 per share,
pursuant to the exercise of stock options.
</FONT>

<P align="center"><FONT size="2">II-3
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;Issuances of Warrants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;28, 1999, the Registrant issued a
stock purchase warrant to purchase 14,118&nbsp;shares of its
Series&nbsp;C Preferred Stock at an exercise price of $8.50 per
share, to Third Coast Capital, a division of DVI Financial
Services, Inc., pursuant to a Master Loan and Security Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;6, 2001, the Registrant issued
stock purchase warrants to purchase 703 shares of Common Stock
at $0.01 per share to outside investors, most of which were
existing shareholders of the Registrant, pursuant to a Note and
Warrant Purchase Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;7, 2001, the Registrant issued
stock purchase warrants to purchase 92,077 shares of Common
Stock at $0.01 per share to outside investors, most of which
were existing shareholders of the Registrant, pursuant to a Note
and Warrant Purchase Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;27, 2001, the Registrant issued
a stock purchase warrant to purchase 176 shares of Common Stock
at $0.01 per share to an existing shareholder of the Registrant,
pursuant to a Note and Warrant Purchase Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;10, 2001, the Registrant issued
a stock purchase warrant to purchase 26 shares of Common Stock
at $0.01 per share to an existing shareholder of the Registrant,
pursuant to a Note and Warrant Purchase Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;18, 2002, the Registrant issued a
stock purchase warrant to purchase 8,785 shares of Common Stock
at $0.01 per share to outside investors, most of which were
existing shareholders of the Registrant, pursuant to a Note and
Warrant Purchase Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(e)&nbsp;Issuances of Promissory Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;6, 2001, the Registrant sold
promissory notes in the principal amount of $40,000, to outside
investors, most of which were existing shareholders of the
Registrant, pursuant to a Note and Warrant Purchase Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;7, 2001, the Registrant sold
promissory notes in the principal amount of $5,240,046, to
outside investors, most of which were existing shareholders of
the Registrant, pursuant to a Note and Warrant Purchase
Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;27, 2001, the Registrant sold
promissory notes in the principal amount of $10,000, to an
outside investor and existing shareholder of the Registrant,
pursuant to a Note and Warrant Purchase Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;18, 2002, the Registrant sold a
promissory note in the principal amount of $500,000, to outside
investors, most of which were existing shareholders of the
Registrant, pursuant to a Note and Warrant Purchase Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There were no underwriters employed in connection
with any of the transactions set forth in Item&nbsp;15.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The issuances described in Items 15(a), 15(b),
15(d) and 15(e) were deemed to be exempt from registration under
the Securities Act in reliance on Section&nbsp;4(2) of the
Securities Act as transactions by an issuer not involving a
public offering, including pursuant to Rule&nbsp;504 of
Regulation&nbsp;D, promulgated thereunder.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The issuances described in Item&nbsp;15(c) were
deemed to be exempt from registration under the Securities Act
in reliance on Rule&nbsp;701 promulgated thereunder as
transactions pursuant to compensatory benefit plans and
contracts relating to compensation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The recipients of securities in each such
transaction represented their intention to acquire the
securities for investment only and not with a view to or for
sale in connection with any distribution thereof and appropriate
legends were affixed to the share certificates and other
instruments issued in such transactions. All recipients either
received adequate information about the Registrant or had
access, through employment or other relationships, to such
information.
</FONT>

<P align="center"><FONT size="2">II-4
</FONT>

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<P align="left">
<B><FONT size="2">Item&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exhibits
and Financial Statement Schedules</I></FONT></B>

<P align="left">
<FONT size="2">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Description of Exhibit</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1.1*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Underwriting Agreement.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">2.1&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Merger Agreement by and among Xando,
	Incorporated, Xando Merger Corp. and Cos&#237; Sandwich Bar,
	Inc., dated as of October&nbsp;4, 1999.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.1&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Amended and Restated Certificate of
	Incorporation of Cos&#237;, Inc.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.2&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Amended and Restated By-Laws of
	Cos&#237;, Inc.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.1*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Certificate of Common Stock.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.2&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Rights Agreement between Cos&#237;, Inc.
	and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as
	Rights Agent.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.3&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amended and Restated Registration Agreement,
	dated as of March&nbsp;30, 1999.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">5.1*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Opinion of Cadwalader, Wickersham&nbsp;&#38; Taft
	as to the legality of the securities being registered.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.1&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amended and Restated Cos&#237; Stock Incentive
	Plan.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.2&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Cos&#237; Employee Stock Purchase Plan.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.3&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Cos&#237; Non Employee Director Stock Incentive
	Plan.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.4&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Cos&#237; Deferred Stock Plan.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.5.1&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Employment Agreement between Cos&#237; and Andy
	Stenzler, effective as of January&nbsp;1, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.5.2&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Employment Agreement between Cos&#237; and Jay
	Wainwright, effective as of January&nbsp;1, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.5.3&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Employment Agreement between Cos&#237; and Nick
	Marsh, effective as of January&nbsp;1, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.5.4&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Employment Agreement between Cos&#237; and David
	Orwasher, effective as of January&nbsp;1, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.5.5&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Employment Agreement between Cos&#237; and Shep
	Wainwright, effective as of January&nbsp;1, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">21.1&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Subsidiaries of Cos&#237;, Inc.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.1.1*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Cadwalader, Wickersham &#38; Taft.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.1.2&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Arthur Andersen LLP, dated as of
	April&nbsp;15, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.1.3&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Ernst &#38; Young LLP, dated as of
	April&nbsp;15, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">24.1&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Power of Attorney (included on the signature page
	of this registration statement).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">99.1&#134;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Letter of the Registrant, addressed to the
	Securities and Exchange Commission, regarding representations to
	the Registrant from Arthur Andersen LLP.
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">&#134;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Filed herewith.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="2%"></TD>
	<TD width="98%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">#&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Previously filed.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">*&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">To be filed by amendment.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial
Statement Schedules
</FONT>

<P align="left">
<B><FONT size="2">Item&nbsp;17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Undertakings</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cos&#237; hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting
Agreement certificates in such denominations and registered in
such names as required by the Underwriters to permit prompt
delivery to each purchaser. Insofar as indemnification by
Cos&#237; for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of
Cos&#237; pursuant to the provisions referenced in Item&nbsp;14
of this Registration Statement or otherwise, Cos&#237; has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Cos&#237; of
expenses incurred or paid by a director, officer, employee or
agent of Cos&#237; in the successful defense of any action, suit
or proceeding) is asserted by such director, officer, employee
or agent in connection with the securities being registered
hereunder, Cos&#237; will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to
a court of
</FONT>

<P align="center"><FONT size="2">II-5
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final
adjudication of such issue.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cos&#237; hereby undertakes that:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(1)&nbsp;For purposes of determining any
	liability under the Securities Act, the information omitted from
	the form of Prospectus filed as part of this Registration
	Statement in reliance upon Rule&nbsp;430A and contained in a
	form of prospectus filed by Cos&#237; pursuant to
	Rule&nbsp;424(b)(1) or (4)&nbsp;or 497(h) under the Securities
	Act shall be deemed to be part of this Registration Statement as
	of the time it was declared effective; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(2)&nbsp;For the purpose of determining any
	liability under the Securities Act, each post-effective
	amendment that contains a form of Prospectus shall be deemed to
	be a new registration statement relating to the securities
	offered therein, and the offering of such securities at the time
	shall be deemed to be the initial bona fide offering thereof.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">II-6
</FONT>

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<!-- link1 "<FONT size="2">SIGNATURES</FONT>" -->
<DIV align="left"><A NAME="030"></A></DIV>

<P align="center">
<B><FONT size="2">SIGNATURES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, Cos&#237; has duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, New York, on
April&nbsp;17, 2002.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="38%"></TD>
	<TD width="62%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">COS&#205;, INC.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="38%"></TD>
	<TD width="2%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">By:&nbsp;</FONT></TD>
	<TD align="center">
	<FONT size="2">/s/ANDREW M. STENZLER
	</FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="38%"></TD>
	<TD width="62%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	<FONT size="2">Andrew M. Stenzler
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	<I><FONT size="2">Chairman and Chief Executive Officer</FONT></I></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below hereby constitutes and appoints
Andrew M. Stenzler and Kenneth S. Betuker, and each of them, his
or her true and lawful attorneys-in-fact and agents, each acting
alone, with full power of substitution and resubstitution, for
him or her and in his or her name, place and stead, in any and
all capacities, to sign any and all amendments, including
post-effective amendments or supplements to this Registration
Statement, and to file the same, with all exhibits thereto and
all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto each of said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite, necessary and
appropriate to be done with respect to this Registration
Statement or any amendments or supplements hereto in and about
the premises, as fully to all intents and purposes as he or she
might or could do in person, and hereby ratifies and confirms
all said attorneys-in-fact and agents, and each of them, or his
substitute or substitutes, may lawfully do or cause to be done
by virtue thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed on
April&nbsp;17, 2002 by the following persons in the capacities
indicated.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Position</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">/s/ ANDREW M. STENZLER<BR>
	<HR size="1" noshade>Andrew M. Stenzler
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">Chairman of the Board of Directors and Chief
	Executive Officer (Principal Executive Officer)
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">/s/ JONATHAN M. WAINWRIGHT, JR.<BR>
	<HR size="1" noshade>Jonathan M. Wainwright, Jr.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">President
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">/s/ KENNETH S. BETUKER<BR>
	<HR size="1" noshade>Kenneth S. Betuker
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">Chief Financial Officer (Principal Financial
	Officer and Principal Accounting Officer)
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">/s/ NICHOLAS MARSH<BR>
	<HR size="1" noshade>Nicholas Marsh
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">Director
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">/s/ TERRY D. DIAMOND<BR>
	<HR size="1" noshade>Terry D. Diamond
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">Director
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">/s/ CREED L. FORD, III<BR>
	<HR size="1" noshade>Creed L. Ford, III
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">Director
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-7
</FONT>
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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="62%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Position</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ ERIC J. GLEACHER<BR>
	<HR size="1" noshade>Eric J. Gleacher
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">Director
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ D. IAN MCKINNON<BR>
	<HR size="1" noshade>D. Ian McKinnon
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">Director
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ JEFFERY M. STORK<BR>
	<HR size="1" noshade>Jeffery M. Stork
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">Director
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ GREGORY J. WOOLLEY<BR>
	<HR size="1" noshade>Gregory J. Woolley
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">Director
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-8
</FONT>
</BODY>
</HTML>
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{"company-data": {"conformed-name": "COSI INC", "cik": "0001171014", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-86390", "film-number": "02613301"}, "business-address": {"street1": "COSI INC", "street2": "242 WEST 38TH STREET", "city": "NEW YORK", "state": "NY", "zip": "10018", "phone": "2126531600"}}
COSI, INC.
Table of Contents
As filed with the Securities and Exchange
Commission on April 17, 2002
Registration
No.
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
COSÍ, INC.
(Exact name of registrant as specified in its
charter)
Delaware
5812
06-1393745
(State or other jurisdiction of
(Primary Standard Industrial
(I.R.S. Employer
incorporation or organization)
Classification Code Number)
Identification No.)
242 West 36th Street
New York, New York 10018
(212) 653-1600
(Address, including zip code, and telephone
number, including area code, of registrant's principal
executive offices)
Andrew M. Stenzler
Chairman and Chief Executive Officer
242 West 36th Street
New York, New York 10018
(212) 653-1600
(Name, address, including zip code, and
telephone number, including area code, of agent for
service)
Copies to:
William P. Mills, III, Esq.
Morton A. Pierce, Esq.
Cadwalader, Wickersham & Taft
Dewey Ballantine LLP
100 Maiden Lane
1301 Avenue of the Americas
New York, New York 10038
New York, New York 10019
(212) 504-6000
(212) 259-8000
(212) 504-6666 (FAX)
(212) 259-6333 (FAX)
Approximate Date of Commencement of Proposed
Sale to the Public
: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this
Form are being offered on a delayed or continuous basis pursuant
to Rule 415 under the Securities Act of 1933, check the
following
box.
o
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under
the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering.
o
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act of 1933,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same
offering.
o
If this Form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act of 1933,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same
offering.
o
If delivery of the prospectus is expected to be
made pursuant to Rule 434 under the Securities Act of 1933,
check the following
box.
o
CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities to Be Registered and Sold(1)
Amount to Be
Registered(1)
Proposed Maximum
Offering Price
Per Share
Proposed Maximum
Aggregate Offering Price(2)
Amount of
Registration
Fee
Common Stock, par value $0.01 per share(3)
—
$—
$60,000,000
$5,520
(1)
Includes a maximum
	of                   shares
	that may be purchased by the Underwriters to cover
	over-allotments, if any.
(2)
Estimated solely for the purpose of calculating
	the registration fee pursuant to Rule 457 under the
	Securities Act of 1933.
(3)
Includes associated rights to purchase a fraction
	of a share of Series D Preferred Stock.
The Registrant hereby amends this Registration
Statement on a date or dates as may be necessary to delay its
effective date until the Registrant shall file a further
amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended, or
until the Registration Statement shall become effective on a
date as the Commission, acting pursuant to said
Section 8(a), may determine.
Table of Contents
Information contained herein is
subject to completion or amendment. A registration statement
relating to these securities has been filed with the Securities
and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration
statement becomes effective. This prospectus supplement shall
not constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in any
State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such State.
SUBJECT TO COMPLETION,
DATED                     ,
2002
Shares
Common Stock
Prior to this offering, there has been no public
market for our common stock. The initial public offering price
of our common stock is expected to be between
$          and
$          per
share. We have applied to list our common stock on The Nasdaq
Stock Market's National Market under the symbol
"COSI."
The underwriters have an option to purchase a
maximum
of            additional
shares to cover over-allotments of shares.
Investing in our common stock involves risks.
See "Risk Factors" on page 7.
Underwriting
Price to
Discounts and
Proceeds to
Public
Commissions
Cosí
Per Share
$
$
$
Total
$
$
$
Delivery of the shares of common stock will be
made on or
about                     ,           .
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved
of these securities or determined if this prospectus is truthful
or complete. Any representation to the contrary is a criminal
offense.
Credit Suisse First Boston
Banc of America Securities LLC
U.S. Bancorp Piper Jaffray
William Blair & Company
The date of this prospectus
is                     ,
2002
Table of Contents
Dealer Prospectus Delivery
Obligation:
Until                     ,
all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required
to deliver a prospectus. This is in addition to the
dealer's obligation to deliver a prospectus when acting as
an underwriter and with respect to unsold allotments or
subscriptions.
Table of Contents
Table of Contents
Table of Contents
Table of Contents
TABLE OF CONTENTS
PROSPECTUS SUMMARY
THE OFFERING
SUMMARY FINANCIAL DATA
RISK FACTORS
FORWARD-LOOKING STATEMENTS
USE OF PROCEEDS
DIVIDEND POLICY
CAPITALIZATION
DILUTION
SELECTED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS
MANAGEMENT
PRINCIPAL SHAREHOLDERS
RELATED PARTY TRANSACTIONS
DESCRIPTION OF CAPITAL STOCK
CERTAIN U.S. FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS
SHARES ELIGIBLE FOR FUTURE SALE
UNDERWRITING
NOTICE TO CANADIAN RESIDENTS
PRICING OF THIS OFFERING
LEGAL MATTERS
EXPERTS
WHERE YOU CAN FIND MORE INFORMATION
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT AUDITORS
COSI, INC. CONSOLIDATED BALANCE SHEETS
COSI, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 3, 2000, January 1, 2001 and December 31, 2001
SIGNATURES
MERGER AGREEMENT
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
AMENDED AND RESTATED BY-LAWS OF COSI INC.
FORM OF RIGHTS AGREEMENT
AMENDED AND RESTATED REGISTRATION AGREEMENT
AMENDED AND RESTATED STOCK INCENTIVE PLAN
EMPLOYEE STOCK PURCHASE PLAN
NON EMPLOYEE DIRECTOR STOCK PURCHASE PLAN
DEFERRED STOCK PLAN
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
SUBSIDIARIES OF COSI INC.
CONSENT OF ARTHUR ANDERSEN LLP
CONSENT OF ERNST AND YOUNG LLP
LETTER OF REGISTRANT
Table of Contents
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY
1
COSÍ, INC.
1
THE OFFERING
4
SUMMARY FINANCIAL DATA
5
RISK FACTORS
7
FORWARD-LOOKING STATEMENTS
14
USE OF PROCEEDS
15
DIVIDEND POLICY
15
CAPITALIZATION
16
DILUTION
17
SELECTED FINANCIAL DATA
18
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
	FINANCIAL CONDITION AND RESULTS OF OPERATIONS
21
BUSINESS
31
MANAGEMENT
43
PRINCIPAL SHAREHOLDERS
52
RELATED PARTY TRANSACTIONS
54
DESCRIPTION OF CAPITAL STOCK
55
CERTAIN U.S. FEDERAL INCOME AND ESTATE TAX
	CONSIDERATIONS
61
SHARES ELIGIBLE FOR FUTURE SALE
63
UNDERWRITING
64
NOTICE TO CANADIAN RESIDENTS
67
PRICING OF THIS OFFERING
68
LEGAL MATTERS
68
EXPERTS
68
WHERE YOU CAN FIND MORE INFORMATION
68
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
F-1
You should rely only on the information
contained in this document. We have not authorized anyone to
provide you with information that is different. This document
may only be used where it is legal to sell these securities. The
information in this document may only be accurate as of the date
of this document.
Table of Contents
PROSPECTUS SUMMARY
This summary contains basic information about
us and this offering. Because it is a summary, it does not
contain all the information that you should consider before
investing. You should read the entire prospectus carefully,
including the section entitled "Risk Factors" and our
consolidated financial statements and the accompanying notes
included elsewhere in this prospectus.
Except as otherwise indicated or required by
the context, references to "we," "our,"
"us," "Cosí" or "the company"
refer to Cosí, Inc. and its subsidiaries and predecessors.
"Cosí" (printed in italics) refers solely to the
Cosí restaurant operating format, and not the Cosí
Downtown restaurant operating format.
Our fiscal year ends on the Monday closest to
December 31. Fiscal years 1999, 2000 and 2001 ended on
January 3, 2000, January 1, 2001 and December 31,
2001, respectively. Fiscal year 1999 contained 53 weeks and
fiscal years 2000 and 2001 each contained
52 weeks.
Except as otherwise indicated or required by
the context, all information in this prospectus assumes
(i) no exercise of outstanding options to purchase
6,058,042 shares of common stock issued under the Cosí,
Inc. Stock Incentive Plan, Cosí Sandwich Bar, Inc.
Incentive Stock Option Plan and our Non-Employee Director Stock
Option Plan, of which 2,932,891 were exercisable as of
April 1, 2002 at a weighted average exercise price of
$5.18; (ii) no exercise of the underwriters'
over-allotment option to purchase up to  additional shares
of our common stock; (iii) exercise of all outstanding
warrants to purchase a total of 304,591 shares of our common
stock, 256,057 of which have an exercise price of $.01 per
share, 44,115 of which have an exercise price of $8.50 per
share, and 4,419 of which have an exercise price of $9.50 per
share; and (iv) the conversion of all outstanding shares of
our Series A and Series C preferred stock into
11,318,567 shares of our common stock. All outstanding warrants
and shares of our preferred stock will be exercised or converted
immediately upon consummation of this offering.
As you read this prospectus, you should also
note the following: this prospectus contains various references
to industry market data and certain industry forecasts. The
industry market data and industry forecasts were obtained from
publicly available information and industry publications.
Industry publications generally state that the information
contained therein has been obtained from sources believed to be
reliable, but that the accuracy and completeness of that
information is not guaranteed. Similarly, industry forecasts,
while we believe them to be accurate, have not been
independently verified by us and we do not make any
representation as to the accuracy of that information.
COSÍ, INC.
We own and operate 66 fast casual restaurants in
11 states and the District of Columbia.
Cosí
restaurants are all-day cafés that feature signature
bread and coffee products in an environment we adjust
appropriately throughout the day.
Cosí
restaurants
offer breakfast, lunch, afternoon coffee, dinner, and dessert
menus full of creative, cravable foods and beverages. From
Cosí
Squagels®
(square bagels made from
Cosí bread) to our award-winning sandwiches and pizzas,
Cosí has developed featured foods that are built around our
secret, generations-old recipe for crackly crust flatbread.
These products are freshly baked in front of our customers
throughout the day in open flame stone hearth ovens prominently
located in each of our restaurants. Our coffees are freshly
brewed and expertly prepared by our baristas and bartenders. Our
coffee beverages range from simple Cosí brews and
traditional lattes to our innovative Double Oh Arctic Mochas and
specialty coffee cocktails, featuring the
Mocha
Kiss
®. We offer friendly and attentive service in a
warm and inclusive atmosphere. Our vision is to become
America's favorite café by giving every customer
something to look forward to in their day.
We operate our restaurants in two formats:
Cosí
and
Cosí Downtown.
All of our
restaurants offer breakfast, lunch and afternoon coffee in a
counter service format. After 5 p.m., our
Cosí
restaurants add table service and offer dinner and dessert
in a casual dining format. All of our restaurants are designed
to be welcoming and comfortable, featuring oversized sofas,
chairs and tables, and faux painted walls. The atmosphere of
Cosí is appropriately managed for each daypart by changing
the music, both style and volume,
1
Table of Contents
and lighting throughout the day. Our restaurants
are located in a wide range of markets and trade areas,
including business districts and residential communities in both
urban and suburban locations.
Cosí was created through the
October 1999 merger of two restaurant concepts, Cosí
Sandwich Bar, Inc. and Xando, Incorporated. Each company served
a similar customer, but focused on different parts of the day.
Over the last two years during the development of our concept,
we added Cosí Sandwich Bar products to the Xando Coffee and
Bar five daypart platform. We believe we have created a
restaurant concept that satisfies our customers' needs from
Wake Up Call to Last Call®
. In 2001, Restaurant
Hospitality Magazine selected Cosí as one of America's
Premier Concepts of Tomorrow.
Concept and Business Strategy
Our objective is to build a nationwide system of
distinctive restaurants that generate attractive unit economics
by appealing to a broad range of customers across five dayparts:
breakfast, lunch, afternoon coffee, dinner and dessert. Inherent
in this objective is our ability to leverage our core
competencies in both bread and coffee by offering creative,
cravable products during each daypart, reinforcing the Cosí
brand and creating a loyal customer base. To achieve this
objective, we intend to utilize the following strategies:
Build Awareness of the Cosí
Brand.
We believe that the Cosí
name has achieved substantial brand equity among our customers
and has become well known within our markets for our signature
bread and coffee products, most notably, our award winning
crackly crust flatbread, the foundation of every Cosí
sandwich.
Provide a Menu Offering Full of Creative,
Cravable Foods and Beverages.
We offer
proprietary bread and coffee products for all five dayparts. All
of our signature bread products are made from scratch on
premises in front of the customer and baked fresh in our open
flame stone hearth oven all day. We believe that our extensive
café menu of cravable proprietary products distinguishes us
from our competition.
Capitalize on Proven Multiple Daypart Model.
By operating in multiple dayparts, we
are able to maximize revenues and leverage both development and
operating costs. Cosí selects sites that experience strong
traffic in at least three of five dayparts. Additionally, as we
continue to enhance our product offering in each daypart, our
new restaurant average unit volumes have significantly increased.
Operate in Multiple Real Estate Paradigms.
Our restaurants are located in a wide
range of markets and trade areas, which include business
districts and residential communities in both urban and suburban
locations. We believe that this demonstrates the flexibility of
our restaurant designs and the appeal of our concept to a wide
variety of consumers.
Provide a High Level of Customer Service.
Cosí recognizes that a key to a
positive customer experience is the customer's interaction
with our employees, or partners. We dedicate significant time
and resources to our partners' experience through our
"Life of the Partner" program to focus on every aspect
of a partner's development with us, from sourcing,
selection and hiring to orientation, training, continuing
education, performance evaluation and promotion.
Leverage our
Infrastructure.
Cosí has a deep
management infrastructure led by seasoned professionals from
both the retail and the restaurant industries. We believe that
this management team, combined with our founder driven culture,
provides Cosí with the right chemistry and experience to
execute our growth plans. In addition, we have made a
substantial investment in an application service provider model,
for the management of our information systems, which allows us
to maintain advanced technology without the need to continually
re-invest in infrastructure and personnel.
Growth
We believe that there are significant
opportunities to expand our concept and brand on a nationwide
basis. In addition to new restaurant growth, we believe that we
will increase average unit volumes through the launch of new
menu segments, product innovations and catering sales.
2
Table of Contents
New Unit Growth.
The
addition of new restaurants has been our primary source of
growth historically and we anticipate that it will be the
primary source of growth in the near term. We believe that we
have adopted a manageable growth strategy and intend to develop
many of our new restaurants in our existing markets, and
selectively enter new markets, to gain operational efficiencies,
enhance convenience for our customers and increase brand
awareness. Cosí does not utilize a commissary system and
thus our expansion is not restricted by geographic proximity to
commissary kitchens. Our site selection criteria is flexible and
allows us to adapt to a wide variety of real estate paradigms
including central business districts, urban and suburban
residential locations and suburban shopping centers. We plan to
open approximately 30 to 35 new restaurants during fiscal
2002, and approximately 53 to 59 new restaurants in fiscal
2003. We expect the majority of our restaurants to be opened in
the future will be in the
Cosí
all-day format.
Increased Average Unit Volumes.
We plan to increase sales at our
restaurants by expanding our food and beverage selections,
leveraging each of the five dayparts: breakfast, lunch,
afternoon coffee, dinner and dessert. We maintain a pipeline of
new menu segments and product launches which are systematically
introduced in order to keep our product offerings relevant to
consumers in each daypart, drive customer frequency and increase
our average check. Additionally, Cosí catering provides us
with an additional channel for growth outside of the four walls
of the restaurant. With the implementation of this strategy, our
new restaurant average unit volumes have significantly
increased. During 2001, despite the negative impact of
September 11th across all of our restaurants, average sales
for restaurants opened from 1994 to 1999 were approximately
$1,040,000 and average sales for restaurants opened in 2000 were
approximately $1,400,000.
Our principal executive offices are located at
242 West 36th Street, New York, New York 10018 and our
telephone number is (212) 653-1600. Our web site address is
http://www.getcosi.com. Information on our web site is not a
part of this prospectus.
3
Table of Contents
THE OFFERING
Common stock offered:
By Cosí, Inc.
shares
Common stock to be outstanding after the offering
shares
Use of proceeds
We will receive approximately
	$      million in net proceeds in
	this offering. We intend to use the proceeds for:
• the development of new restaurants;
• prepayment of our outstanding 13%
	senior subordinated notes; and
• general corporate purposes, including
	working capital needs.
See "Use of Proceeds" for more
	information regarding our planned use of the net proceeds from
	this offering.
Dividend policy
We do not anticipate paying any cash dividends in
	the foreseeable future.
Proposed Nasdaq National Market symbol
COSI
The number of outstanding shares shown above is
based on shares outstanding as of April 1, 2002 and
excludes 6,058,042 shares of common stock issuable upon exercise
of stock options outstanding under the Cosí, Inc. Stock
Incentive Plan, Cosí Sandwich Bar, Inc. Incentive Stock
Option Plan and our Non-Employee Director Stock Option Plan as
of April 1, 2002, of which 2,932,891 were exercisable.
We own or have rights to various trademarks and
trade names used in our business. These include
Cosí®
,
Cosí
Downtown
TM
, Squagels®, Mocha Kiss®,
Wake Up Call to Last Call®, Cosí
Corners
TM
, Warm n' Cosí
Melts
TM
, Screamers
®
,
Cosí-dillas
TM
, and our sun and moon
logo®. This prospectus also includes trademarks, service
marks and trade names owned by other companies.
4
Table of Contents
SUMMARY FINANCIAL DATA
The following table shows our summary historical
financial data as, at and for the periods indicated. You should
read this Summary Financial Data together with "
Use of
Proceeds
", "
Management's Discussion and
Analysis of Financial Condition and Results of
Operations
", our consolidated financial statements and
accompanying notes and the other financial data included
elsewhere in this prospectus
.
Three Months Ended
Fiscal Year
April 2,
April 1,
1999
2000
2001
2001
2002
(Audited)
(Unaudited)
(in thousands, except per share data)
Statement of Operations Data:
Net sales
$
37,262.2
$
51,222.8
$
70,184.1
$
15,855.9
$
18,052.1
Costs and expenses:
Cost of goods sold
10,838.5
13,844.0
18,791.7
4,205.6
4,853.4
Restaurant operating expenses
22,236.2
32,172.9
45,114.5
9,976.1
11,127.0
Total costs of sales
33,074.7
46,016.9
63,906.2
14,181.7
15,980.4
Restaurant operating margin (a)
4,187.5
5,205.9
6,277.9
1,674.2
2,071.7
General and administrative expenses
14,024.3
14,774.2
18,361.5
3,735.2
4,620.3
Depreciation and amortization
3,155.2
6,158.1
6,690.0
2,021.9
1,210.3
Restaurant pre-opening expenses
661.4
1,409.5
1,438.8
253.6
111.4
Provision for losses on asset impairments and
	disposals
4,208.7
5,847.5
8,486.3
90.4
—
Merger costs and related expenses
8,958.7
—
—
—
—
Lease termination costs
3,437.1
477.3
6,410.7
578.3
—
Stock compensation
4,512.6
—
—
—
Operating income (loss)
(34,770.5
)
(23,460.7
)
(35,109.4
)
(5,005.2
)
(3,870.3
)
Interest income
478.6
441.4
340.5
60.8
29.9
Interest expense
(206.1
)
(210.7
)
(654.4
)
(98.4
)
(387.8
)
Total interest income (expense), net
272.5
230.7
(313.9
)
(37.6
)
(357.9
)
Net income (loss)
(34,498.0
)
(23,230.0
)
(35,423.3
)
(5,042.8
)
(4,228.2
)
Preferred stock dividends
(2,561.3
)
(4,219.7
)
(6,678.1
)
(1,312.7
)
(1,960.5
)
Net income (loss) attributable to common
	stockholders
$
(37,059.3
)
$
(27,449.7
)
$
(42,101.4
)
$
(6,355.5
)
$
(6,188.7
)
Net income (loss) per common share:
Basic and diluted
$
(5.02
)
$
(3.48
)
$
(5.34
)
$
(0.81
)
$
(0.78
)
Shares used in computing net income (loss) per
	common share (in thousands)
Basic and diluted
7,376
7,882
7,888
7,882
7,923
Pro Forma Data
(b)
:
Net income (loss) attributable to common
	stockholders
$
(35,423.3
)
$
(4,228.2
)
Net income (loss) per common share:
Basic and diluted
$
(2.12
)
$
(0.23
)
Shares used in computing net income per common
	share (in thousands)
Basic and diluted
16,676
18,558
5
Table of Contents
Three Months Ended
Fiscal Year
April 2,
April 1,
1999
2000
2001
2001
2002
(Audited)
(Unaudited)
(in thousands, except per share data)
Selected Statement of Cash Flow
	Data:
Cash flow from operating activities
$
(8,539.7
)
$
(8,539.1
)
$
(12,299.5
)
$
(4,925.2
)
$
(5,349.5
)
Cash flow from investing activities
(14,742.3
)
(18,347.7
)
(20,350.6
)
(5,418.9
)
(2,725.5
)
Cash flow from financing activities
23,773.2
24,964.0
32,056.8
14,811.6
16,173.4
Selected Operating Data:
Restaurants open at end of period
36
52
67
55
66
As of April 1, 2002
Actual
As Adjusted
(Unaudited)
(Unaudited)
(in thousands)
Selected Balance Sheet Data:
Cash and cash equivalents
$12,568.0
Total assets
44,987.4
Total debt and capital lease obligations
8,087.2
Mandatorily redeemable preferred stock
113,532.7
Total common stockholders' equity (deficit)
(95,185.5)
(a)
Restaurant operating margin represents sales less
	cost of goods sold and restaurant operating expenses.
(b)
Reflects the conversion of all outstanding
	Series A and Series C preferred stock and exercise of
	all outstanding warrants upon consummation of this offering.
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RISK FACTORS
You should carefully consider the following
risks, as well as the other information contained in this
prospectus, before investing in shares of our common stock. If
any of the following risks actually occur, our business could be
harmed. In that case, the trading price of our common stock
could decline, and you might lose all or part of your
investment. You should refer to the information set forth in
this prospectus and our financial statements and the related
notes included elsewhere in this prospectus.
Risks Particular to Cosí
If we are unable to achieve our rapid
	growth strategy our business could be materially adversely
	affected.
We are planning a rapid growth strategy which
will depend on our ability to open new restaurants on a timely
and profitable basis. We have experienced delays in restaurant
openings from time to time, we may experience delays in the
future and we cannot assure you that we will be able to achieve
our expansion goals. Any inability to implement our growth
strategy could materially adversely affect our business,
financial condition, operating results or cash flows. Our
ability to expand successfully will depend on a number of
factors, some of which are beyond our control, including:
•
identification and availability of suitable
	restaurant sites;
•
competition for restaurant sites;
•
negotiation of favorable leases;
•
management of construction and development costs
	of new restaurants;
•
securing required governmental approvals and
	permits;
•
recruitment of qualified operating personnel;
•
competition in new markets; and
•
general economic conditions.
In addition, we contemplate entering new markets
in which we have no operating experience. These new markets may
have different demographic characteristics, competitive
conditions, consumer tastes and discretionary spending patterns
than our existing markets, which may cause our new restaurants
to be less successful in these new markets than in our existing
markets.
Any inability to manage our growth
	effectively could materially adversely affect our operating
	results.
Failure to manage our growth effectively could
harm our business. We have grown significantly since our
inception and intend to grow substantially in the future. We
have increased the number of our restaurants from
36 restaurants as of December 31, 1999 to 66
restaurants currently. Our existing restaurant management
systems, financial and management controls and information
systems may not be adequate to support our planned expansion.
Our ability to manage our growth effectively will require us to
continue to enhance these systems, procedures and controls and
to locate, hire, train and retain operating personnel. We cannot
assure you that we will be able to respond on a timely basis to
all of the changing demands that our planned expansion will
impose on management and on our existing infrastructure. If we
are unable to manage our growth effectively, our business and
operating results could be materially adversely impacted.
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You should not rely on past increases in
	our average unit volumes as an indication of our future results
	of operations because they may fluctuate
	significantly.
A number of factors have historically affected,
and will continue to affect, our average sales, including, among
other factors:
•
introduction of new menu items;
•
unusually strong initial sales performance by new
	restaurants;
•
competition;
•
general regional and national economic conditions;
•
consumer trends; and
•
our ability to execute our business strategy
	effectively.
It is not reasonable to expect our average unit
volumes to increase at rates achieved over the past several
years. Changes in our average sales results could cause the
price of our common stock to fluctuate substantially.
We have a limited operating history and we
	may be unable to achieve profitability.
The first Xando Coffee and Bar was opened in
October 1994 and the first Cosí Sandwich Bar was
opened in February 1996. As of April 1, 2002, we are
operating 66 restaurants, 16 of which have been open for less
than one year. Accordingly, you have limited information with
which to evaluate our business and prospects. As a result,
forecasts of our future revenues, expenses and operating results
may not be as accurate as they would be if we had a longer
history of operations and of combined operations. Since we were
formed, we have incurred net losses of approximately
$104 million through the end of fiscal 2001, primarily due
to new restaurant opening expenses, impairment charges, the cost
of our merger in 1999 and the costs of hiring senior management
to develop and implement our expansion strategy. We intend to
continue to expend significant financial and management
resources on the development of additional restaurants. We
cannot predict whether we will be able to achieve or sustain
revenue growth, profitability or positive cash flow in the
future. See
"Management's Discussion and Analysis
of Financial Conditions and Results of Operations"
and
the financial statements included in this prospectus for
information on the history of our losses.
Our restaurants are currently concentrated
	in the Northeastern and Mid-Atlantic regions of the United
	States, particularly in the New York City area. Accordingly, we
	are highly vulnerable to negative occurrences in these
	regions.
We currently operate 55 restaurants in
Northeastern and Mid-Atlantic states, of which 26 are located in
the New York City area, 16 of which are located in New York
Central Business Districts. As a result, we are particularly
susceptible to adverse trends and economic conditions in these
areas. In addition, given our geographic concentration, negative
publicity regarding any of our restaurants could have a material
adverse effect on our business and operations, as could other
regional occurrences impacting the local economies in these
markets.
Our operations depend on governmental
	licenses and we may face liability under "dram shop"
	statutes.
We are subject to extensive federal, state and
local government regulations, including regulations relating to
alcoholic beverage control, the preparation and sale of food,
public health and safety sanitation, building, zoning and fire
codes. Our business depends on obtaining and maintaining
required food service and/or liquor licenses for each of our
restaurants. If we fail to hold all necessary licenses, we may
be forced to delay or cancel new restaurant openings and close
or reduce operations at existing locations. In addition, our
sale of alcoholic beverages subjects us to "dram shop"
statutes in some states. These statutes allow an injured person
to recover damages from an establishment that served alcoholic
beverages to an intoxicated person. Although we take significant
precautions to ensure that all employees are trained in the
responsible service of
8
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alcohol and maintain insurance policies in
accordance with all state regulations regarding the sale of
alcoholic beverages, the misuse of alcoholic beverages by
customers may create considerable risks for us. If we are the
subject of a judgment substantially in excess of our insurance
coverage, or if we fail to maintain our insurance coverage, our
business, financial condition, operating results or cash flows
could be materially and adversely affected. See
"Business — Government Regulation"
for a discussion of the regulations with which we must comply.
Our restaurant expansion strategy focuses
	primarily on further penetrating existing markets. This strategy
	can cause sales in some of our existing restaurants to decline,
	which could result in restaurant closures.
In accordance with our expansion strategy, we
intend to open new restaurants primarily in our existing
markets. Since we typically draw customers from a relatively
small radius around each of our restaurants, the sales
performance and customer counts for restaurants near the area in
which a new restaurant opens may decline due to cannibalization,
which could result in restaurant closures.
Our failure or inability to enforce our
	trademarks or other proprietary rights could adversely affect
	our competitive position or the value of our
	brand.
We own certain common law trademark rights and a
number of federal and international trademark and service mark
registrations, and proprietary rights to certain of our core
menu offerings. We believe that our trademarks and other
proprietary rights are important to our success and our
competitive position. We, therefore, devote appropriate
resources to the protection of our trademarks and proprietary
rights. The protective actions that we take, however, may not be
enough to prevent unauthorized usage or imitation by others,
which might cause us to incur significant litigation costs and
could harm our image or our brand or competitive position.
To date, we have not been notified that our
trademarks or menu offerings infringe the proprietary rights of
third parties, but we cannot assure you that third parties will
not claim infringement by us. Any such claim, whether or not it
has merit, could be time-consuming, result in costly litigation,
cause product delays or require us to enter into royalty or
licensing agreements. As a result, any such claim could have a
material adverse effect on our business, results of operations
and financial condition.
Our quarterly results may fluctuate and
	could fall below expectations of securities analysts and
	investors due to seasonality and other factors, resulting in a
	decline in our stock price.
Our quarterly and yearly results have varied in
the past, and we believe that our quarterly operating results
will vary in the future. Factors such as seasonality, inclement
weather, and unanticipated increases in labor, commodity,
energy, insurance or other operating costs may cause our
quarterly results to fluctuate. For this reason, you should not
rely upon our quarterly operating results as indications of
future performance.
We may need
additional capital in the future and it may not be available on
acceptable terms.
We do not presently have a credit facility
available for general purposes. The development of our business
may require significant additional capital in the future to,
among other things, fund our operations, expand the range of
services we offer and finance future acquisitions and
investments. There is no assurance that financing will be
available on terms favorable to us, or at all. Our ability to
obtain additional financing will be subject to a number of
factors, including market conditions, our operating performance
and investor sentiment. These factors may make the timing,
amount, terms and conditions or additional financings
unattractive to us. If we are unable to raise additional
capital, our growth could be impeded.
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Risks Relating to the Food Service
Industry
Our business
is affected by changes in consumer preferences and discretionary
spending.
Our success depends, in part, upon the popularity
of our food products and our ability to develop new menu items
that appeal to consumers. Shifts in consumer preferences away
from our restaurants or cuisine, our inability to develop new
menu items that appeal to consumers, or changes in our menu that
eliminate items popular with some consumers could harm our
business. Also, our success depends to a significant extent on
discretionary consumer spending, which is influenced by general
economic conditions and the availability of discretionary
income. Accordingly, we may experience declines in sales during
economic downturns or during periods of uncertainty like that
which followed the terrorist attacks on the United States and
the possibility of further terrorist attacks. Any material
decline in the amount of discretionary spending could have a
material adverse effect on our sales, results of operations,
business and financial condition.
Our success
depends on our ability to compete with many food service
businesses.
The restaurant industry is intensely competitive
and we compete with many well-established food service companies
on the basis of taste, quality and price of product offered,
customer service, atmosphere, location and overall guest
experience. We compete with other sandwich retailers, specialty
coffee retailers, bagel shops, fast-food restaurants,
delicatessens, cafés, bars, take-out food service
companies, supermarkets and convenience stores. Our competitors
change with each of the five dayparts (breakfast, lunch,
afternoon coffee, dinner and dessert), ranging from coffee bars
and bakery cafes to casual dining chains. Aggressive pricing by
our competitors or the entrance of new competitors into our
markets could reduce our sales and profit margins.
Many of our competitors or potential competitors
have substantially greater financial and other resources than we
do which may allow them to react to changes in pricing,
marketing and the quick service restaurant industry better than
we can. As our competitors expand their operations, we expect
competition to intensify. We also compete with other employers
in our markets for hourly workers and may be subject to higher
labor costs.
Fluctuations
in coffee prices could adversely affect our operating
results.
The price of coffee, one of our main products,
can be highly volatile. Although most coffee trades on the
commodity markets, coffee of the quality we seek tends to trade
on a negotiated basis at a substantial premium above commodity
coffee pricing, depending on supply and demand at the time of
the purchase. Supplies and prices of green coffee can be
affected by a variety of factors, such as weather, politics and
economics in the producing countries. Two organizations, the
Association of Coffee Producing Countries and the International
Coffee Organization, have sought with mixed success to
coordinate production and pricing of coffee among certain
countries and to maintain pricing quotas among coffee producers.
An increase in pricing of specialty coffees could have a
significant adverse effect on our profitability. To mitigate the
risks of increasing coffee prices and to allow greater
predictability in coffee pricing, we typically enter into fixed
price purchase commitments for a portion of our green coffee
requirements. We cannot assure you that these activities will be
successful or that they will not result in our paying
substantially more for our coffee supply than we would have been
required to pay absent such activities.
Changes in
food and supply costs could adversely affect our results of
operations.
Our profitability depends in part on our ability
to anticipate and react to changes in food and supply costs. We
rely on a single primary distributor of our food and paper
goods. Although we believe that alternative distribution sources
are available, any increase in distribution prices or failure by
our distributor to perform could adversely affect our operating
results. In addition, we are susceptible to increases in food
costs as a result of factors beyond our control, such as weather
conditions and government regulations. Failure to anticipate and
adjust our purchasing practices to these changes could
negatively impact our business.
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The food service industry is affected by
	litigation and publicity concerning food quality, health and
	other issues, which can cause customers to avoid our products
	and result in liabilities.
Food service businesses can be adversely affected
by litigation and complaints from customers or government
authorities resulting from food quality, illness, injury or
other health concerns or operating issues stemming from one
restaurant or a limited number of restaurants. Adverse publicity
about these allegations may negatively affect us, regardless of
whether the allegations are true, by discouraging customers from
buying our products. We could also incur significant liabilities
if a lawsuit or claim results in a decision against us or
litigation costs regardless of the result.
Our business
could be adversely affected by increased labor costs or labor
shortages.
Labor is a primary component in the cost of
operating our business. We devote significant resources to
recruiting and training our managers and hourly employees.
Increased labor costs, due to competition, increased minimum
wage or employee benefits costs or otherwise, would adversely
impact our operating expenses. In addition, our success depends
on our ability to attract, motivate and retain qualified
employees, including restaurant managers and staff, to keep pace
with our growth strategy. If we are unable to do so, our results
of operations may be adversely affected.
Risks Relating to the Offering
Our
common stock has not traded publicly, and the market price of
our common stock may decline after this offering.
Prior to this offering, there has not been a
public market for our common stock. The initial public offering
price of our common stock will be established by negotiations
among us and the underwriters. See "
Pricing of this
Offering
" for a discussion of the factors to be
considered in determining the initial public offering price. We
cannot assure you that an active market will develop or be
sustained after this offering or that the market price of our
common stock will not decline below the initial public offering
price. In addition, the stock market in recent periods has
experienced and continues to experience significant price and
volume fluctuations, which have affected the market price of the
stock of many companies and which have often been unrelated or
disproportionate to the operating performance of these
companies. These fluctuations, as well as a shortfall in sales
or earnings compared to securities analysts' expectations,
changes in analysts' recommendations or projections or
general economic and market conditions, may adversely affect the
market price of our common stock.
You
will experience an immediate and substantial dilution if you
purchase common stock in this offering.
The initial public offering price is
substantially higher than the net tangible book value per share
of the outstanding common stock immediately after this offering.
Any common stock you purchase in this offering will have a
post-offering net tangible book value per share of
$                    less
than the initial public offering price, assuming an initial
public offering price of
$                    per
share, which is the mid-point of the range shown on the cover
page of this prospectus. Future issuances of our common stock,
including issuances in connection with stock option exercises,
could cause further dilution.
Future
sales of our common stock may cause our stock price to
decline.
If our shareholders sell substantial amounts of
our common stock in the public market following this offering,
the market price of our common stock could decline. Immediately
after this offering, there will be a total
of                     shares
of common stock outstanding, of
which                     will
be freely tradable upon completion of this offering subject, in
some instances, to the volume and other limitations of
Rule 144 under the Securities Act of 1933, as amended, or
the Securities Act. In addition, certain of our existing
stockholders are subject to "lock-up" agreements that
prohibit the sale of these shares in the public market for
180 days after the date of this prospectus. When the
180-day period expires or if Credit Suisse First Boston
Corporation consents, in its sole discretion, to an earlier
sale, our existing stockholders will be able to sell
11
Table of Contents
their shares in the public market, subject to
some legal restrictions. As restrictions on resales end, if our
existing stockholders sell a large number of shares, the market
price of our common stock could decline dramatically. Moreover,
the perception in the public market that these stockholders
might sell shares of our common stock could depress the market
price of our common stock.
As soon as practicable after this offering, we
intend to register for resale approximately 11.4 million
shares of our common stock reserved under our stock option
plans. As of April 1, 2002, options to purchase 6,058,042
shares of our common stock were outstanding, 2,932,891 of which
were exercisable.
Certain existing shareholders have rights under
certain circumstances and subject to certain limitations to
require us to register their shares for future sale. See
"Description of Capital Stock", "Shares
Eligible for Future Sale"
and
"Plan of
Distribution".
There
may be risks related to our use of Arthur Andersen LLP as our
outside auditors.
On March 14, 2002, our independent certified
public accountant, Arthur Andersen LLP, was indicted on federal
obstruction of justice charges arising from the
U.S. government's investigation of Enron Corp. Arthur
Andersen has indicated that it intends to vigorously contest the
indictment. As a public company, we will be required to file
with the Securities and Exchange Commission, or SEC, periodic
financial statements audited or reviewed by an independent,
certified public accountant. The SEC has said that it will
continue accepting financial statements audited by Arthur
Andersen, and interim financial statements reviewed by it, so
long as Arthur Andersen is able to make certain representations
to its clients. Arthur Andersen's current difficulties as a
result of involvement with Enron may result in the loss of key
members of our audit team from Arthur Andersen, which could
adversely affect our ability to get required reports completed
in a timely manner. Our access to the capital markets and our
ability to make timely SEC filings could be impaired if the SEC
ceases accepting financial statements audited by Arthur
Andersen, if Arthur Andersen becomes unable to make required
representations to us or if for any reason Arthur Andersen is
unable to perform required audit-related services for us in a
timely manner. In such a case, we would promptly seek to engage
new certified public accountants or take such other actions as
may be necessary to enable us to maintain access to the capital
markets and timely financial reporting and such actions could be
disruptive to our operations and affect the price and liquidity
of our securities. Certain investors, including significant
funds and institutional investors, may choose not to hold or
invest in securities that do not have current financial reports
available. Furthermore, relief which may be available to
shareholders under the federal securities laws against auditing
firms may not be available as a practical matter against Arthur
Andersen should it cease to operate or be financially impaired.
Our
management has broad discretion as to the use of the net
proceeds from this offering.
Our management has broad discretion as to the use
of the net proceeds that we will receive from this offering. We
cannot assure you that our management will apply these funds
effectively, nor can we assure you that the net proceeds from
this offering will be invested in a manner yielding a favorable
return.
Provisions
in our charter documents and Delaware law may delay or prevent
our acquisition by a third party.
Our certificate of incorporation, by-laws and
shareholder rights agreement contain several provisions that may
make it more difficult for a third party to acquire control of
us without the approval of our board of directors. These
provisions may make it more difficult or expensive for a third
party to acquire a majority of our outstanding voting common
stock. These provisions also may delay, prevent or deter a
merger, acquisition, tender offer, proxy contest or other
transaction that might otherwise result in our
shareholders' receiving a premium over the market price for
their common stock. See
"Description of Capital
Stock — Anti-Takeover Provisions of Our Certificate of
Incorporation, By-laws and Shareholder Rights Plan".
12
Table of Contents
Our
existing shareholders will continue to control us after this
offering, and they may make decisions with which you may
disagree.
After this offering, our existing shareholders
will beneficially hold
approximately           %
of our outstanding common stock, or
approximately           %
if the underwriters' over-allotment option is exercised in
full. Our executive officers and directors as a
group — currently 16 persons — will
beneficially hold
approximately           %
of our outstanding common stock after this offering, including
currently exercisable stock options,
or           %
if the over-allotment option is fully exercised. Consequently,
our existing shareholders will continue to control us after this
offering is completed, and our officers and directors will
continue to be significant holders. Through their voting power,
these persons may make decisions regarding Cosí with which
you may disagree. Our existing shareholders may have interests
which conflict with the interests of the other holders of our
common stock.
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Table of Contents
FORWARD-LOOKING STATEMENTS
This prospectus contains statements about future
events and expectations that constitute forward-looking
statements. Forward-looking statements are based on
management's beliefs, assumptions and expectations of our
future economic performance, taking into account the information
currently available to management. These statements are not
statements of historical fact. Forward-looking statements
involve risks and uncertainties that may cause our actual
results, performance or financial condition to differ materially
from the expectations of future results, performance or
financial condition we express or imply in any forward-looking
statements. In addition to the other factors discussed under
"Risk Factors"
elsewhere in this prospectus,
factors that could contribute to these differences include, but
are not limited to:
•
the cost of our principal food products;
•
labor shortages or increased labor costs;
•
changes in consumer preferences and demographic
	trends;
•
increasing competition in the fast casual dining
	segment of the restaurant industry;
•
expansion into new markets;
•
the rate of growth of general and administrative
	expenses associated with building a strengthened corporate
	infrastructure to support our growth initiatives;
•
fluctuations in our quarterly results;
•
increased government regulation;
•
supply and delivery shortages or interruptions;
•
market saturation due to new restaurant openings;
•
inadequate protection of our intellectual
	property;
•
adverse weather conditions which impact customer
	traffic at our restaurants; and
•
adverse economic conditions.
The words "believe," "may,"
"will," "should," "anticipate,"
"estimate," "expect," "intend,"
"objective," "seek," "plan,"
"strive" or similar words, or the negatives of these
words, identify forward-looking statements. We qualify any
forward-looking statements entirely by these cautionary factors.
14
Table of Contents
USE OF PROCEEDS
Cosí is offering for
sale            shares
of common stock by this prospectus. Based on an assumed initial
public offering price of $ per share, the midpoint of the
range shown on the cover page of this prospectus, we estimate
that our net proceeds from the sale of these shares will be
approximately
$           million
after deducting underwriting discounts and estimated offering
expenses. Our estimated net proceeds will be approximately
$           million
if the underwriters exercise their option to purchase an
additional            shares
from us to cover over-allotments.
We intend to use a portion of the net proceeds of
this offering to finance the development of new restaurants and
approximately $6.27 million to prepay our outstanding 13%
senior subordinated notes due 2006, including accrued interest
and a prepayment premium of $0.05 million. The balance of
the net proceeds of this offering will be used for general
corporate purposes, including working capital needs.
Although we do not contemplate any changes in our
use of proceeds, we may reprioritize the uses listed above or
use some proceeds for other purposes in the event the specified
uses require less capital than expected.
Pending application of the net proceeds as
described above, we will invest the net proceeds in
interest-bearing investment grade securities.
DIVIDEND POLICY
We currently intend to retain all future earnings
to finance the expansion of our business. We have not paid cash
dividends in the past and do not anticipate paying cash
dividends in the foreseeable future. Any future determination
regarding cash dividend payments will be made by our board of
directors and will depend upon our earnings, capital
requirements, financial condition, restrictions in financing
agreements and other factors deemed relevant by our board of
directors.
15
Table of Contents
CAPITALIZATION
The following table shows, as of April 1,
2002, on a consolidated basis, our cash and cash equivalents,
short-term debt and capitalization, both actual and as adjusted.
The as adjusted amounts give effect to:
•
the sale
	of                      shares
	of common stock in this offering, assuming an initial public
	offering price of $       per
	share, the mid-point of the range shown on the cover page of
	this prospectus;
•
the conversion of all outstanding Series A
	and Series C preferred stock, which will be converted upon
	consummation of this offering;
•
the exercise of all outstanding warrants to
	purchase shares of our common stock, which warrants will be
	exercised upon consummation of this offering; and
•
the application of a portion of the estimated net
	proceeds from that sale, after deducting underwriters discounts
	and estimated offering expenses, to prepay our 13% senior
	subordinated notes due 2006.
You should read the following capitalization data
in conjunction with "
Use of Proceeds
",
"
Selected Financial Data
",
"
Management's Discussion and Analysis of Financial
Condition and Results of Operations
", the consolidated
financial statements and accompanying notes and the other
financial data included elsewhere in this prospectus.
April 1, 2002
Actual
As Adjusted
(unaudited)
(in thousands, except
share data)
Cash and cash equivalents
$
12,568.0
Short-term debt
1,541.4
Long-term debt
senior subordinated notes due 2006
5,435.5
other long term debt
1,110.3
Mandatorily redeemable preferred stock, $.01 par
	value; 16,673,947 shares authorized; 11,318,567 shares
	issued and outstanding
113,532.7
Mandatorily redeemable preferred stock, $.01 par
	value; 0 shares authorized; 0 shares issued and
	outstanding
Stockholders' equity:
Common stock, $.01 par value;
	30,000,000 shares authorized; 7,951,365 shares issued
	and outstanding
79.5
Common stock, $.01 par value;
	100,000,000 shares
	authorized;            shares
	issued and outstanding
Additional paid-in capital
31,952.7
Stock subscriptions receivable
(2,974.8
)
Accumulated deficit
(124,242.9
)
Total common stockholders' equity (deficit)
(95,185.5
)
Total capitalization
$
26,434.4
The table above excludes 6,058,042 shares of
our common stock issuable upon the exercise of stock options
outstanding under our stock option plans as of April 1,
2002, of which 2,932,891 were exercisable as of April 1,
2002.
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Table of Contents
DILUTION
Our net tangible book value as of April 1,
2002 was $17,088,075, or $0.87 per share of common stock. Net
tangible book value per share is the amount by which total
tangible assets exceeds total liabilities, divided by the total
number of shares of common stock outstanding. Our adjusted net
tangible book value as of April 1, 2002 would have been
$          ,
or $ per share, after giving effect to the sale
of                      shares
of common stock offered by this prospectus at an assumed initial
offering price of
$          per
share, the midpoint of the range shown on the cover page of this
prospectus, and after deducting estimated underwriting discounts
and estimated offering expenses and the prepayment of our 13%
senior subordinated notes due 2006. This represents an immediate
increase in the net tangible book value of
$          per
share to existing shareholders, and an immediate dilution of
$          per
share to new investors. Dilution per share represents the
difference between the price per share to be paid by new
investors and the net tangible book value per share immediately
after this offering. The following table illustrates the per
share dilution:
Pro
Actual
Forma
Assumed initial public offering price
Net tangible book value per share as of
	April 1, 2002
$
0.87
Increase attributable to the sale of shares
	offered hereby
Adjusted net tangible book value after this
	offering
Dilution in the net tangible book value to new
	investors
The following table sets forth, as of
April 1, 2002, the differences between the total
consideration paid and the average price per share paid by
existing investors and by new investors purchasing shares in
this offering:
Shares Purchased
Total Consideration
Average Price
Number
Percent
Amount
Percent
Per Share
Existing Stockholders
19,574,522.57
%
$
124,868,990
%
$
6.38
New Investors
%
%
$
Total
100
%
100
%
The foregoing table does not reflect 6,058,042
shares of common stock issuable upon the exercise of stock
options outstanding under our stock option plans as of
April 1, 2002, of which 2,932,891 were exercisable as of
April 1, 2002 at a weighted average exercise price
of $5.18.
17
Table of Contents
SELECTED FINANCIAL DATA
The following selected consolidated financial
data as of and for the years ended January 1, 2001 and
December 31, 2001 have been derived from, and are qualified
by reference to, our Consolidated Financial Statements audited
by Arthur Andersen LLP, independent accountants, included
elsewhere in this prospectus and should be read in conjunction
with those Consolidated Financial Statements and Notes thereto
and Management's Discussion and Analysis of Financial
Condition and Results of Operations. The following selected
consolidated financial data for the year ended January 3,
2000 have been derived from our Consolidated Financial
Statements audited by Ernst & Young LLP, independent
auditors, included elsewhere in this prospectus and should be
read in conjunction with those Consolidated Financial Statements
and Notes thereto and Management's Discussion and Analysis
of Financial Condition and Results of Operations. The selected
consolidated balance sheet data as of January 3, 2000 have
been derived from our Consolidated Financial Statements audited
by Ernst & Young LLP, independent auditors, not included
herein. The selected consolidated financial data as of and for
the fiscal year ended December 28, 1998 have been derived
from our Consolidated Financial Statements audited by Ernst
& Young LLP, and other auditors, not included herein. The
pro forma selected consolidated financial data as of and for
fiscal 1997 have been derived from the audited financial
statements of Xando, Inc. and Cosí Sandwich Bar, Inc.,
audited by Ernst & Young LLP and other auditors, not
included herein, which give effect to the merger accounted for
as a pooling of interests as of the beginning of fiscal 1997.
The selected financial data presented below as of April 1,
2002 and for the fiscal three months ended April 2, 2001
and April 1, 2002 have been derived from our unaudited
financial statements also appearing herein, which have been
prepared on the same basis as our audited consolidated financial
statements and, in the opinion of management, contain all
adjustments, consisting of only normal recurring adjustments,
necessary for a fair presentation of the results of operations
for such periods. The results of operations for the fiscal three
months ended April 1, 2002 are not necessarily indicative
of results to be expected for any subsequent period.
18
Table of Contents
Selected Consolidated Financial and Operating
Data
Three Months Ended
Fiscal Year
April 2,
April 1,
1997
1998
1999
2000
2001
2001
2002
(Pro
Forma
Unaudited)
(Audited)
(Unaudited)
(in thousands, except per share data)
Statement of Operations Data:
Net sales
$
7,861.4
$
20,686.7
$
37,262.2
$
51,222.8
$
70,184.1
$
15,855.9
$
18,052.1
Costs and expenses:
Cost of goods sold
2,444.6
6,332.9
10,838.5
13,844.0
18,791.7
4,205.6
4,853.4
Restaurant operating expenses
4,096.7
11,386.5
22,236.2
32,172.9
45,114.5
9,976.1
11,127.0
Total cost of sales
6,541.3
17,719.4
33,074.7
46,016.9
63,906.2
14,181.7
15,980.4
Restaurant operating margin (a)
1,320.1
2,967.3
4,187.5
5,205.9
6,277.9
1,674.2
2,071.7
General and administrative expenses
3,043.8
7,728.7
14,024.3
14,774.2
18,361.5
3,735.2
4,620.3
Depreciation and amortization
503.0
1,196.6
3,155.2
6,158.1
6,690.0
2,021.9
1,210.3
Restaurant pre-opening expenses
287.1
720.9
661.4
1,409.5
1,438.8
253.6
111.4
Provision for losses on asset impairments and
        disposals
—
—
4,208.7
5,847.5
8,486.3
90.4
—
Merger costs and related expenses
—
—
8,958.7
—
—
—
—
Lease termination costs
—
—
3,437.1
477.3
6,410.7
578.3
—
Stock compensation
—
—
4,512.6
—
—
—
—
Operating income (loss)
(2,513.8
)
(6,678.9
)
(34,770.5
)
(23,460.7
)
(35,109.4
)
(5,005.2
)
(3,870.3
)
Other income (expense):
Interest income
56.5
406.6
478.6
441.4
340.5
60.8
29.9
Interest expense
(141.6
)
(94.6
)
(206.1
)
(210.7
)
(654.4
)
(98.4
)
(387.8
)
Other expense
(245.5
)
—
—
—
—
—
—
Total other income (expense), net
(330.6
)
312.0
272.5
230.7
(313.9
)
(37.6
)
(357.9
)
Income (loss) before income tax
(2,844.4
)
(6,366.9
)
(34,498.0
)
(23,230.0
)
(35,423.3
)
(5,042.8
)
(4,228.2
)
Income tax benefit (provision)
—
—
—
—
—
—
—
Net income (loss)
(2,844.4
)
(6,366.9
)
(34,498.0
)
(23,230.0
)
(35,423.3
)
(5,042.8
)
(4,228.2
)
Preferred stock dividends
—
(1,064.4
)
(2,561.3
)
(4,219.7
)
(6,678.1
)
(1,312.7
)
(1,960.5
)
Net income (loss) attributable to common
        stockholders
$
(2,844.4
)
$
(7,431.3
)
$
(37,059.3
)
$
(27,449.7
)
$
(42,101.4
)
$
(6,355.5
)
$
(6,188.7
)
Net income (loss) per common share:
Basic and diluted
$
(0.62
)
$
(1.25
)
$
(5.02
)
$
(3.48
)
$
(5.34
)
$
(0.81
)
$
(0.78
)
Shares used in computing net income per common
        share (in thousands)
Basic and diluted
4,568
5,960
7,376
7,882
7,888
7,882
7,923
19
Table of Contents
Three Months Ended
Fiscal Year
April 2,
April 1,
1997
1998
1999
2000
2001
2001
2002
(Pro
Forma
(Audited)
(Unaudited)
Unaudited)
(in thousands, except per share data)
Pro Forma
	Data
(b)
:
Net income (loss) attributable to common
	stockholders
—
—
—
—
(35,423.3
)
—
(4,228.2
)
Net income (loss) per common share:
Basic and diluted
—
—
—
—
(2.12
)
—
(0.23
)
Shares used in computing net income per common
	share (in thousands)
Basic and diluted
—
—
—
—
16,676
—
18,558
Selected Balance Sheet Data:
Cash and cash equivalents
2,835.5
6,494.6
6,985.7
5,062.9
4,469.6
9,530.4
12,568.0
Total assets
10,277.9
24,982.8
25,856.6
32,065.8
35,388.4
40,307.1
44,987.4
Total debt and capital lease obligations
1,351.3
989.4
1,645.6
4,435.8
11,180.0
4,169.6
8,087.2
Mandatorily redeemable preferred stock
—
16,680.5
35,020.5
61,695.3
92,289.3
78,080.7
113,532.7
Total common stockholders' equity (deficit)
7,452.4
3,378.7
(20,825.7
)
(48,275.3
)
(88,979.9
)
(54,625.7
)
(95,185.5
)
Selected Statement of Cash Flow
	Data:
Cash flow from operating activities
(1,236.6
)
(3,146.9
)
(8,539.7
)
(8,539.1
)
(12,299.5
)
(4,925.2
)
(5,349.5
)
Cash flow from investing activities
(4,225.2
)
(11,704.6
)
(14,742.3
)
(18,347.7
)
(20,350.6
)
(5,418.9
)
(2,725.5
)
Cash flow from financing activities
7,046.7
18,510.6
23,773.2
24,964.0
32,056.8
14,811.6
16,173.4
Selected Operating Data:
Restaurants open at end of period
Total
11
25
36
52
67
55
66
(a)
Restaurant operating margin represents sales less
	cost of goods sold and restaurant operating expenses.
(b)
Reflects the conversion of all outstanding
	Series A and Series C preferred stock and the exercise
	of all outstanding warrants upon consummation of this offering.
20
Table of Contents
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion of our financial
condition and results of operations should be read in
conjunction with our financial statements and their notes
appearing elsewhere in this prospectus.
Overview
We own and operate 66 fast casual restaurants in
11 states and the District of Columbia.
Cosí
restaurants are all-day cafés that feature signature
bread and coffee products in an environment that changes
throughout the day.
Cosí
restaurants offer
breakfast, lunch, afternoon coffee, dinner, and dessert menus
full of creative, cravable foods and beverages. From Cosí
Squagels®
(square bagels made from Cosí bread)
to our award-winning sandwiches and pizzas, Cosí has
developed featured foods that are built around our secret,
generations-old recipe for crackly crust flatbread. These
products are freshly baked in front of our customers throughout
the day in open flame stone hearth ovens prominently located in
each of our restaurants. Our coffees are freshly brewed and
expertly prepared by our baristas and bartenders. Our coffee
beverages range from simple Cosí brews and traditional
lattes to our innovative Double Oh Arctic Mochas and specialty
coffee cocktails, featuring the
Mocha Kiss
®. We
offer friendly and attentive service in a warm and inclusive
atmosphere. Our vision is to become America's favorite
café by giving every customer something to look forward to
in their day.
We operate our restaurants in two formats:
Cosí
and
Cosí Downtown
. All of our
restaurants offer our signature bread and coffee products for
breakfast, lunch and afternoon coffee in a counter service
format. After 5 p.m., our
Cosí
restaurants add table
service and offer dinner and dessert in a casual dining format.
Cosí Downtown
restaurants, which are located in
non-residential central business districts, close for the day in
the early evening. By operating in multiple dayparts, we believe
we are able to maximize revenues and leverage both development
and operating costs.
Through our development of the
Cosí
and
Cosí Downtown
formats in both existing and
new markets, we believe we have the platform to expand in
multiple real estate paradigms in order to maximize financial
performance. Our restaurants are located in a wide range of
markets and trade areas, including business districts and
residential communities in both urban and suburban locations. We
believe that we have created significant brand equity in our
markets and that we have demonstrated the appeal of our concept
to a wide variety of customers. We opened 17 new
restaurants in fiscal 2001, including seven restaurants in
the fourth quarter, and expect to open approximately 30 to
35 restaurants in fiscal 2002 and approximately 53 to
59 restaurants in fiscal 2003 by expanding our presence in
existing markets and selectively entering new markets. We closed
two restaurants in fiscal 1999, one restaurant and our
mini-training restaurant associated with the Xando Coffee and
Bar former headquarters in fiscal 2000 and closed one restaurant
in addition to our World Trade Center restaurant, our World
Trade Center kiosk and our World Financial Center restaurant
which were closed due to the events of September 11th in
fiscal 2001. We have closed one restaurant in the first quarter
of fiscal 2002, which was not suited for remodeling to our
current prototype.
Cosí was created by the merger in
October 1999 of two restaurant concepts, Cosí Sandwich
Bar and Xando Coffee and Bar. The merger was accounted for as a
pooling of interests. Each of the predecessor companies served a
similar customer, but focused on serving customer needs at
different parts of the day. By adding Cosí Sandwich Bar
products to the Xando Coffee and Bar five daypart platform, we
believe we have created a restaurant concept that satisfies our
customers' needs throughout the day. The Xando Coffee and
Bar and Cosí Sandwich Bar locations that were opened prior
to the 1999 merger are being remodeled to either the
Cosí
or
Cosí Downtown
formats.
During fiscal 2000 and 2001 we dedicated
significant resources to the development of the
Cosí
and
Cosí Downtown
prototypes and the related
restaurant operating and support systems. These prototypes are
expected to be the basis for all future
Cosí
and
Cosí Downtown
locations. As part of the concept
development process, we closed or remodeled a number of
restaurants in order to facilitate the transition to our new
prototype. In fiscal 2000, as part of this process, we
discontinued the use of a commissary to supply products to our
21
Table of Contents
restaurants. By eliminating commissaries our
expansion will not be restricted by geographic proximity to
commissary kitchens.
We believe that the flexibility of our multiple
daypart model, the appeal of our high quality, innovative
product offering, and our ability to operate in a wide variety
of real estate markets have created an attractive restaurant
model, providing us with considerable growth opportunities to
develop our brand nationwide.
Our financial performance in fiscal 2001 was
adversely affected by the results of the 16 restaurants
that we operated in New York Central Business District
locations. These restaurants have high, market specific, fixed
expenses and were disproportionately impacted by the economic
recession in 2001 and the events of September 11th.
Critical Accounting Policies
Our consolidated financial statements and the
notes to our consolidated financial statements contain
information that is pertinent to management's discussion
and analysis. The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and
liabilities. We believe the following critical accounting
policies involve additional management judgment due to the
sensitivity of the methods, assumptions, and estimates necessary
in determining the related asset and liability amounts.
Statement of Financial Accounting Standards, or
SFAS, No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed
Of," requires management judgments regarding the future
operating and disposition plans for marginally performing
assets, and estimates of expected realizable values for assets
to be sold. The application of SFAS 121 has affected the
amount and timing of charges to operating results that have been
significant in recent years. We evaluate possible impairment at
the individual restaurant level, and record an impairment loss
whenever we determine impairment factors are present.
We have estimated our likely liability under
contractual leases for restaurants that have been, or will be
closed. Such estimates have affected the amount and timing of
charges to operating results that have been significant in
recent years, and are impacted by management's judgments
about the time it may take to find a suitable subtenant or
assignee, or the terms under which a termination of the lease
agreement may be negotiated with the landlord.
We have recorded a full valuation allowance to
reduce our deferred tax assets related to net operating loss
carry forwards. A positive adjustment to income will be required
in future years if we determine that we could realize these
deferred tax assets.
Net Sales
Our sales are composed almost entirely of food
and beverage sales.
Comparable Restaurant Sales
In calculating comparable restaurant sales, we
include a restaurant in the comparable restaurant base after it
has been in operation for 15 full months. At fiscal year
end 2000, there were 34 restaurants in the comparable
restaurant base. At fiscal year end 2001, there were
40 restaurants in the comparable restaurant base.
Costs and Expenses
Cost of goods sold.
Cost of goods sold is composed of food
and beverage costs. Food and beverage costs are variable, and
increase with sales volume.
Restaurant operating expenses.
Restaurant operating expenses include
direct hourly and management wages, bonuses, taxes and benefits
for restaurant employees, and other direct restaurant level
operating expenses including the cost of supplies, restaurant
repairs and maintenance, utilities, rents and related occupancy
costs.
22
Table of Contents
General and administrative expenses.
General and administrative expenses
include all corporate and administrative functions that support
our restaurants and provide an infrastructure to facilitate our
future growth. Components of these expenses include executive
management; supervisory and staff salaries, bonuses and related
taxes and employee benefits; travel; information systems;
training; support center rent and related occupancy costs and
professional and consulting fees. The salaries, bonus and
employee benefits costs included as general and administrative
expenses are generally more fixed in nature and do not vary
directly with the number of restaurants we operate.
Depreciation and amortization.
Depreciation and amortization
principally includes depreciation on restaurant assets.
Restaurant pre-opening expenses.
Restaurant pre-opening expenses, which
are expensed as incurred, include the costs of recruiting,
hiring and training the initial restaurant work force, travel,
the cost of food and labor used during the period before
opening, the cost of initial quantities of supplies, and other
direct costs related to the opening of or remodeling of a
restaurant.
Our fiscal year ends on the Monday falling
nearest to December 31st. Fiscal year 1999 included
53 weeks, while fiscal years 2000 and 2001 each included
52 weeks.
Results of Operations
Our operating results for fiscal years 1999, 2000
and 2001 and for the three months ended April 2, 2001 and
April 1, 2002 expressed as a percentage of sales were as
follows:
Three Months Ended
Fiscal Year
April 2,
April 1,
1999
2000
2001
2001
2002
(Audited)
(Unaudited)
Net sales
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Costs and Expenses:
Cost of goods sold
29.1
%
27.0
%
26.8
%
26.5
%
26.9
%
Restaurant operating expenses
59.7
%
62.8
%
64.3
%
62.9
%
61.6
%
Total costs of sales
88.8
%
89.8
%
91.1
%
89.4
%
88.5
%
Restaurant operating margin
11.2
%
10.2
%
8.9
%
10.6
%
11.5
%
General and administrative expenses
37.6
%
28.8
%
26.2
%
23.6
%
25.6
%
Depreciation and amortization
8.5
%
12.0
%
9.5
%
12.8
%
6.7
%
Restaurant pre-opening expenses
1.8
%
2.8
%
2.1
%
1.6
%
0.6
%
Provision for losses on asset impairments and
	disposals
11.3
%
11.4
%
12.1
%
0.6
%
0.0
%
Merger costs and related expenses
24.0
%
0.0
%
0.0
%
0.0
%
0.0
%
Lease termination costs
9.2
%
0.9
%
9.1
%
3.6
%
0.0
%
Stock compensation
12.1
%
0.0
%
0.0
%
0.0
%
0.0
%
Operating income (loss)
(93.3
)%
(45.8
)%
(50.0
)%
(31.6
)%
(21.4
)%
Other income (expense):
Interest income
1.3
%
0.9
%
0.5
%
0.4
%
0.2
%
Interest expense
(0.6
)%
(0.4
)%
(0.9
)%
(0.6
)%
(2.1
)%
Other income
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
Other expense
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
Total other income (expense), net
0.7
%
0.5
%
(0.4
)%
(0.2
)%
(2.0
)%
Income (loss) before income tax
(92.6
)%
(45.4
)%
(50.5
)%
(31.8
)%
(23.4
)%
Income tax benefit (provision)
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
Net income (loss)
(92.6
)%
(45.4
)%
(50.5
)%
(31.8
)%
(23.4
)%
23
Table of Contents
The following tables set forth unaudited
quarterly information for each of the nine fiscal quarters in
the period ended April 1, 2002. This quarterly information
has been prepared on a basis consistent with our audited
financial statements and, in the opinion of management, includes
all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the
information for the periods presented. Our quarterly operating
results may fluctuate significantly as a result of a variety of
factors, and operating results for any quarter are not
necessarily indicative of results for a full fiscal year. See
"Risk Factors"
.
2000
2001
2002
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
(In thousands, except per share data)
Net sales
$
10,747.2
$
12,554.1
$
13,610.6
$
14,310.9
$
15,855.9
$
18,463.8
$
18,217.0
$
17,647.4
$
18,052.1
Cost of goods sold
2,956.4
3,400.4
3,653.2
3,834.0
4,205.6
4,871.7
4,817.3
4,897.1
4,853.4
Restaurant operating expenses
6,541.9
7,772.6
8,414.3
9,444.1
9,976.1
11,586.2
11,984.7
11,567.5
11,127.0
Total costs of sales
9,498.3
11,173.0
12,067.5
13,278.1
14,181.7
16,457.9
16,802.0
16,464.6
15,980.4
Restaurant operating margin
1,248.9
1,381.1
1,543.1
1,032.8
1,674.2
2,005.9
1,415.0
1,182.8
2,071.7
General and administrative expenses
3,125.9
2,905.9
3,273.5
5,468.9
3,735.2
4,534.5
4,528.4
5,563.4
4,620.3
Depreciation and amortization
1,357.2
1,426.7
1,565.9
1,808.3
2,021.9
2,126.9
1,243.0
1,298.2
1,210.3
Restaurant pre-opening expenses
136.8
189.1
411.1
672.5
253.6
320.0
407.9
457.3
111.4
Provision for losses on asset impairments and
	disposals
—
—
—
5,847.5
90.4
—
1,561.9
6,834.0
—
Lease termination costs
—
—
—
477.3
578.3
—
1,647.1
4,185.3
—
Operating income (loss)
(3,371.0
)
(3,140.6
)
(3,707.4
)
(13,241.7
)
(5,005.2
)
(4,975.5
)
(7,973.3
)
(17,155.4
)
(3,870.3
)
Interest income
77.3
144.0
110.1
110.0
60.8
105.9
146.9
26.9
29.9
Interest expense
(47.8
)
(47.3
)
(45.2
)
(70.4
)
(98.4
)
(115.0
)
(106.9
)
(334.1
)
(387.8
)
Net income (loss)
(3,341.5
)
(3,043.9
)
(3,642.5
)
(13,202.1
)
(5,042.8
)
(4,984.6
)
(7,933.3
)
(17,462.6
)
(4,228.2
)
Preferred stock dividends
(783.8
)
(1,003.2
)
(1,144.5
)
(1,288.2
)
(1,312.7
)
(1,639.4
)
(1,836.0
)
(1,890.0
)
(1,960.5
)
Net income (loss) attributable to common
	stockholders
(4,125.3
)
(4,047.1
)
(4,787.0
)
(14,490.3
)
(6,355.5
)
(6,624.0
)
(9,769.3
)
(19,352.6
)
(6,188.7
)
Net income (loss) per common share
(0.52
)
(0.51
)
(0.61
)
(1.84
)
(0.81
)
(0.84
)
(1.24
)
(2.45
)
(0.78
)
Shares used in computing net loss per common
	share (in thousands)
7,882
7,882
7,882
7,882
7,882
7,884
7,890
7,895
7,923
24
Table of Contents
Three Months Ended April 1, 2002 vs.
Three Months Ended April 2, 2001
Net Sales
Sales increased $2.2 million, or 13.5%, to
$18.1 million in the first quarter of fiscal 2002, from
$15.9 million in the first quarter of fiscal 2001. This
increase was primarily due to the full quarter contribution of
sales from restaurants opened in fiscal 2001 and positive
comparable restaurant sales of 1%. This was partially offset by
the loss of our World Trade Center restaurant and the closure of
our World Financial Center restaurant due to the events of
September 11th. Additionally, one restaurant was not suited
for remodeling to our current prototype and was closed during
the quarter. Comparable restaurant sales were adversely affected
by the effect of the economic downturn on our New York Central
Business District restaurants, the impact of the events of
September 11th across all of our restaurants and the
reduction in our menu pricing during the first quarter of fiscal
2002. Excluding the New York Central Business District
restaurants, comparable restaurant sales increased 9% in the
first quarter of fiscal 2002. This increase was driven by sales
performance in the six remodeled restaurants that were open for
the full quarter, and three restaurants that were remodeled
during the quarter, all of which incorporated our full product
line.
Costs and Expenses
Cost of goods sold.
Cost of goods sold increased
$0.6 million, or 15.4%, to $4.9 million in the first
quarter of fiscal 2002, from $4.2 million in the first
quarter of fiscal 2001. As a percentage of sales, cost of goods
sold increased to 26.9% of sales in the first quarter of fiscal
2002, from 26.5% in the first quarter of fiscal 2001. The
increase in cost of goods sold was primarily due to a reduction
in our menu pricing during the first quarter of fiscal 2002.
Restaurant operating expenses.
Restaurant operating expenses
increased $1.1 million, or 11.5%, to $11.1 million in
the first quarter of fiscal 2002, from $10.0 million in the
first quarter of fiscal 2001. This increase is primarily due to
the increased number of restaurants in operation this year. As a
percentage of sales, restaurant operating expenses decreased to
61.6% of sales in the first quarter of fiscal 2002, from 62.9%
in the first quarter of fiscal 2001. This decrease was primarily
due to reductions in our labor costs.
General and administrative expenses.
General and administrative expenses
increased $0.9 million, or 23.7% to $4.6 million in the first
quarter of fiscal 2002 from $3.7 million in the first quarter of
fiscal 2001. As a percentage of sales, general and
administrative expenses increased to 25.6% of sales in the first
quarter of fiscal 2002, from 23.6% of sales in the first quarter
of fiscal 2001. The increase was primarily due to growth in our
support staff since the first quarter of last year.
Depreciation and amortization.
Depreciation and amortization
decreased $0.8 million, or 40.1%, to $1.2 million in
the first quarter of fiscal 2002, from $2.0 million in the
first quarter of fiscal 2001. This decrease was primarily due to
additional depreciation on assets to be disposed of in
connection with restaurant remodels in the first quarter of
fiscal 2001, as well as reduced depreciation in the first
quarter of fiscal 2002 on assets for which impairment
write-downs were taken in fiscal 2001. As a percentage of sales,
depreciation and amortization was 6.7% of sales in the first
quarter of fiscal 2002, compared to 12.8% of sales in the first
quarter of fiscal 2001.
Restaurant pre-opening
expenses.
Restaurant pre-opening
expenses decreased to $0.1 million in the first quarter of
fiscal 2002, from $0.3 million in the first quarter of
fiscal 2001. This decrease was due to a reduction in labor and
travel costs in connection with the refinement of our training
programs and the penetration of existing markets.
Loss on impairment of property and equipment
and restaurant closures.
We did not
recognize impairment losses in the first quarter of fiscal 2002.
In the first quarter of fiscal 2001 we recorded
$0.1 million of impairment costs.
Lease termination
costs.
We did not recognize any lease
termination costs in the first quarter of fiscal 2002. In the
first quarter of fiscal 2001 we recorded $0.6 million of
lease termination costs.
Interest income and
expense.
Interest income decreased by
less than $0.05 million in the first quarter of fiscal
2002, from $0.1 million in the first quarter of fiscal
2001. Interest expense increased $0.3 million to
$0.4 million in the first quarter of fiscal 2002, from
$0.1 million in the first quarter of fiscal 2001. The
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increase is due to interest on our senior
subordinated debt, which was issued in November 2001,
partially offset by reduced interest cost on our outstanding
term loans and capital lease liabilities, as these obligations
were reduced by normal repayments since the first quarter of
fiscal 2001.
Fiscal Year 2001 vs. Fiscal Year
2000
Net Sales
Sales increased $19.0 million, or 37.1%, to
$70.2 million in fiscal 2001, from $51.2 million in
fiscal 2000. This increase was primarily due to sales from the
17 new restaurants opened in fiscal 2001, and the full year
contribution of sales from restaurants opened in fiscal 2000.
This increase was partially offset by a 2% decrease in sales of
the restaurants in our comparable restaurant base at the end of
the period, the closure of our World Financial Center restaurant
due to the events of September 11th, the closure of the
mini-training restaurant associated with the Xando Coffee and
Bar former headquarters and one additional restaurant closure.
The decrease in comparable restaurant sales was primarily due to
the especially acute effect of the economic downturn on our New
York Central Business District restaurants as well as the
significant impact of the events of September 11th.
Excluding the New York Central Business District restaurants,
comparable restaurant sales increased 7% in fiscal 2001,
including an 11% increase in the fourth quarter of fiscal 2001.
This increase was partially due to comparable restaurant sales
in six restaurants that were remodeled during the year to
incorporate our full product line.
Costs and Expenses
Cost of goods sold.
Cost of goods sold increased $5.0 million, or 35.7%, to
$18.8 million in fiscal 2001, from $13.8 million in fiscal
2000. As a percentage of sales, cost of goods sold decreased to
26.8% of sales in fiscal 2001, from 27.0% in fiscal 2000. The
decrease in cost of goods sold was primarily due to the full
year benefit of the elimination of our commissary during fiscal
2000.
Restaurant operating
expenses.
Restaurant operating
expenses increased $12.9 million, or 40.2%, to
$45.1 million in fiscal 2001, from $32.2 million in
fiscal 2000. As a percentage of sales, restaurant operating
expenses increased to 64.3% of sales in fiscal 2001, from 62.8%
in fiscal 2000. This increase, which was primarily labor costs,
was due to the development of the
Cosí
and
Cosí Downtown
prototypes, and the related restaurant
operating systems. These prototypes are expected to be the basis
for the future expansion of both the
Cosí
and
Cosí Downtown
concepts. Additionally, sales were
adversely affected by the events of September 11th, which
resulted in the fixed components of restaurant operating
expenses increasing as a percentage of sales.
General and administrative
expenses.
General and administrative
expenses increased $3.6 million, or 24.3%, from
$14.8 million in fiscal 2000 to $18.4 million in
fiscal 2001. The increase was primarily due to the development
of the support systems associated with our growth strategy and
$0.8 million of one-time expenses, including severance
payments related to the continued enhancement of our management
team. As a percentage of sales, general and administrative
expenses decreased to 26.2% of sales in fiscal 2001, from 28.8%
of sales in fiscal 2000, due to leveraging of our existing
infrastructure.
Depreciation and
amortization.
Depreciation and
amortization increased $0.5 million, or 8.6%, to
$6.7 million in fiscal 2001, from $6.2 million in
fiscal 2000. This increase was due to depreciation on
restaurants opened in 2001 and a full year's depreciation
on restaurants opened in 2000 of $1.4 million. These
increases were offset by a $0.9 million reduction from
asset impairment write-downs in connection with continued
refinement of our restaurant prototype.
Restaurant pre-opening
expenses.
Restaurant pre-opening
expenses remained constant at $1.4 million in fiscal 2001,
despite an increase in the number of restaurants opened or
remodeled. We opened or remodeled 23 restaurants in 2001
versus 18 in 2000. Both labor and travel costs were reduced in
our average pre-opening expenses per restaurant as we continued
the refinement of our training programs and penetrated existing
markets.
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Loss on impairment of property and equipment
and restaurant closures.
Loss on
impairment of property and equipment and restaurant closures
increased $2.6 million, to $8.5 million in fiscal
2001, from $5.8 million in fiscal 2000. These costs were
due to asset impairment write-downs, the loss of our World Trade
Center restaurant, World Trade Center kiosk and World Financial
Center restaurant and the closure of a restaurant.
Lease termination
costs.
Lease termination costs
increased $5.9 million to $6.4 million in fiscal 2001,
compared to $0.5 million in fiscal 2000. These costs were
primarily due to lease terminations in connection with
restaurants closed or planned to close in connection with the
continued refinement of our restaurant prototype in fiscal 2001.
Interest income and
expense.
Interest income decreased
$0.1 million to $0.3 million in fiscal 2001, from
$0.4 million in fiscal 2000. Interest expense increased
$0.4 million to $0.7 million in fiscal 2001, from
$0.2 million in fiscal 2000. The increase is due to
interest on our term loans drawn down in late fiscal 2000, which
were outstanding for all of fiscal 2001, and interest on our
senior subordinated debt, which was issued in November 2001.
Fiscal Year 2000 vs. Fiscal Year
1999
Net Sales
Sales increased $14.0 million, or 37.5%, to
$51.2 million in fiscal 2000, from $37.3 million in
fiscal 1999. This increase was primarily due to sales from 17
new restaurants, a full year contribution from
11 restaurants opened in fiscal 1999 and a 3% increase in
sales in our comparable restaurant base at the end of the
period. These increases were partially offset by the closure of
two restaurants in 1999, one restaurant in 2000 and our
mini-training restaurant associated with the Xando Coffee and
Bar former headquarters.
Costs and Expenses
Cost of goods sold.
Cost of goods sold increased $3.0 million, or 27.7%, to
$13.8 million in fiscal 2000, from $10.8 million in
fiscal 1999. As a percentage of sales, cost of goods sold
decreased to 27.0% of sales in fiscal 2000, from 29.1% in fiscal
1999. The decrease in cost of goods sold was primarily due to
the elimination of our commissary operation during the year and
a reduction of food costs as a percentage of sales.
Restaurant operating
expenses.
Restaurant operating
expenses increased $9.9 million, or 44.7%, to
$32.2 million in fiscal 2000, from $22.2 million in
fiscal 1999. As a percentage of sales, restaurant operating
expenses increased to 62.8% of sales in fiscal 2000, from 59.7%
in fiscal 1999. This increase, comprised primarily of labor and
fixed expenses, was due to the integration of Xando Coffee and
Bar and Cosí Sandwich Bar concepts.
General and administrative
expenses.
General and administrative
expenses increased $0.8 million, or 5.3%, to
$14.8 million in fiscal 2000, from $14.0 million in
fiscal 1999. This growth in general and administrative expense
was the result of only modest growth in our support center staff
levels, as we were able to realize efficiencies through
consolidation of restaurant support staff following the merger
in late 1999. As a percentage of sales, general and
administrative expenses decreased to 28.8% of sales in fiscal
2000, from 37.6% in fiscal 1999, due to leveraging of our
existing infrastructure.
Depreciation and
amortization.
Depreciation and
amortization increased $3.0 million, or 95.2%, to
$6.2 million in fiscal 2000, from $3.2 million in
fiscal 1999. This increase was due to a full year's
depreciation on restaurants opened in 1999 and depreciation of
restaurants opened in 2000 of $2.0 million. Additionally,
depreciation increased by $1.0 million on assets replaced
or to be replaced in connection with the remodeling of Xando
Coffee and Bar and Cosí Sandwich Bar locations. These
increases were offset by reduced depreciation on assets for
which impairment write-downs were taken in 1999.
Restaurant pre-opening
expenses.
Restaurant pre-opening
expenses increased $0.7 million, or 113%, to
$1.4 million in fiscal 2000, from $0.7 million in
fiscal 1999. This increase was due to an increase in the
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number of restaurants opened or remodeled, 18 as
compared to 13 in 1999, as well as an increase in labor and
travel costs as we entered new markets.
Loss on impairment of property and equipment
and restaurant closures.
Loss on
impairment of property and equipment and restaurant closures
increased $1.6 million to $5.8 million in fiscal 2000,
from $4.2 million in fiscal 1999. These costs were related
to asset impairment write-downs and one restaurant closure.
Lease termination
costs.
Lease termination costs
decreased $2.9 million to $0.5 million in fiscal 2000,
from $3.4 million in fiscal 1999. Lease termination costs
were incurred in connection with the merger, as certain
locations were not deemed suitable for our prototype, and were
therefore closed.
Merger costs and related
expenses.
During fiscal 1999 we
recorded costs of $8.9 million, resulting from the merger
of Xando Coffee and Bar and Cosí Sandwich Bar.
Stock compensation.
Stock compensation expense of $4.5 million in fiscal 1999
relates primarily to compensation expense recognized under
performance based plan accounting for stock options issued to
certain executives of Cosí Sandwich Bar, triggered by the
merger.
Interest income and
expense.
Interest income decreased
$0.1 million to $0.4 million in fiscal 2000, from
$0.5 million in fiscal 1999. Interest expense remained
steady at $0.2 million in both fiscal 2000 and fiscal 1999.
Potential Fluctuations in Quarterly Results
and Seasonality
Our quarterly operating results may fluctuate
significantly as a result of a variety of factors, including the
timing of new restaurant openings and related expenses,
profitability of new restaurants, increases or decreases in
comparable restaurant sales, general economic conditions,
consumer confidence in the economy, consumer preferences,
competitive factors, unanticipated increases in food, labor,
commodity, energy, insurance and other operating costs, weather
conditions and seasonal fluctuations.
Liquidity and Capital Resources
Cash and cash equivalents were $12.6 million
on April 1, 2002 compared with $4.5 million at
December 31, 2001 and $5.1 million at January 1,
2001. Working capital as of April 1, 2002 was
$5.2 million compared with a deficit of $5.3 million
at December 31, 2001 and a deficit of $2.8 million at
January 1, 2001. Our principal requirements for cash are
capital expenditures for the development of new restaurants,
maintaining or remodeling existing restaurants and funding
operations. Since inception, we have financed our requirements
for capital with private equity and debt financings. For the
first quarter of fiscal 2002 and the 52 weeks ended
December 31, 2001, we met our requirements for capital with
proceeds from the sale of Series C preferred stock and the
issuance of senior subordinated debt.
Net cash used in operating activities for the
first quarter of fiscal 2002 was $5.3 million, compared to
$12.3 million for the 52 weeks ended December 31,
2001 and $8.5 million for the 52 weeks ended
January 1, 2001. Funds used in operating activities in
fiscal 2001 increased primarily as a result of an increase in
our net loss compared to fiscal 2000.
Total capital expenditures for first quarter of
fiscal 2002 were $2.7 million, compared to expenditures of
$20.4 million for the 52 weeks ended December 31,
2001. These expenditures were primarily related to the
remodeling of three restaurants in the first quarter of fiscal
2002, opening of new restaurants and maintaining or remodeling
existing restaurants in fiscal 2001. Total capital expenditures
were $18.2 million for fiscal 2000, and were primarily
related to the opening of new restaurants, and for maintaining
or remodeling existing restaurants.
Net cash provided by financing activities
provided $16.2 million for the first quarter of fiscal 2002,
$32.1 million for the 52 weeks ended December 31, 2001
and $25.0 million for the 52 weeks ended
January 1, 2001. In the first quarter of fiscal 2002, we
issued approximately 2.0 million shares of Series C
preferred stock and received approximately $19.0 million,
net of offering costs. Of this, approximately $3.6 million
represented the exchange of approximately $3.5 million face
amount of our 13% senior
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subordinated notes, and accrued interest. We also
issued $0.5 million of additional 13% senior subordinated
notes during the first quarter of fiscal 2002. In fiscal 2001 we
sold approximately 2.5 million shares of Series C
preferred stock and received approximately $24.1 million,
net of offering costs. In November 2001, we entered into
senior subordinated note and warrant purchase agreements with a
group of investors, pursuant to which we received approximately
$8.8 million in proceeds. During 2001 we entered into other
financing agreements totaling approximately $0.4 million
and repaid approximately $1.4 million on existing loans and
capital leases. The financing activities for the 52 weeks
ended January 1, 2001 included $22.5 million from the
issuance of approximately 2.5 million shares of preferred
stock, and $3.0 million in proceeds from the issuance of
debt incurred under our equipment loan credit facility to
finance our equipment requirements, offset by payments on debt
and capital leases of $0.2 million, and $0.3 million,
respectively. There are two notes payable outstanding under the
equipment loan credit facility; a note payable due
September 1, 2003 at an interest rate of 9.1%, and a note
payable due December 1, 2003 at an interest rate of 8.5%.
We currently anticipate that our capital expenditures during
2002 will be approximately $30.0 million, principally for
the opening of approximately 30 to 35 new restaurants, and for
maintaining and remodeling existing restaurants. We expect that
future restaurants will require, on average, an investment per
restaurant (excluding pre-opening expenses which are expensed as
incurred) of approximately $0.7 million, net of landlord
allowances. We expect to fund these expenditures principally
through this offering.
Our capital requirements, including development
costs related to the opening of additional restaurants and for
maintenance and remodeling expenditures have been, and will
continue to be significant. Our future capital requirements and
the adequacy of available funds will depend on many factors,
including the pace of our expansion, real estate markets, the
availability of suitable site locations and the nature of the
arrangements negotiated with landlords. We believe that our
current liquidity and resources provides sufficient liquidity to
fund our operations for at least 12 months. We presently
anticipate that funds raised through this offering will be
sufficient to fund our cash requirements through 2004.
Other
Commitments
As of December 31, 2001
Total
Due within
Due in from
Due in from
Due after
Contractual Obligations
(in thousands)
1 year
1 to 3 years
3 to 5 years
5 years
Notes Payable
$
2,695.4
$
1,136.8
$
1,338.3
$
108.2
$
112.1
Sr. Subordinated Debt (a)
7,907.5
—
—
7,907.5
—
Capital Lease Obligations
577.1
441.9
135.2
—
Operating Lease Obligations (b)
100,848.5
10,254.0
21,780.6
21,947.5
46,866.4
Mandatorily Redeemable Preferred Stock (c)
93,292.9
—
18,768.2
74,524.7
—
(a)
To be prepaid with a portion of the proceeds from
	this offering. Amount shown is net of discount of $1,045.6.
(b)
Includes approximately $16.9 million of
	obligations on leases for restaurants which have either been
	closed or are planned to be closed.
(c)
To be converted to common stock at the time of
	this offering.
We are obligated under non-cancelable operating
leases for our restaurants and our administrative offices. Lease
terms are generally for ten years with renewal options and
generally require us to pay a proportionate share of real estate
taxes, insurance, common area and other operating costs. Some
restaurant leases provide for contingent rental payments.
Except for the foregoing, we have no off-balance
sheet contractual arrangements. We have no unconditional
purchase arrangements except that as of April 1, 2002 we
were party to contracts with respect to the construction of
restaurants for which approximately $1.6 million remained
to be paid, and we are obligated to purchase approximately $0.2
million of roasted coffee between now and fiscal year end 2002.
Historically we have not purchased nor entered into interest
rate swaps or future, forward option or other
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instruments designed to hedge against changes in
interest rates or the price of commodities we purchase, except
as described above.
Recently Issued Accounting
Pronouncements
In July 2001, the Financial Accounting
Standards Board, or FASB, issued SFAS No. 141,
"Business Combinations" and No. 142,
"Goodwill and Other Intangible Assets." SFAS 141
requires all business combinations initiated after June 30,
2001 to be accounted for using the purchase method. Under
SFAS 142, goodwill and intangible assets with indefinite
lives are no longer amortized but are reviewed annually (or more
frequently if impairment indicators arise) for impairment.
Separable intangible assets that are not deemed to have
indefinite lives will continue to be amortized over their useful
lives (but with no maximum life). The amortization provisions of
SFAS 142 apply to goodwill and intangible assets acquired
after June 30, 2001. We are currently evaluating the impact
of the adoption of SFAS 141 and 142. We believe that
adoption of this standard will not have a material effect on our
financial statements, principally because our significant
business combination (See Note 3 to the financial
statements included in the Prospectus) was accounted for under
the pooling of interests method of accounting in which no
goodwill was recorded. Effective January 1, 2002, our
trademarks with indefinite lives will no longer amortize. We
periodically review our intangible assets for possible
indicators of impairment.
In June 2001, the FASB issued SFAS
No. 143, "Accounting for Asset Retirement
Obligations." This statement addresses financial and
reporting obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. It
applies to legal obligations associated with the retirement of
long-lived assets that result from acquisition, construction,
development and/or the normal operation of a long-lived asset,
except for certain obligations of lessees. This statement is
effective for financial statements issued for fiscal years
beginning after June 15, 2002. We believe adoption of
SFAS 143 will not have a material effect on our financial
position or results of operations.
In August 2001, the FASB issued SFAS
No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets." SFAS 144 supercedes SFAS 121
and APB Opinion No. 30, "Reporting Results of
Operations Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions." This statement retains the
fundamental provisions of SFAS 121 for recognition and
measurement of impairment, but amends the accounting and
reporting standards for segments of a business to be disposed
of. We adopted the provisions of this statement beginning in
fiscal 2002. We do not believe that the adoption of
SFAS 144 will have a material impact on our financial
position or results of its operations.
Quantitative and Qualitative Disclosures About
Market Risk
Our market risk exposures are related to our
cash, cash equivalents, investments and interest that we pay on
our debt and senior subordinated notes. We have no derivative
financial instruments or derivative commodity instruments in our
cash, cash equivalents and investments. We invest our excess
cash in investment grade highly liquid short-term investments.
We anticipate investing our net proceeds from this offering in
similar investment grade and highly liquid investments. These
investments are not held for trading or other speculative
purposes. Changes in interest rates affect the investment income
we earn on our investments and, therefore, impact our cash flows
and results of operations.
All of our transactions are conducted, and our
accounts are denominated, in United States dollars. Accordingly,
we are not exposed to foreign currency risk.
Inflation
The primary inflationary factors affecting our
business are food and labor costs. A large number of our
restaurant personnel are paid at rates based on the applicable
minimum wage, and increases in the minimum wage will directly
affect our labor costs. Many of our leases require us to pay
taxes, maintenance, repairs, insurance and utilities, all of
which are generally subject to inflationary increases. We
believe that inflation has not had a material impact on our
results of operations in recent years.
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BUSINESS
We own and operate 66 fast casual restaurants in
11 states and the District of Columbia.
Cosí
restaurants are all-day cafés that feature signature
bread and coffee products in an environment we adjust
appropriately throughout the day.
Cosí
restaurants
offer breakfast, lunch, afternoon coffee, dinner, and dessert
menus full of creative, cravable foods and beverages. From
Cosí
Squagels®
(square bagels made from
Cosí bread) to our award-winning sandwiches and pizzas,
Cosí has developed featured foods that are built around our
secret, generations-old recipe for crackly crust flatbread.
These products are freshly baked in front of our customers
throughout the day in open flame stone hearth ovens prominently
located in each of our restaurants. Our coffees are freshly
brewed and expertly prepared by our baristas and bartenders. Our
coffee beverages range from simple Cosí brews and
traditional lattes to our innovative Double Oh Arctic Mochas and
specialty coffee cocktails, featuring the
Mocha
Kiss®
. We offer friendly and attentive service in a
warm and inclusive atmosphere. Our vision is to become
America's favorite café by giving every customer
something to look forward to in their day.
We operate our restaurants in two formats:
Cosí
and
Cosí Downtown.
All of our
restaurants offer breakfast, lunch and afternoon coffee in a
counter service format. After 5 p.m., our
Cosí
restaurants add table service and offer dinner and dessert
in a casual dining format.
Cosí Downtown
restaurants, which are located in non-residential central
business districts close, for the day, in the early evening. All
of our restaurants are designed to be welcoming and comfortable,
featuring oversized sofas, chairs and tables, and faux painted
walls. The atmosphere of Cosí is appropriately managed for
each daypart by changing the music, both style and volume, and
lighting throughout the day. The design scheme of our counters
and bars, menu boards as well as condiment counters and server
stations incorporate warm colors and geometric patterns,
intended to create a visual vocabulary that can be easily
identified by our customers.
Our restaurants are located in a wide range of
markets and trade areas, including business districts and
residential communities in both urban and suburban locations. We
believe that we have created significant brand equity in our
markets and that we have demonstrated the appeal of our concept
to a wide variety of customers. We opened 17 restaurants in
2001, including seven restaurants in the fourth quarter, and
expect to open approximately 30 to 35 restaurants in 2002
and approximately 53 to 59 restaurants in 2003 by expanding
our presence in existing markets and selectively entering new
markets.
We believe that the flexibility of our multiple
daypart model, the appeal of our high quality, innovative
product offering, and our ability to operate in a wide variety
of real estate markets have created an attractive restaurant
model, providing us with considerable growth opportunities to
develop our brand nationwide.
History
Cosí was created through the
October 1999 merger of two restaurant concepts, Cosí
Sandwich Bar, Inc. and Xando, Incorporated. Each company served
a similar customer, but focused on different parts of the day.
Cosí Sandwich Bar.
The Cosí Sandwich Bar concept was
created in Paris in the early 1990's and brought to the
United States by us in 1996. Cosí Sandwich Bar signature
"crackly crust" flatbread, derived from a
generations-old Italian recipe, was prepared daily at each
restaurant where fresh loaves were baked throughout the day.
Cosí Sandwich Bar focused on selling sandwiches in high
density central business districts in New York, Washington DC,
Boston and Philadelphia. Cosí Sandwich Bar received
numerous awards, including Time Out New York's
#1 Sandwich and Nation's Restaurant News "Hot
Concept."
Xando Coffee and Bar.
Xando Coffee and Bar, founded in 1994,
was an innovative concept that went beyond the traditional
specialty coffee bar. Xando Coffee and Bar locations were open
for five dayparts. The 5 p.m. "unveiling" of a
full liquor bar featured coffee cocktails and was intended to
create a dynamic evening environment. The atmosphere of Xando
Coffee and Bar was adjusted appropriately for each daypart by
changing the music and lighting throughout the day. The evening
environment was completed by the addition of table service.
Xando Coffee and Bar received numerous awards, including
Innovative Concept of the Year from the Connecticut Restaurant
Association.
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Over the last two years during the development of
our concept, we added Cosí Sandwich Bar products to the
Xando Coffee and Bar five daypart platform. We believe we have
created a restaurant concept that satisfies our customers'
needs from
Wake Up Call to Last Call®
. In 2001,
Restaurant Hospitality Magazine selected Cosí as one of
America's Premier Concepts of Tomorrow.
Industry Overview
Cosí competes in the fast casual segment of
the restaurant industry. This segment is characterized by a
higher quality, healthier menu selection than offered at quick
service restaurants as well as by a less expensive and more time
efficient experience than typically found at casual dining
restaurants. It is estimated by NPDFoodworld, an independent
industry market research firm, that the fast casual segment
constituted only approximately 2% of the restaurant
industry's 2000 domestic volume. The 2002 restaurant
industry's sales are estimated by the National Restaurant
Association, to approach approximately $408 billion.
According to NPDFoodworld, in 2001, the fast
casual segment grew by 12%, comprised of a 9% increase in
traffic and a 3% increase in average check.
We believe that the fast casual segment will
continue to grow faster than the overall restaurant industry as
a result of a number of social, demographic and lifestyle
trends, including:
•
longer working hours, an increase in dual income
	families and the aging of the Baby Boomer population result in
	more frequent dining out as well as an increased premium on
	consumers' time;
•
more sophisticated consumer tastes characterized
	by desire for newer, fresher and higher quality products; and
•
a generally more health conscious society.
Our average check in 2001 of $6.37 is comparable
to the average check in 2001 of $6.19 of Panera Bread Company, a
relevant fast casual competitor, as reported in its 2001 annual
report on Form 10-K filed with the SEC.
We believe the fast casual segment is highly
fragmented. We also believe that, with no clear leader and no
national brand in the fast casual segment, there is considerable
opportunity for expansion and for the development of a leading
nationwide brand.
Concept and Business Strategy
Our objective is to build a nationwide system of
distinctive restaurants that generate attractive unit economics
by appealing to a broad range of customers across five dayparts:
breakfast, lunch, afternoon coffee, dinner and dessert. Inherent
in this objective is our ability to leverage our core
competencies in both bread and coffee by offering creative,
cravable products during each daypart, reinforcing the Cosí
brand and creating a loyal customer base. To achieve this
objective, we intend to utilize the following strategies:
Build Awareness of the Cosí Brand.
We believe that the Cosí name has
achieved substantial brand equity among our customers and has
become well known within our markets for our signature bread and
coffee products, most notably, our award winning crackly crust
flat bread, the foundation of every Cosí sandwich. We
intend to strengthen this brand loyalty by continuing to offer
new menu items based on these signature products, while
delivering what we believe to be a consistently memorable
customer experience. Additionally, we believe that the Cosí
name has become representative of the "cozy" feel of
our restaurants, which feature comfortable seating and a warm,
inclusive atmosphere. Further, we prominently feature our sun
and moon logo on our exterior signage, marketing materials and
packaging, in order to emphasize that our customers can visit
Cosí throughout the day.
Provide a Menu Offering Full of Creative,
Cravable Foods and Beverages.
We offer
proprietary bread and coffee products for all five dayparts. All
of our signature bread products are made from scratch on
premises in front of the customer and baked fresh in our open
flame stone hearth oven all day. We believe that our extensive
café menu of cravable proprietary products distinguishes us
from our competition. Our food
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menu features Cosí
Squagels®
(square bagels made from Cosí bread), sandwiches, salads,
soups,
Cosí-dillas
TM
(Cosí's
version of the Mexican classic),
Cosí
Corners
TM
and other appetizers,
Warm n' Cosí Melts
TM
, pizzas,
s'mores and other desserts. Our beverage menu features a
full line of coffee beverages, teas, Arctic smoothies, mochas
and lattes,
Screamers
® (coffee beverages topped with
ice cream) and our signature coffee cocktails. A wide range of
our products, including: Cosí Squagel baskets, fresh fruit
platters, Cosí Sandwich baskets, Salads, and Dessert
Platters, are available outside of the four walls of our
restaurants through our catering services. We maintain a
pipeline of new menu offerings that are systematically
introduced in order to keep our products relevant to consumers
in each daypart.
Capitalize on Proven Multiple Daypart Model.
By operating in multiple dayparts, we
are able to maximize revenues and leverage both development and
operating costs. Cosí selects sites that experience strong
traffic in at least three of five dayparts. We believe that our
core competencies in bread and coffee create a foundation of
products suitable for each daypart. The ambiance, through
adjustments of lighting and music, is also managed to be
appropriate and different for each daypart. We believe our
versatility has allowed us to build strong customer loyalty with
a high percentage of repeat business. Additionally, as we
continue to enhance our product offering in each daypart, our
new restaurant average unit volumes have significantly
increased. During 2001, despite the negative impact of
September 11th across all of our restaurants, average sales
for restaurants opened from 1994 to 1999 were approximately
$1,040,000 and average sales for restaurants opened in 2000 were
approximately $1,400,000.
Operate in Multiple Real Estate Paradigms.
Our restaurants are located in a wide
range of markets and trade areas, which include business
districts and residential communities in both urban and suburban
locations. We believe that this demonstrates the flexibility of
our restaurant designs and the appeal of our concept to a wide
variety of consumers. Through our development of the
Cosí
and
Cosí Downtown
formats in both
existing and new markets, we believe we have the platform to
expand in multiple real estate paradigms in order to maximize
financial performance.
Provide a High Level of Customer Service.
Cosí recognizes that a key to a
positive customer experience is the customer's interaction
with our partners. We dedicate significant time and resources to
our partners' experience through our "Life of the
Partner" program to focus on every aspect of a
partner's development with us, from sourcing, selection and
hiring to orientation, training, continuing education,
performance evaluation and promotion. Specifically, we offer our
partners industry-competitive benefits and equity incentives and
we use a selection system built around a success predicting
testing program. Our training processes focus on teaching
partners to deliver exceptional products with personalized,
friendly service, while driving financial results through
concentration on increasing sales and managing profitability.
Leverage our Infrastructure.
Cosí has a deep management
infrastructure led by seasoned professionals from both the
retail and the restaurant industries. We believe that this
management team, combined with our founder driven culture,
provides Cosí with the right chemistry and experience to
execute our growth plans. In addition, we have made a
substantial investment in an application service provider model,
which allows us to maintain advanced technology without the need
to continually re-invest in infrastructure and personnel. We
believe our management and systems infrastructure will allow us
to manage our growth without any further significant investment
in information systems, equipment or personnel.
Growth
We believe that there are significant
opportunities to expand our concept and brand on a nationwide
basis. In addition to new restaurant growth, we believe that we
will increase average unit volumes through the launch of new
menu segments, product innovations and catering sales.
New Unit Growth.
The
addition of new restaurants has been our primary source of
growth historically and we anticipate that it will be the
primary source of growth in the near term. We believe that we
have adopted a manageable growth strategy and intend to develop
many of our new restaurants in our existing markets, and
selectively enter new markets, to gain operational efficiencies,
enhance convenience for our customers and increase brand
awareness. Cosí does not utilize a commissary system and
thus our expansion is not restricted by geographic proximity to
commissary kitchens. Our site selection criteria is flexible and
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allows us to adapt to a wide variety of real
estate paradigms including central business districts, urban and
suburban residential locations and suburban shopping centers.
Because the Cosí concept leverages five major dayparts, we
expect that we will develop restaurants in all of these real
estate paradigms so that a Cosí restaurant will be
available where people live, work and play.
We plan to open approximately 30 to 35 new
restaurants during the remainder of fiscal 2002, and
approximately 53 to 59 new restaurants in fiscal 2003. We
expect that the majority of our restaurants to be opened in the
future will be in the
Cosí
all-day format.
Increased Average Unit Volumes.
We plan to increase sales at our
restaurants by expanding our food and drink selections,
leveraging each of the five dayparts: breakfast, lunch,
afternoon coffee, dinner and dessert. We maintain a pipeline of
new menu segments and product launches which are systematically
introduced in order to keep our product offerings relevant to
consumers in each daypart, drive customer frequency and increase
our average check. Additionally, Cosí catering provides us
with an additional channel for growth outside of the four walls
of the restaurant. Due to the absence of a national catering
brand, we believe Cosí has the opportunity to build a
nationally recognized catering business with our restaurants
serving as distribution points.
With the implementation of this strategy, our new
restaurant average unit volumes have significantly increased.
During 2001, despite the negative impact of September 11th
across all of our restaurants, average sales for restaurants
opened from 1994 to 1999 were approximately $1,040,000 and
average sales for restaurants opened in 2000 were approximately
$1,400,000.
Expansion Strategy and Site
Selection
Our site selection criteria focuses on
identifying markets, trade areas, intersections and specific
sites that yield the greatest density of desirable demographic
indicators, heavy pedestrian and vehicular traffic patterns, and
a highly visible site. In order to maximize our market
penetration potential we have developed flexible physical site
criteria that allow us to meet the siting specifics of
individual markets as they uniquely present themselves. Our
restaurants operate in a range of paradigms including: urban
central business district, urban residential and suburban
locations. Sites are specifically selected within these
paradigms where there are strong generators for at least three
of the five dayparts. Our prototype restaurant is
2,700 square feet. Current locations range from
approximately 1,800 square feet to approximately
4,000 square feet.
Cosí restaurants are designed to be
welcoming and comfortable, combining elements of an efficient,
fast-paced counter-service concept with those of a cozy and
inviting table service café. Inside each restaurant, the
steel-encased open flame stone-hearth oven sits in a prominent
position with its flame visible to customers throughout the day.
Our restaurants feature oversized sofas, contemporary chairs and
tables, and faux painted walls. Lighting and music, which change
throughout the day, are also key elements in creating the
inviting Cosí atmosphere. The design scheme of the counters
and bars, menu boards as well as condiment counters and server
stations use warm colors and geometric patterns intended to
create an identifiable visual vocabulary and recognizable trade
dress. All of the counters in our restaurants are modular, which
provides flexibility in design. A signature of each Cosí
location is a painted mural, which covers the liquor display.
The liquor bar is hidden during the day and is unveiled at
5 p.m., transforming
Cosí
into an energetic
evening café. Each
Cosí
exterior features
prominent signage that clearly displays our trade name and sun
and moon logo and the monikers "Breakfast,"
"Lunch," "Dinner" and "Dessert."
The exterior signage for
Cosí Downtown
restaurants
displays the Cosí Downtown name, the sun and moon logo and
the monikers "Breakfast," "Lunch" and
"Catering."
Existing Locations.
All of our restaurants are located on
leased properties. Each lease typically has a 10 year base
rent period, with various renewal options. Each lease requires a
base rent, and some locations provide for contingent rental
payments. At most locations, we reimburse the landlords for a
proportionate share of either the landlord's taxes or
yearly increases in the landlord's taxes.
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The following table depicts existing restaurants,
by region as of April 1, 2002:
Street Address
City
Format
Northeast:
103 Pratt Street
Hartford, CT
Cosí (a)
338 Elm Street
New Haven, CT
Cosí
970 Farmington Avenue
W. Hartford, CT
Cosí
133 Federal Street
Boston, MA
Cosí Downtown
53 State Street
Boston, MA
Cosí Downtown
14 Milk Street
Boston, MA
Cosí Downtown
2160 Broadway
New York, NY
Cosí
504 Avenue of the Americas
New York, NY
Cosí
257 Park Avenue South
New York, NY
Cosí
165 East 52nd Street
New York, NY
Cosí Downtown
38 East 45th Street
New York, NY
Cosí Downtown
11 West 42nd Street
New York, NY
Cosí Downtown
60 East 56th Street
New York, NY
Cosí Downtown
3 World Financial Center (b)
New York, NY
Cosí Downtown
55 Broad Street
New York, NY
Cosí Downtown
54 Pine Street
New York, NY
Cosí Downtown
1633 Broadway
New York, NY
Cosí Downtown
61 West 48th Street
New York, NY
Cosí Downtown
202 West 36th Street
New York, NY
Cosí Downtown
3 East 17th Street
New York, NY
Cosí Downtown
685 Third Avenue
New York, NY
Cosí Downtown
461 Park Avenue South
New York, NY
Cosí
279 Main Street
Huntington, NY
Cosí
50 Purchase Street
Rye, NY
Cosí
38 East 51st Street
New York, NY
Cosí Downtown
841 Broadway
New York, NY
Cosí
15 S. Moger Avenue
Mt. Kisco, NY
Cosí
116 Montague Street
Brooklyn, NY
Cosí
545 Washington Boulevard
Jersey City, NJ
Cosí Downtown
369 Lexington Avenue
New York, NY
Cosí Downtown
77 Quaker Ridge Road
New Rochelle, NY
Cosí
1298 Boston Post Road
Larchmont, NY
Cosí
Mid-Atlantic:
235 South 15th Street
Philadelphia, PA
Cosí
325 Chestnut Street
Philadelphia, PA
Cosí
(a)
Currently operating as a Xando Coffee and Bar
	location.
(b)
Currently closed due to the events of
	September 11th.
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Street Address
City
Format
Mid-Atlantic:
1128 Walnut Street
Philadelphia, PA
Cosí
3601 Walnut Street
Philadelphia, PA
Cosí
761 Lancaster Avenue
Bryn Mawr, PA
Cosí
215 Lombard Street
Philadelphia, PA
Cosí
1700 Market Street
Philadelphia, PA
Cosí Downtown
1720 Walnut Street
Philadelphia, PA
Cosí
King of Prussia Mall
King of Prussia, PA
Cosí
11909 Democracy Drive
Reston, VA
Cosí
3003 N. Charles Street
Baltimore, MD
Cosí (a)
1350 Connecticut Avenue
Washington, DC
Cosí
1647 20th Street NW
Washington, DC
Cosí
301 Pennsylvania Avenue SE
Washington, DC
Cosí (a)
2050 Wilson Boulevard
Arlington, VA
Cosí
1700 Pennsylvania Avenue
Washington, DC
Cosí Downtown
700 King Street
Alexandria, VA
Cosí
700 11th Street
Washington, DC
Cosí
4250 Fairfax Drive
Arlington, VA
Cosí
1919 M Street
Washington, DC
Cosí
1001 Pennsylvania Avenue NW
Washington, DC
Cosí Downtown
7251 Woodmont Avenue
Bethesda, MD
Cosí
1501 K Street NW
Washington, DC
Cosí Downtown
Mid-West:
116 S. Michigan Avenue
Chicago, IL
Cosí
57 E. Grand Street
Chicago, IL
Cosí
230 W. Washington Street
Chicago, IL
Cosí Downtown
1200 North State Parkway
Chicago, IL
Cosí
203 North LaSalle Street
Chicago, IL
Cosí Downtown
1101 Lake Street
Oak Park, IL
Cosí
21-25 East Chicago Avenue
Hinsdale, IL
Cosí
4074 The Strand West
Columbus, OH
Cosí
301 South State Street
Ann Arbor, MI
Cosí
101 North Old Woodward Avenue
Birmingham, MI
Cosí
8775 N. Port Washington Road
Fox Point, WI
Cosí
(a)
Currently operating as a Xando Coffee and Bar
	location.
Cosí Products
We offer proprietary bread and coffee products
for all five dayparts — breakfast, lunch, afternoon
coffee, dinner and dessert. All of our signature bread products
are made from scratch on premises in front of the customers and
baked fresh in our open flame stone hearth oven throughout the
day. These cravable proprietary products provide the basis for
our extensive café menu and, we believe, distinguish us
from our competition. Our food menu features Cosí
Squagels®
(square bagels made from Cosí bread),
sandwiches, salads, soups,
Cosí-dillas
TM
(our version of the Mexican classic),
Cosí
Corners
TM
and other appetizers,
Warm n'
Cosí Melts
TM
, pizzas, s'mores and other
desserts. Our beverage menu features a full line of coffee
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beverages, teas, Arctic smoothies, mochas and
lattes,
Screamers
® (coffee beverages topped with ice
cream), and our signature coffee cocktails.
We regularly introduce new menu segments and
products in order to keep our product offerings relevant to
consumers in each daypart. New recipes are developed by our
executive chef in conjunction with our partner suppliers. These
recipes are thoroughly evaluated, both internally and through
consumer focus groups. New products are intended to drive
customer frequency and average checks, resulting in increased
average unit volumes in new locations and positive same
restaurant sales increases in existing locations.
A selection of Cosí signature products is
described below:
Cosí
Sandwiches.
The foundation of every
Cosí sandwich is our signature crackly crust flatbread,
derived from a generations-old Italian recipe. We prepare dough
daily at each of our restaurants and bake fresh loaves
throughout the day. Our Cosí Bread is then filled with an
innovative mix of ingredients, creating our specialty sandwich
combinations, such as Buffalo Chicken with Blue Cheese
S'bread, Tandoori Chicken with Roasted Red Peppers and
Cosí Vinaigrette and Cranberry Roasted Turkey with Romaine.
In addition to our marketed list of specialty sandwich
combinations, customers can create their own Cosí sandwich
combinations by choosing from the vast array of fresh
ingredients displayed behind glass counters, as they watch
Cosí Bread being baked in our prominently displayed open
flame stone hearth oven. For dinner, we recently introduced
Warm n' Cosí Melts
TM
, including the
Cosí Cheese Steak and the Cosí Chicken Parmesan.
Cosí Coffee and Coffee Cocktails.
Cosí Coffee includes a full line
of espresso-based beverages such as lattes, cappuccinos and
mochas as well our proprietary house blend of four Central and
South American coffees. Cosí also features Arctic Mochas
and Lattes, which have become warm weather favorites of our
customers. In the evening, we integrate liquor into our coffee
beverage line and feature a variety of coffee cocktails such as
the
Mocha Kiss
® (Kahlua, Irish Cream, Grand Marnier,
espresso, steamed milk and chocolate syrup topped with whipped
cream). Cosí partners expertly brew coffee using
state-of-the-art brewing equipment located in each restaurant,
with the exacting standards we believe are necessary to ensure a
great cup every time.
Cosí Pizza.
Cosí Pizza is made from an
intriguingly thin, crispy crust version of our flat bread and
baked in our stone hearth ovens. We use fresh ingredients and a
secret recipe tomato sauce, which carefully balances flavors.
Cosí customer favorites, which include both red and white
pies, feature the classic traditional cheese pizza, as well as
our specialty Grilled Chicken and Caramelized Onions, Goat
Cheese and Roasted Red Peppers, and Bruschetta Pizzas.
Additionally, we offer a variety of traditional and specialty
toppings that enable our customers to build their own pizza. At
11 inches round, Cosí Pizzas make a satisfying course for
one, or a shareable portion of a larger meal.
After the introduction of Cosí Pizza and our
enhanced dinner menu to existing locations, food sales in the
dinner and dessert dayparts increased approximately 115% in
those locations from the four weeks before the menu launch to a
four-week period in the first quarter of 2002 following the menu
launch.
Cosí
Squagels®
. Cosí
Squagels®
are square bagels made from fresh
Cosí Bread and baked in our stone hearth ovens every
morning. Cosí
Squagels®
are a key element of
our breakfast daypart and leverage the popularity of Cosí
Bread and New York style bagels. Cosí
Squagels®
come in a variety of flavors, including: Asiago Cheese,
Poppyseed, Sesame, Onion, Everything, Plain, Salt, Cinnamon
Raisin, and Dried Fruit and can be individually prepared by our
partners with a full line of Cream Cheese S'breads.
After the introduction of Cosí
Squagels®
to existing locations, sales in the
breakfast daypart increased approximately 30% in those locations
from the four weeks before the product launch to a four-week
period in the first quarter of 2002 following the product launch.
Cosí S'mores and S'mmm...oreos.
Cosí S'mores is an
interactive dessert, which allows customers to roast their own
marshmallows and melt chocolate over an open flamed hibachi
right at their table. The S'mmm...oreos is a variation on
the S'mores utilizing giant Oreo® cookies instead of
the traditional graham cracker. These products complement our
full dessert offering and appeal to a broad range of customers.
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Cosí Salads.
The Cosí Salad offering features the Signature Salad, with
spinach and field greens, gorgonzola cheese, grapes, pistachios,
pears and dried cranberries, and a roasted shallot sherry
vinaigrette, as well as the Chicken Shanghai Salad, with mesclun
lettuce with grilled chicken, Oriental noodles, carrots, and
scallions tossed with low fat Oriental dressing. Our salads are
available in lunch portions or in larger sharable portions for
dinner.
Catering.
Our
catering menu offers a wide range of products to meet our
customers' needs, including: Cosí
Squagel
®
baskets, fresh fruit platters, Cosí Sandwich baskets,
Salads, and Dessert Platters. Cosí catering provides us
with an additional channel for growth outside of the four walls
of the restaurant. With the absence of a national catering
brand, we believe Cosí has the opportunity to build a
nationally recognized catering business with our restaurants
serving as distribution points.
Unit Economics
During 2001, despite the negative impact of
September 11th across all of our restaurants, average sales
for restaurants opened from 1994 to 1999 were approximately
$1,040,000 and average sales for restaurants opened in 2000 were
approximately $1,400,000. This increase is due to the leveraging
of our multiple daypart strategy, which entailed adding new menu
segments and innovative products throughout our five dayparts in
order to raise sales.
The following graphics depict the percentage of
sales each daypart contributed to our overall sales at our
locations in fiscal 2001. The first graph represents our five
daypart locations and the second graphic represents our three
daypart locations. As shown,
Cosí
five daypart
restaurants have significant revenues both before and after
5 p.m., while the predominance of
Cosí Downtown
three daypart restaurants sales occur during the lunch daypart.
As the third graphic depicts, our restaurants have a strong
beverage component. Our beverage to food ratio in 2001 across
all locations is approximately 33% beverage to 67% food, a ratio
resulting in high gross margins. Our gross margin, sales less
cost of goods sold, for restaurants opened the full year of 2001
was 73.4%.
We believe that our restaurants located in the
Washington Metropolitan Statistical Area, or MSA, are most
representative of the restaurants that we expect to develop in
the future. The restaurants located in this
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MSA, our second largest market, with 11 locations
that were open for all of 2001, did not face the combination of
factors that impacted our 16 restaurants in New York Central
Business District locations. Despite the effects of
September 11th on this MSA, these restaurants had a
restaurant operating margin of 18.3% in 2001. Please see
"
Management's Discussion and Analysis of Financial
Condition and Results of Operations
".
People
At the end of the first quarter of fiscal 2002 we
had 1,902 employees, 76 of which served in administrative
or executive capacities, 176 of which served as restaurant
management personnel, and 1,650 of which were hourly
restaurant personnel.
We recognize that our partners are a key to a
positive customer experience. We encourage partners to share a
sense of ownership and mission with management. It is because of
this shared sense of ownership that we call all Cosí
employees "partners." We have developed the Life of
the Partner model that facilitates a Cosí partner's
development from initial sourcing and selection to continuing
education and promotion.
We believe we are able to attract highly
qualified and energetic partners at all levels by offering an
industry-competitive catalog of benefits including "My
Slice of the Bread" stock options, continuous internal
growth channels, an Experience Life Bonus, educational
contributions and a 401(k) plan.
Our restaurants are staffed by managers,
certified shift leaders and hourly partners. All Cosí
hourly and management partners complete a predictive test and
interview process which assesses the individual's
"fit" against our indicators for success, and measures
areas such as drive and energy, service orientation and
leadership abilities. Because of the food delivery system within
the restaurant, all hourly partners have some level of customer
interaction. We have designed the hourly partner hiring profile
to attract people with high-energy, who are customer service
oriented and driven to succeed.
We have a comprehensive and structured training
program for all hourly functions as well as management
positions. Each hourly partner's training program begins
with a structured orientation given by a Regional Training
Manager and is followed by a week of position training with a
certified "Commando," or in-restaurant trainer, and
daily written tests, and continues on every subsequent shift
with the General Manager. The Manager Training Program is
divided into four segments: Position Training, Leadership and
Team Building, Customer Experience Management, and Finance and
Administration. The Manager Training Program focuses on all
aspects of business management, people development and results
orientation measured through demonstrative and skills based
testing. We strive to select and develop well trained business
leaders and talented, motivated partners.
None of our employees are covered by collective
bargaining agreements, and we have never experienced an
organized work stoppage or strike. We believe that our working
conditions and compensation packages are competitive and
consider relations with our employees to be good.
Operations
Management Structure.
The restaurant operations team is
built around regional centers, led by a Regional Vice President,
who reports to our Chief Operating Officer. Each Regional Vice
President is responsible for all operations, training,
recruiting and human resources within his or her region. The
Regional Vice Presidents are responsible for the financial plan
for their region and for the people development plan to support
the growth in their region. They oversee all aspects of the
sourcing, selecting, hiring, training and development outlined
in our Life of the Partner program. The Regional Vice Presidents
are responsible for execution of our management systems.
Internal Communication.
Our training programs emphasize the
importance of communication between management and hourly
partners on a daily basis. We have developed a succession of
structured communication from the regional level to the hourly
partner level to ensure that all operations initiatives are
communicated and executed effectively. The strength of our
communication process allows us to react swiftly
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to partner and customer feedback. We believe that
this process allows us to maintain consistent restaurant
operations as we grow.
Sales Forecasting.
Each of the Regional Vice Presidents
and their District Managers have real time access to sales
forecast and actual sales information in their restaurants
through our web based reporting system. This plan allows
restaurant management teams to plan their staffing requirements
on a weekly, daily and even hourly basis to effectively serve
our customers. We believe the ability of our multi-unit
supervisors to direct changes based on financial results
throughout the week gives us a competitive advantage.
Customer Service Evaluation.
During training, Cosí hourly
partners are introduced to our standards of service. In order to
monitor our success in executing to these standards and to give
our hourly partners consistent performance feedback, Cosí
employs an external secret shopping service. Scores and comments
are reviewed with the individual partner who was shopped and
then posted in the restaurant to educate all of the partners.
Our management bonus system includes the scores from these
secret shops. Finally, rankings in critical categories are
distributed company wide by region and district to identify
which restaurants are achieving the highest scores.
Product Quality.
Our
food and beverage quality is managed at three critical stages:
sourcing, line readiness and product preparation. Products are
delivered several times each week so that all restaurants
maintain fresh, quality products. Because our restaurants serve
a different variety of products during all five dayparts, a
specific line readiness checklist is completed to ensure that
the products have been rotated, prepared and staged correctly.
Finally, our partner-training program includes certification in
both product knowledge and product preparation standards.
Food and Labor Cost Controls.
Our information system allows us to
track actual versus theoretical labor and cost of goods sold.
Detailed reports are available at the restaurant level showing
variances on an item-by-item basis. The system is fully
integrated into our accounts payable and general ledger systems
so that restaurant managers have control and can be held
accountable for their results. The restaurant manager's
bonus includes a component based on food cost variance versus
theoretical costs.
Cosí has developed a labor management system
that helps our managers control labor and ensures that staffing
levels are appropriate to meet our service standards. This labor
management system provides our multi unit managers with
performance reports on a real time basis that help them make
staffing adjustments during the course of the week. Our system
was developed to maximize labor efficiency and profitability of
the restaurants.
We believe that the combination of these
structured restaurant operating systems and technologies allow
our operators to focus their time more effectively on the day to
day drivers of our business.
Scaleable Systems Infrastructure
We believe that our information technology
infrastructure is one of our competitive advantages. We use an
ASP model, which allows us to have the latest in technology and
up to the minute information without continually having to
re-invest in hardware and personnel. Our strategy includes
utilizing web technology to put information into the hands of
the people who need to make decisions in a timely manner.
Our point of sale, back-office modules, and our
Oracle financials systems are fully integrated. This integration
allows us to all be working with the same, accurate data with
minimal staffing. All information relating to restaurant
operations is uploaded onto a secure web site five times a day
for review and pre-selected reports are distributed to our
operations team via wireless and e-mail solutions.
We have a redundancy and back-up plan in place
for all data as well as a disaster recovery plan. The plan
encompasses daily back up, weekly off-site storage, and
redundant facilities.
Marketing
We believe we enjoy broad appeal among fast
casual customers, who place a high value on quality food,
convenience to home and work, and a good value proposition. We
compete with quick-serve alternatives
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during the day and casual dining restaurants in
the evening, and have developed our menu and pricing
accordingly. Our average check in 2001 of $6.37 is comparable to
the average check in 2001 of $6.19 of Panera Bread Company, a
relevant fast casual competitor, as reported in its 2001 annual
report on Form 10-K filed with the SEC.
We focus our marketing efforts on building brand
awareness, increasing customer frequency and growing sales per
visit. We believe awareness of the Cosí brand is primarily
achieved through strong site location, word of mouth and public
relations, as well as leveraging our catering capabilities to
build corporate sales and support key marketing events for our
brand. We have been featured or mentioned in over one thousand
print publications including The Wall Street Journal,
The New York Times and The Washington Post.
Additionally, we have won Time Out New York's award for New
York's Best Sandwich, "Hot Concept" by
Nation's Restaurant News and "Premier Concepts of
Tomorrow" by Restaurant Hospitality Magazine.
We seek to maintain a pipeline of new menu
segments and products, which are systematically introduced onto
our menu in order to keep our product offerings relevant to
consumers in each daypart. Our new menu introductions build on
the successful Cosí platform of proprietary bread and
coffee products offered across multiple dayparts. Successful
introductions like Cosí
Squagels®
,
Cosí-dillas
TM
and
Warm n' Cosí
Melts
TM
have enabled us to maintain strong
consumer interest.
Purchasing
We have relationships with some of the
country's leading food and paper providers to provide our
restaurants with high quality proprietary food items at
competitive prices. We source and negotiate prices directly with
these suppliers. Cosí does not utilize a commissary system
and thus our expansion is not restricted by geographic proximity
to commissary kitchens. Our inventory control system allows each
restaurant to place orders electronically with our master
distributor and then transmit the invoice electronically to our
accounts payable system. Our scalable system eliminates
duplicate work, and we believe gives our management tight
control of costs while ensuring quality and consistency across
all restaurants.
Our primary suppliers and master distributor have
parallel facilities and systems to minimize the risk of any
disruption of our supply chain.
Competition
The restaurant industry is intensely competitive.
Cosí competes with respect to taste, quality and price of
product offered, customer service, atmosphere, location and
overall guest experience. Our competitors change with each of
the five dayparts, ranging from coffee bars and bakery cafes to
quick service restaurants and casual dining chains. We also
compete with many other restaurants for site locations and
restaurant employees. Although we believe that we compete
favorably with respect to each of our dayparts, many of our
competitors are well established national regional or local
chains, and some have substantially greater financial and other
resources than we do.
Intellectual Property
We have the following US Trademark registrations:
"COSÍ," "Totally Toasted Almond Mocha,"
"Mocha Kiss," "Squagels,"
"Xando," our sun and moon logo,
"Wake Up Call
to Last Call,"
"Symphony Blend,"
"King of Hearts Blend,"
"Xandwich,"
"Generation XO,"
and
"Screamers."
We have US Trademark
applications pending for: "Cosí Downtown,"
"Warm n' Cosí Melts" and
"Cosí Corners,"
and "Arctic" is
an unregistered trademark.
We have registered the trademark
"COSÍ" in seven foreign jurisdictions with
respect to goods and services. We also have applications pending
for registration for the trademark "COSÍ" in four
other foreign jurisdictions.
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Government Regulation
Our restaurants are subject to regulation by
federal agencies and to licensing and regulation by state and
local health, sanitation, building, zoning, safety, fire and
other departments relating to the development and operation of
restaurants. These regulations include matters relating to
environmental, building, construction and zoning requirements
and the preparation and sale of food and alcoholic beverages.
Our facilities are licensed and subject to regulation under
state and local fire, health and safety codes.
Many of our restaurants are required to obtain a
license to sell alcoholic beverages on the premises from a state
authority and, in certain locations, county and/or municipal
authorities. Typically, licenses must be renewed annually and
may be revoked or suspended for cause at any time. Alcoholic
beverage control regulations relate to numerous aspects of the
daily operations of each of our restaurants, including minimum
age of patrons and employees, hours of operation, advertising,
wholesale purchasing, inventory control and handling, and
storage and dispensing of alcoholic beverages. We have not
encountered any material problems relating to alcoholic beverage
licenses to date. The failure to receive or retain a liquor
license in a particular location could adversely affect that
restaurant and our ability to obtain such a license elsewhere.
We are subject to "dram shop" statutes
in the states in which restaurants are located. These statutes
generally provide a person injured by an intoxicated person the
right to recover damages from an establishment that wrongfully
served alcoholic beverages to the intoxicated individual. We
carry liquor liability coverage as part of our existing
comprehensive general liability insurance, which we believe is
consistent with coverage carried by other entities in the
restaurant industry. Although we are covered by insurance, a
judgment against us under a dram-shop statute in excess of our
liability coverage could have a material adverse effect on us.
Our operations are also subject to federal and
state laws governing such matters as wages, working conditions,
citizenship requirements and overtime. Some states have set
minimum wage requirements higher than the federal level.
Significant numbers of hourly personnel at our restaurants are
paid at rates related to the federal minimum wage and,
accordingly, increases in the minimum wage will increase labor
costs. We are also subject to the Americans With Disability Act
of 1990, which, among other things, prohibits discrimination on
the basis of disability in public accommodations and employment.
We are required to comply with the Americans with Disabilities
Act and regulations relating to accommodating the needs of the
disabled in connection with the construction of new facilities
and with significant renovations of existing facilities.
Legal Proceedings
From time to time, we are a defendant in
litigation arising in the ordinary course of our business,
including claims resulting from "slip and fall"
accidents, claims under federal and state laws governing access
to public accommodations, employment related claims and claims
from guests alleging illness, injury or other food quality,
health or operational concerns. To date, none of such
litigation, some of which is covered by insurance, has had a
material effect on us.
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MANAGEMENT
Executive Officers and Directors
The following contains information concerning our
directors and executive officers:
Name
Age
Position
Andy Stenzler
34
Chairman and Chief Executive Officer
Jay Wainwright
31
President and Director
Nick Marsh
33
Chief Operating Officer and Director
Kenneth S. Betuker
49
Chief Financial Officer
David Orwasher
42
Chief Development Officer
Jamie Mattikow
38
Vice President of Marketing
Gilbert Melott
38
Vice President of People
Shep Wainwright
29
Vice President of Real Estate
James M. Riley, Jr.
38
Vice President of Store Development
Charles Gray
30
Vice President of Information Systems
Terry Diamond
63
Director
Creed L. Ford, III
49
Director
Eric Gleacher
62
Director
D. Ian McKinnon
35
Director
Jeffrey M. Stork
46
Director
Greg Woolley
28
Director
Andy Stenzler, Chairman and Chief Executive
Officer.
Mr. Stenzler was a
founder of our predecessor company, Xando Coffee and Bar in
1994, and was most recently Chairman and Co-Chief Executive
Officer of that company prior to its merger with Cosí
Sandwich Bar, Inc. in 1999. Mr. Stenzler currently serves
as Chairman and Chief Executive Officer. Mr. Stenzler was
named '40 under 40' by Crain's New York
Business and listed '35 Under 35' by New
York Magazine. The Resident Publications' recognized
Mr. Stenzler as one of the 'Big 100' in
their story on the 100 most influential New Yorkers.
Additionally, he was featured in Smart Money Magazine and on the
cover of Entrepreneur Magazine. In 2001, Mr. Stenzler was
named a "Concept of Tomorrow" Visionary by Restaurant
Hospitality magazine. He received a Bachelor of Engineering
degree from the University of Michigan at Ann Arbor in 1990 and
a Masters Degree in Business Administration in Finance and
International Business from the Stern School of Business at New
York University in 1994.
Jay Wainwright, President and
Director.
Mr. Wainwright, a
founder of Cosí Sandwich Bar, Inc., served as Chairman and
Chief Executive Officer of that entity from its inception in
1996 until its merger with Xando, Incorporated in 1999.
Mr. Wainwright currently serves as President.
Mr. Wainwright received a Bachelor of Arts degree from
Hamilton College. Mr. Wainwright is the brother of Shep
Wainwright and the nephew of Eric Gleacher.
Nick Marsh, Chief Operating Officer and
Director.
Mr. Marsh, a founder of
Xando Coffee and Bar, served as President of that entity from
its incorporation in 1994 until the merger with Cosí
Sandwich Bar, Inc. in 1999. Mr. Marsh currently serves as
Chief Operations Officer. Prior to founding Xando Coffee and
Bar, Mr. Marsh was a management consultant with the
strategy firm of Marakon Associates and was Vice President of
Mergers and Acquisitions for Shawmut Bank in Hartford,
Connecticut, for two years. Mr. Marsh graduated from
Princeton University,
cum laude,
in 1990 with a Bachelor
of Arts degree.
Kenneth S. Betuker, Chief Financial
Officer.
Mr. Betuker has served
as Chief Financial Officer of Cosí since May 2000. Prior to
joining Cosí, Mr. Betuker was the Chief Financial
Officer at Noodle Kidoodle, Inc., from 1996 to May 2000, and the
Chief Financial and Administrative Officer of First National
Supermarkets, Inc. (a subsidiary of Royal Ahold, NV), from
1986 to 1996. Mr. Betuker graduated from Cleveland State
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University,
cum laude,
with a Bachelor of
Science degree, and was awarded a Masters Degree in Business
Administration, with Highest Distinction, from Babson College.
David Orwasher, Chief Development Officer.
Mr. Orwasher joined Cosí as
Chief Development Officer in December 2001. From 1996 to
2000, Mr. Orwasher served as Vice President of Development
and Asset Management for the Eastern U.S. for Starbucks
Corporation where he helped build the real estate development
and asset management organization and helped open over four
hundred stores in numerous markets in the Eastern U.S.
Prior to joining Cosí, from 2000 to 2001, he served as the
Chief Development Officer for Zoots, a dry cleaning company
founded by Tom Stemberg and Todd Krasnow of Staples, Inc. Before
joining Starbucks, Mr. Orwasher spent five years as
Associate Counsel and Director of Leasing and Brokerage for the
Breslin Realty Development Corp., in addition to spending
approximately five years with the real estate group at Marriott
International, Inc. and two years with the Hershey Foods
Corporation, Friendly Restaurant Division. Mr. Orwasher is
a graduate of Vassar College, receiving a Bachelor of Arts
degree in Environmental Science, and earned he a Juris Doctor
degree from Pace University. He is a licensed attorney and is
admitted to practice in the states of New York and Connecticut.
Jamie Mattikow, Vice President of
Marketing.
Mr. Mattikow has
served as our Vice President of Marketing since May 2001. Prior
to joining Cosí, Mr. Mattikow was Sr. Vice
President of Marketing for Seagram Beverage Company, a division
of Joseph E. Seagram and Sons Inc., from May 1998 to
April 2001. From January 1992 to April 1998, he was with Kraft
Foods, Inc., where he held positions ranging from Brand Manager
and Marketing Director, to Category Business Director.
Mr. Mattikow received a Masters Degree in Business
Administration from Columbia University School of Business with
a dual concentration in Finance and Marketing. He also received
a Bachelor of Arts degree in Economics and Political Science
from Lafayette College in 1986.
Gilbert Melott, Vice President of
People.
Mr. Melott has served as
our Vice President of Human Resources and Training since
December 2001. From December 1995 to
November 2001, he was with Bennigan's, as Executive
Director of Training and as Vice President of People, Process
and Education. Prior to joining Bennigan's, Mr. Melott
was a Division Director of Human Resources at Sheraton Holding
Corporation in Boston and spent four years as Divisional
Training and Development Manager at TGI Friday's.
Mr. Melott is a nationally recognized expert in
generational workplace studies and recipient of Industry of
Choice awards for achievement in training and education.
Mr. Melott received a Bachelors of Science degree in
Marketing and Organizational Communication from Fordham
University in 1985.
Shep Wainwright, Vice President of Real
Estate.
Mr. Wainwright, a founder
of Cosí Sandwich Bar, Inc., served as President of that
entity from its inception in 1996 until the merger with Xando,
Incorporated in 1999. Mr. Wainwright currently serves as
Vice President of Real Estate. Mr. Wainwright graduated
from Hamilton College,
cum laude,
in 1995 with a Bachelor
of Arts degree. Mr. Wainwright is the brother of Jay
Wainwright and the nephew of Eric Gleacher.
James M. Riley, Jr., Vice President of
Store Development.
Mr. Riley has
served as our Vice President of Store Development since May
2000. Prior to joining Cosí, he was Chief Development
Officer for Corners, Inc. from January 1998 to April 2000.
Prior to joining Corners, Mr. Riley was with Boston
Chicken, Inc. and Einstein Bros. Bagels, where he participated
in opening over 200 locations. Mr. Riley has a
Bachelors degree in Construction Management and Architectural
Engineering from Wentworth Institute of Technology in Boston,
Massachusetts.
Charles Gray, Vice President of Information
Systems.
Mr. Gray currently
serves as our Vice President of Information Systems, and has
been with Cosí since September 1998. Mr. Gray is a ten
year veteran in the food service industry having served as
Director of Training for RANCH *1, Inc. from 1996 to 1998,
Director of Operation Services for Einstein Bros. Bagels from
1995 to 1996, and Assistant Director of Training for Boston
Market Corporation from 1992 to 1995. Mr. Gray is a
graduate of the State University of New York at Albany.
Terry Diamond,
Director.
Mr. Diamond, a director
since April 1998, has served as Chairman of Talon Asset
Management, which manages individual investment advisory
accounts and is the sub-agent with
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investment responsibility for the ABN Amro Talon
Fund, since 1996. Mr. Diamond is also the Managing Member
of Talon Opportunity Partners LLC, as well as the General
Partner of Talon Opportunity Partners, L.P.
Mr. Diamond has acted as a consultant and board member to
many private, public, and philanthropic organizations.
Currently, he is a Board Member of Venetec International, Inc.
and PlayNetwork, Inc. Mr. Diamond received a Bachelor of
Science degree from the University of Michigan in 1960 and a
Juris Doctor degree from the University of Chicago Law School
in 1963.
Creed L. Ford, III,
Director.
Mr. Ford has been a
director since March 1997. Mr. Ford has been Chairman and
Co-Chief Executive Officer of Fired Up, Inc., the parent company
of Johnny Carino's Country Italian restaurants and
Gumbo's Louisiana Style Café since 1997, and the
President of Ford Restaurant Group, a Chili's
Grill & Bar franchisee, since 1997. From 1976 through
1997, Mr. Ford served in various capacities at Brinker
International, Inc., including Chief Operating Officer. As COO
and Director, Mr. Ford oversaw all operations at Brinker
for all of its restaurant concepts. Mr. Ford serves on the
boards of Rudy's BBQ, Texas Restaurant Association
Education Foundation, Texas A&M Center of
Entrepreneurship and Fired Up, Inc.
Eric Gleacher,
Director.
Mr. Gleacher has been a
director since 1996 and has been Chairman of Gleacher
Partners LLC since 1990. Mr. Gleacher founded the
M&A department at Lehman Brothers Inc. in 1978 and headed
Global Mergers and Acquisitions at Morgan Stanley from 1985 to
1990. He currently serves on the boards of the University of
Chicago and New York University and is Secretary of the United
States Golf Association. Mr. Gleacher received a Masters of
Business Administration from the University of Chicago and a
Bachelor of Arts from Northwestern University and served as a
U.S. Marine Infantry Officer in the 1960s.
Mr. Gleacher is the uncle of Jay and Shep Wainwright.
D. Ian McKinnon,
Director.
Mr. McKinnon has been a
director since 2000, and is a Partner of Ziff Brothers
Investments, L.L.C. He is also the President of ZBI
Equities, L.L.C., ZBI's domestic public equity
investment adviser with several billion dollars under
management. He currently also serves on the Board of Trustees of
Occidental College. Mr. McKinnon received a Masters Degree
in Business Administration from the Harvard Business School,
with High Distinction as a George F. Baker Scholar. He
graduated
summa cum laude
and Phi Beta Kappa from
Occidental College, with a Bachelor of Arts degree in Public
Policy.
Jeffrey M. Stork,
Director.
Mr. Stork has been a
director since March 1995. Mr. Stork was most recently
President and Chief Executive Officer of The StonCor Group
from 1983 to 2000. Currently, Mr. Stork is the Managing
Partner of Forms+Surfaces, LLC, a national architectural
products manufacturer. He currently serves on the boards of
Sequel Genetics, Inc. and Forms+Surfaces LLC.
Mr. Stork earned a Bachelor of Science degree in Chemical
Engineering from Lehigh University.
Greg Woolley,
Director.
Mr. Woolley has been a
director since June 2001 and is Chief Executive Officer and
a Director of the LJCB Investment Group. LJCB is one of
Australia's leading private investment houses. Prior to
this, Mr. Woolley practiced mergers and acquisitions with
Macquarie Bank Limited. Mr. Woolley currently serves on the
Boards of Issues and Images, an Australian marketing
communications company, and the Australian Museum of
Contemporary Art. Mr. Woolley received a Bachelor of
Commerce degree and a Bachelor of Law degree, with Honours, from
the University of Tasmania.
Board of Directors
The board of directors currently consists of nine
directors, three of whom are employed by Cosí. Our
certificate of incorporation provides for our board to be
divided into three classes of directors serving staggered three
year terms. The terms of office of the directors will expire as
follows: Andy Stenzler (Class I director) in 2005; Jay
Wainwright (Class II director) in 2004; Nick Marsh
(Class III director) in 2003; Terry Diamond (Class III
director) in 2003; Creed Ford (Class II director) in 2004;
Eric Gleacher (Class II director) in 2004; D. Ian
McKinnon (Class I director) in 2005; Jeffrey Stork
(Class I director) in 2005; and Greg Woolley
(Class III director) in 2003.
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Board Committees
Compensation
Committee.
The compensation committee
of our board of directors recommends, reviews and oversees the
salaries, benefits and option plans for our employees,
consultants and other individuals compensated by us. The members
of the compensation committee are Ian McKinnon, Jeffrey Stork
and Eric Gleacher.
Audit Committee.
The
audit committee of our board of directors reviews, acts on and
reports to our board with respect to various auditing and
accounting matters, including the recommendation of our
auditors, the scope of our annual audits, fees to be paid to the
auditors, evaluating the performance of our independent auditors
and our accounting practices. The members of our audit committee
are Jeffrey Stork, Creed Ford and Greg Woolley.
Nominating
Committee.
The nominating committee of
our board of directors recommends to our board those individuals
to be nominated as directors. The members of our nominating
committee are Andy Stenzler, Creed Ford and Jeffrey Stork.
Compensation of Directors
We reimburse each director for travel and other
related expenses incurred in attending meetings of the board of
directors and committee meetings.
Compensation Committee Interlocks and Insider
Participation
The compensation committee of our board of
directors is comprised of Ian McKinnon, Jeffrey Stork and Eric
Gleacher. None of these individuals was at any time during the
2001 fiscal year or at any other time an officer or employee of
Cosí. No executive officer of Cosí serves as a member
of the board of directors or compensation committee of any
entity which has one or more executive officers serving as a
member of Cosí's board of directors or compensation
committee.
Indemnification and Limitation of Director and
Officer Liability
Pursuant to provisions of the Delaware General
Corporation Law, we have adopted provisions in our by-laws and
our certificate of incorporation, which eliminate or limit the
personal liability of directors to Cosí and its
shareholders for monetary damages for breach of fiduciary duty.
Our by-laws also allow us to indemnify our officers and someone
serving at our request as a director, officer, employee,
fiduciary or agent of another corporation or of a partnership,
joint venture, trust or other enterprise to the fullest extent
permitted by Delaware law.
Executive Compensation
The following table sets forth information
regarding the total compensation earned during 2001 by our
Chairman and Chief Executive Officer and each of our other four
most highly compensated executive officers.
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"Other annual compensation" includes
perquisites and other personal benefits paid to each of the
officers named below.
Summary Executive Compensation Table
Long Term
Compensation
Awards
Annual Compensation
Securities
Other Annual
Underlying
All Other
Officer
Year
Salary
Bonus
Compensation
Options
Compensation (a)
Andy Stenzler
2001
$
137,500
$
19,342
$
18,000
255,117
—
Chairman and Chief Executive Officer
Kenneth S. Betuker
2001
$
215,000
$
9,383
—
174,063
—
Chief Financial Officer
James M. Riley, Jr.
2001
$
185,000
$
5,578
—
119,167
—
Vice President, Store Development
Jay Wainwright
2001
$
137,500
$
17,689
$
18,000
125,851
—
President
Nick Marsh
2001
$
137,500
$
19,342
$
18,000
255,117
—
Chief Operating Officer
(a)
The value of perquisites and benefits for each
	named officer does not exceed the lesser of $50,000 or 10% of
	total annual salary and bonus.
Stock Options
Amended and
Restated Cosí, Inc. Stock Incentive Plan
A total of 8,900,000 shares of our common stock
have been reserved for issuance under the Amended and Restated
Cosí, Inc. Stock Incentive Plan. Shares subject to any
unexercised options granted under the plan, which have expired
or terminated become available for issuance again under the
plan. The plan provides for discretionary grants of incentive
stock options, nonqualified stock options and stock appreciation
rights, or SARs, to our employees and consultants. The exercise
price per share for an incentive stock option may not be less
than 100% of the fair market value of a share of our common
stock on the grant date. The exercise price per share for a
nonqualified stock option may not be less than 85% of the fair
market value of a share of our common stock on the grant date.
The exercise price per share for an incentive stock option
granted to a person owning stock possessing more than 10% of the
total combined voting power of all classes of our stock may not
be less than 110% of the fair market value of a share of our
common stock on the grant date. The aggregate fair market value,
determined on the date of grant, of the shares with respect to
which incentive stock options are exercisable for the first time
during any calendar year under all Cosí plans may not
exceed $100,000. Our compensation committee has full discretion
to administer and interpret the plan, to adopt such rules,
regulations and procedures as it deems necessary or advisable,
and to determine the persons eligible to receive options or
SARs, the time or times at which the options or SARs may be
exercised, and whether all of the options or SARs may be
exercised at one time or in increments.
We may elect at any time to cancel any option or
SAR granted under the plan, and, in the case of an option, pay
the holder of such option the excess of the fair market value of
the shares subject to the option as of the date of such election
to cancel over the exercise price set forth in the particular
grant agreement, or, in the case of an SAR, the value of the SAR
as of the date of such election. We also may elect at any time
to convert any option granted under the plan to an SAR.
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1996
Cosí Sandwich Bar, Inc. Incentive Stock Option
Plan
As of April 1, 2002, options to purchase
approximately 480,000 shares of our common stock are outstanding
under the Cosí Sandwich Bar, Inc. Incentive Stock Plan.
Shares subject to any unexercised options granted under the
plan, which have expired or terminated become available for
issuance again under the plan. No stock options may be granted
under the plan after October 1, 2001. The Cosí
Sandwich Bar, Inc. Incentive Stock Plan provides for
discretionary grants of incentive stock options to certain key
employees. The exercise price per share for an option may not be
less than 100% of the fair market value of a share of our common
stock on the grant date. The exercise price per share for an
incentive stock option granted to a person owning stock
possessing more than 10% of the total combined voting power of
all classes of our stock may not be less than 110% of the fair
market value of a share of our common stock on the grant date.
To the extent that the aggregate fair market value of stock with
respect to which incentive stock options are exercisable for the
first time by an optionee during any calendar year (under this
plan and all of our other incentive stock option plans or our
subsidiaries) exceeds $100,000, such incentive stock option
shall be treated as options which are not incentive stock
options. In the event an optionee's employment is
terminated by us, other than for cause, such optionee may
exercise any exercisable options under the plan for a period of
30 days. In the event an optionee's employment is
terminated by reason of death, such optionee may exercise any
exercisable options under the plan for a period of
6 months. In the event an optionee's employment is
terminated by us for cause, all options held by such optionee
are immediately cancelled and we may require such optionee to
sell to us, at a sales price equal to the lesser of the exercise
price and the fair market value of the underlying shares, all
shares owned by the optionee which were acquired pursuant to
this plan. The Cosí Sandwich Bar, Inc. Incentive Stock
Option Plan is administered and interpreted by the board of
directors.
Cosí
Non-Employee Director Stock Option Plan
A total of 250,000 shares of our common stock
have been reserved for issuance under the Cosí Non-Employee
Director Stock Option Plan. Shares subject to any unexercised
options granted under the plan, which have expired or terminated
become available for issuance again under the plan. The
Cosí Non-Employee Director Stock Option Plan provides for
discretionary grants of non qualified stock options and SARs to
our non-employee directors. The board of directors has full to
discretion to administer and interpret the plan and full
discretionary authority to determine the non-employee directors
eligible to receive options or SARs, the time or times at which
the options or SARs may be exercised, and whether all of the
options or SARs may be exercised at one time or in increments;
provided, however, the purchase price of shares subject to a
non-qualified stock option shall not be less than 85% of the
fair market value of a share of Cosí common stock on the
grant date. Each optionee under the plan may exercise any
unexpired options or SARs following a change in control of
Cosí, a sale of substantially all of the assets of
Cosí, or shareholder approval of the dissolution of
Cosí.
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The following table shows information concerning
stock options held by each of the officers named below as of
April 1, 2002.
Option Grants in Last Fiscal Year
Potential Realizable
Individual Grants
Value at Assumed
Annual Rates of Stock
Number of
% of Total
Price Appreciation for
Securities
Options Granted
Exercise or
Option Term
Underlying
to Employees in
Base Price
Name
Options Granted
Fiscal Year
($/Sh)
Expiration Date
5%
10%
Andy Stenzler
204,094
11.6
%
$
7.00
12/31/11
870,954
2,191,788
Chairman and Chief Executive Officer
Kenneth S. Betuker
124,063
7.9
%
$
7.00
12/31/11
529,428
1,332,326
Chief Financial Officer
James M. Riley, Jr.
39,167
5.4
%
$
7.00
7/3/11
156,593
388,545
Vice President
Store Development
Jay Wainwright
74,828
5.7
%
$
7.00
12/31/11
319,322
803,586
President
Nick Marsh
204,094
11.6
%
$
7.00
12/31/11
870,954
2,191,788
Chief Operating Officer
Fiscal Year End Option Values
Common Shares
Underlying
Value of Unexercised
Unexercised Options at
In-the-Money Options at
Number of
Fiscal Year End
Fiscal Year End
Shares Acquired
Officer
on Exercise
Value Realized
Exercisable
Unexercisable
Exercisable
Unexercisable
Andy Stenzler
—
—
169,611
157,236
Chairman and Chief Executive Officer
Kenneth S. Betuker
—
—
10,000
214,063
Chief Financial Officer
James M. Riley
—
—
29,666
88,998
Vice President Store Development
Jay Wainwright
—
—
646,175
127,071
President
Nick Marsh
—
—
169,611
157,236
Chief Operating Officer
Employee
Stock Purchase Plan
Our Employee Stock Purchase Plan will become
effective July 1, 2002. The purpose of the plan is to
provide employees with an opportunity to purchase our shares
through accumulated payroll deductions. The plan provides for
the grant of stock options to eligible employees. Each employee
will be eligible to participate in the plan commencing on the
first day of the offering period (as described below) occurring
on or after the date on which the employee has been employed by
us for six months. The plan is administered by our compensation
committee.
A total of 500,000 shares of common stock are
authorized for issuance under the plan. Any eligible employee
may elect to participate in the plan by authorizing our
compensation committee to make payroll deductions to pay the
exercise price of an option at the time and in the manner
prescribed by our compensation committee. The employee may
designate the amount of the payroll deduction in whole
percentages, up to 10% of the employee's compensation for
each payroll period in an offering period.
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In no event will an employee be granted an option
under the plan that would permit an employee to purchase shares
of our common stock under the plan, to the extent that,
immediately after the grant, such employee (i) would own
common stock and/or hold options to purchase our common stock
possessing 5% or more of the total combined voting power or
value of all classes of our stock, or (ii) has the right to
purchase our common stock during any calendar year having a fair
market value in excess of $25,000. Options are granted at two
six-month offering periods in each calendar year. The date of
grant and the date of exercise for the first option period under
the plan in a given calendar year will be January 1 and
June 30, respectively, and the date of grant and date of
exercise for the second option period will be July 1 and
December 31, respectively. The first offering period of the
plan will conclude on December 31, 2002. The price of stock
purchased under the plan will be an amount equal to the lesser
of 85% of the fair market value of the stock on the date of
purchase or on the date of commencement of the applicable
offering period.
Executive Contracts, Change-In-Control and
Other Arrangements
Employment
contracts
We have entered into employment agreements with
Messrs. Andy Stenzler, Jay Wainwright, Nick Marsh, Shep
Wainwright and David Orwasher.
Andy Stenzler, Jay Wainwright, Nick Marsh and
Shep Wainwright.
The term of each
agreement is for three years with each agreement expiring in
2005, subject to automatic one year extensions, unless we give
such executive at least 180 days prior written notice of
non-extension.
The agreements provide that we will pay
Messrs. Stenzler, Jay Wainwright, Marsh and Shep Wainwright
annual base salaries of $225,000, $175,000, $175,000 and
$137,500, respectively, with annual increases as provided in the
respective agreements. Each executive will be eligible to
receive an annual cash bonus, with a target bonus potential
equal to 50% of his respective base salary. Additionally, each
executive will be granted annual options to purchase our common
stock in accordance with our current compensation plan for
senior management, with initial grant targets of 86,400 shares
for each of Messrs. Stenzler, Jay Wainwright, Marsh, and
Shep Wainwright.
The agreements may be terminated by Cosí for
"good cause" or by the executive voluntarily, and will
automatically terminate upon such executive's death,
disability or retirement. If we do not extend an
executive's employment period beyond the third anniversary
of the commencement date, or if the agreement is terminated by
us without good cause, or if an executive terminates his
employment for good reason, we must pay the executive
(i) his then current annual base salary and, unless we do
not extend the executive's employment period beyond the
third anniversary of the commencement date, non-incentive
compensation and provide the executive with his then current
benefits through the greater of two years or the date such
executive's employment agreement expires, and (ii) an
amount equal to two times the cash bonus calculated at the
greater of 50% of his then current annual base salary or the
actual bonus earned by the executive for the directly preceding
fiscal year, payable in bi-weekly installments over such period.
All options held by the executive become 100% vested as of the
date of termination. In addition, upon a change of control all
outstanding stock options held by the executive shall
automatically become fully vested, regardless of whether the
executive terminates his employment.
If the executive's employment agreement is
terminated as a result of his death, disability or retirement,
we are obligated to pay the executive (or his estate, as
applicable) (i) his then current annual base salary,
non-incentive compensation and employee benefits for a period of
one year, and (ii) an amount equal to the executive's
cash bonus calculated at the greater of 50% of his then current
annual base salary or the actual bonus earned by the executive
for the directly preceding fiscal year, payable in equal each
payday over such one year period. All options held by the
executive become 100% vested upon the executive's death,
retirement or disability.
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If any of the payments provided for in the
executive's employment agreement would be subject to an
excise tax under the Internal Revenue Code, we are required to
pay the executive the amount necessary to fund the payment of
any excise tax the executive is required to pay as well as all
income taxes imposed on such additional payment and any interest
or penalties relating to such payments. However, if a reduction
of $15,000 or less of the amount paid to the executive would
avoid the imposition of any excise tax, then the amount paid to
the executive will be reduced by the amount necessary to avoid
such imposition.
In the event the executive's employment is
terminated for good cause or he voluntarily terminates
employment, such executive will be subject to a non-compete
agreement for a period of 24 months following the
termination. During this 24 month period, the executive
will not directly or indirectly, personally or with other
employees, agents or otherwise, or on behalf of any other
person, firm, or corporation, engage in any restaurant, bar,
coffee shop or similar business within certain operating
criteria and certain defined geographical regions.
David Orwasher.
The
term of the agreement is for three years expiring in 2005.
Mr. Orwasher will receive a salary of $250,000 for fiscal
year 2002, with annual increases as provided in the agreement.
Mr. Orwasher is also entitled to an annual bonus of not
less than 20% of his base salary. Mr. Orwasher's
annual cash bonus amount will increase based upon specific
financial performance criteria for restaurants opened at real
estate locations leased or acquired by Cosí during
Mr. Orwasher's term of employment.
After the second anniversary of
Mr. Orwasher's employment, he is entitled to receive
annual stock option grants in the minimum amount of 62,500
shares, with annual increases as provided in the agreement. If
Mr. Orwasher terminates his employment for "good
reason" or we terminate his employment without
"cause," then all options granted to Mr. Orwasher
become 100% vested as of the date of termination. Additionally,
Mr. Orwasher will be entitled to receive the following:
(i) any bonus payable pursuant to the agreement when and as
it becomes due, (ii) a severance payment equal to one
year's gross salary and (iii) continuation of employee
benefits for a period of one year. All stock options granted to
Mr. Orwasher become 100% vested upon the sale of all or
substantially all of the assets or transfer of control of
Cosí.
If Mr. Orwasher's employment agreement
is terminated by us for "cause" all stock options
granted to Mr. Orwasher pursuant to the employment
agreement will terminate immediately. If Mr. Orwasher
resigns (other than for "good reason") or we terminate
Mr. Orwasher for "cause," death or disability,
Mr. Orwasher will be entitled to receive all salary and
bonuses due and owing to him to the date of termination, and, in
the event of death or disability, any bonus payable pursuant to
the employment agreement when and as it comes due.
Mr. Orwasher has the right to terminate his
employment for "good reason" if there is a change of
control or the business plan is substantially altered.
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PRINCIPAL SHAREHOLDERS
The following table presents information
regarding the beneficial ownership of our common stock as of
April 1, 2002 by: (1) each person who beneficially
owns more than 5% of our common stock; (2) each of our
directors and the executive officers named in the summary
compensation table contained elsewhere in this prospectus; and
(3) all current executive officers and directors as a
group. Beneficial ownership is determined under the rules of the
SEC. These rules deem common stock subject to options or
warrants currently exercisable, or exercisable within
60 days, to be outstanding for purposes of computing the
percentage ownership of the person holding the options or of a
group of which the person is a member, but they do not deem such
stock to be outstanding for purposes of computing the percentage
ownership of any other person or group. To our knowledge, except
under applicable community property laws or as otherwise
indicated, the persons named in the table have sole voting and
sole investment control with regard to all shares beneficially
owned. Except as otherwise indicated, the address for each of
the named individuals is c/o Cosí, Inc., 242 West 36th
Street, New York, New York 10018.
In the following table, percentage ownership for
each shareholder before this offering is based on 19,574,522.57
shares of common stock outstanding as of April 1, 2002
which amount includes (i) 7,951,364.57 shares of common
stock outstanding as of April 1, 2002, (ii) 2,005,862
shares of common stock issuable upon conversion of Series A
preferred stock (which will be converted effective upon
consummation of this offering), (iii) 9,312,705 shares of
common stock issuable upon conversion of Series C preferred
stock (which will be converted effective upon consummation of
this offering), (iv) 256,057 shares of common stock
issuable upon exercise of outstanding warrants at an exercise
price of $.01 per share, (v) 44,115 shares of common stock
issuable upon exercise of outstanding warrants at an exercise
price of $8.50 per share (which will be exercised upon
consummation of this offering), and (vi) 4,419 shares of
common stock issuable upon exercise of outstanding warrants at
an exercise price of $9.50 per share, which will be exercised
upon consummation of this offering. Shares outstanding at
April 1, 2002 excludes 2,932,891 shares of our common stock
issuable upon exercise of outstanding options currently
exercisable or exercisable within 60 days at a weighted
average price of $5.18 per share. The percentage ownership for
each shareholder after this offering also gives effect to the
issuance
of           shares
of our common stock in this offering.
Shares Beneficially Owned
Percent Owned
Percent Owned
prior to
after this
Name and Address
Number
this Offering(1)
Offering
Andy Stenzler
786,903.0
(2)
4.0
%
Jay Wainwright
817,067.3
(3)
4.0
%
Nick Marsh
786,903.0
(4)
4.0
%
Kenneth S. Betuker
10,000.0
(5)
*
James M. Riley, Jr.
29,666.0
(6)
*
Terry Diamond
13,071
(7)
*
Creed L. Ford, III
470,590.0
2.4
%
Eric Gleacher
965,711.3
(8)
4.9
%
D. Ian McKinnon
—
—
Jeffrey M. Stork
1,247,177.0
(9)
6.9
%
Greg Woolley
—
—
LJCB Nominees Pty Ltd.
1,444,364.0
(10)
7.5
%
Kafig Pty Ltd
161 Collins Street Melbourne, Australia 3000
Ziff Asset Management, L.P.
3,041,863.0
(11)
15.5
%
Ziff Brothers Investments
153 E. 53rd Street NY, NY 10022
All directors and executive officers as a
	group
(16 persons)
5,228,721.6
(12)
25.4
%
*
Less than one percent.
(1)
With respect to each person, percentage ownership
	is calculated by dividing the number of shares beneficially
	owned by such person by the sum of the number of outstanding
	shares at such date and the
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number of shares such person has the right to
	acquire upon exercise of options currently exercisable, or
	exercisable within 60 days.
(2)
Includes (i) 7,143 shares of common stock
	issuable upon conversion of Series A preferred stock (which
	will be converted effective upon consummation of this offering),
	(ii) 549 shares of common stock issuable upon exercise of
	outstanding warrants at an exercise price of $.01 per share
	(which will be exercised effective upon consummation of this
	offering), and (iii) 169,611 shares of common stock
	issuable upon exercise of outstanding options at a weighted
	average price of $7.00 per share.
(3)
Includes 646,175 shares of common stock issuable
	upon exercise of outstanding options at a weighted average price
	of $3.58 per share.
(4)
Includes (i) 7,143 shares of common stock
	issuable upon conversion of Series A preferred stock (which
	will be converted effective upon consummation of this offering),
	(ii) 549 shares of common stock issuable upon exercise of
	outstanding warrants at an exercise price of $.01 per share
	(which will be exercised effective upon consummation of this
	offering), and (iii) 169,611 shares of common stock
	issuable upon exercise of outstanding options at a weighted
	average price of $7.00 per share.
(5)
Includes 10,000 shares of common stock issuable
	upon exercise of outstanding options at a weighted average price
	of $7.00 per share.
(6)
Includes 29,666 shares of common stock issuable
	upon exercise of outstanding options at a weighted average price
	of $7.00 per share.
(7)
Includes (i) 7,143 shares of common stock
	issuable upon conversion of Series A preferred stock owned
	by Mr. Diamond's wife, (ii) 549 shares of common
	stock issuable upon exercise of outstanding warrants at an
	exercise price of $.01 per share owned by
	Mr. Diamond's wife, (iii) 3,622 shares of common
	stock issuable upon conversion of Series C preferred stock
	owned by his wife, and (iv) 1,757 shares of common stock
	issuable upon exercise of outstanding warrants at an exercise
	price of $.01 per share owned by the Diamond Family Foundation.
(8)
Includes (1) 244,153 shares of common stock
	issuable upon conversion of Series C preferred stock (which
	will be converted effective upon consummation of this offering)
	and (ii) 24,722.07 owned by Mr. Gleacher's wife,
	Anne.
(9)
Includes (i) 437,704 shares of common stock
	held by JDS Partners (Mr. Stork is a managing member of JDS
	Partners), (ii) 25,000 shares of common stock issuable upon
	conversion of Series A preferred stock and 50,000 shares of
	common stock issuable upon conversion of Series A preferred
	stock held by JDS Partners (which will be converted
	effective upon consummation of this offering), and
	(iii) 1,923 shares of common stock issuable upon exercise
	of outstanding warrants at an exercise price of $.01 per share
	(which will be exercised effective upon consummation of this
	offering), and 3,846.9 shares of common stock issuable upon
	exercise of outstanding warrants at an exercise price of $.01
	per share held by JDS Partners (which will be exercised
	effective upon consummation of this offering).
(10)
Includes 1,444,364 shares of common stock
	issuable upon conversion of Series A preferred stock (which
	will be converted effective upon consummation of this offering).
(11)
Includes 2,823,307 shares of common stock
	issuable upon conversion of Series C preferred stock (which
	will be converted effective upon consummation of this offering)
	and (ii) 87,853 shares of common stock issuable upon
	exercise of outstanding warrants at an exercise price of $.01
	per share.
(12)
These 16 persons include all directors and
	executive officers detailed in the "Management"
	section above. See notes 3, 4, 5, 6, 7, 8, and 9 above.
	Includes 9,440 shares of common stock issuable upon
	exercise of outstanding options held by Charles Gray at a
	weighted average exercise price of $7.00 per share.
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RELATED PARTY TRANSACTIONS
A member of Cadwalader, Wickersham &
Taft is the father of our President and our Vice President of
Real Estate. Cadwalader, Wickersham & Taft has acted as
our outside counsel since October 1999. In fiscal year
2001, the law firm received legal fees and reimbursement of
expenses from us in the amount of $70,825. We engage a public
relations firm that is partially owned by the wife of our Chief
Executive Officer. This firm provides us with public relations
services, for which we paid approximately $146,000 in fiscal
2001. Our Chairman and Chief Executive Officer and our Chief
Operating Officer each issued promissory notes to us in the
amount of $1,362,400, each due in 2005, which accrue interest at
an annual rate of 5.75%, in connection with the purchase of our
preferred shares in 1998.
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DESCRIPTION OF CAPITAL STOCK
Our certificate of incorporation authorizes the
issuance of up to 100,000,000 shares of common stock and
40,000,000 shares of preferred stock, 1,000,000 of which are
designated as Series D preferred stock, and 39,000,000
shares of which the rights and preferences may be established
from time to time by our board of directors. Upon completion of
this offering, based on the number of shares outstanding as of
April 1,
2002,            shares
of common stock
and            shares
of preferred stock will be outstanding. As of April 1,
2002, we had approximately 291 record shareholders.
Common Stock
Holders of common stock are entitled to one vote
for each share held on all matters submitted to a vote of
shareholders and do not have cumulative voting rights. Thus,
holders of a majority of the shares of common stock entitled to
vote in any election of directors may elect all of the directors
standing for election. Holders of common stock are entitled to
receive ratably any dividends that may be declared by our board
of directors out of funds legally available for dividends,
subject to any preferential dividend rights of outstanding
preferred stock. If we liquidate, dissolve or wind up, the
holders of common stock are entitled to receive ratably all of
our assets available after payment of all debts and other
liabilities, subject to the prior rights of any outstanding
preferred stock. Holders of common stock have no preemptive,
subscription, redemption or conversion rights or any rights to
share in any sinking fund. The rights, preferences and
privileges of the holders of common stock are subject to, and
may be adversely affected by, the rights of the holders of
shares of any series of preferred stock that we may designate
and issue in the future.
Preferred Stock
Our certificate of incorporation authorizes the
issuance of up to 40,000,000 shares of preferred stock from time
to time in one or more series and with terms of each series
stated in our board's resolutions providing for the
designation and issue of that series. Our certificate also
authorizes the board of directors to fix, state and express the
powers, rights, designations, preferences, qualifications,
limitations and restrictions, and dividend, voting, conversion
and redemption rights pertaining to each series of preferred
stock that we issue. Without seeking any shareholder approval,
our board of directors may issue preferred stock with voting and
other rights that could adversely affect the voting power of the
holders of our common stock and could have the effect of
delaying, deferring or preventing a change in control. Other
than the issuance of the series of preferred stock previously
authorized by the board of directors in connection with the
shareholder rights plan described below, we have no present
plans to issue any shares of preferred stock.
Registration Rights
We have granted registration rights to certain
holders of shares of our common stock under the terms of the
Amended and Restated Registration Agreement dated as of
March 30, 1999, by and among us and the shareholders named
in the agreement. Subject to certain exceptions, including our
right to defer a demand registration for a single period of up
to 90 days in a given year, these holders have the right to
require us to register their shares at our expense under the
circumstances described in that agreement. In addition, all
holders of shares with registration rights have the right to
piggyback on any registration for our account, subject to
certain limitations. Accordingly, in the event that we propose
to register additional shares of common stock under the
Securities Act, the holders of shares with registration rights
are entitled to receive notice of that registration and to
include their shares in the registration, subject to limitations
described in the agreement. All registration rights are subject
to conditions and limitations, among them our right to limit the
number of shares of common stock held by these security holders
to be included in the registration. We are generally required to
bear all of the expenses of all registrations (other than
underwriting discounts and commissions). Registration of the
shares of common stock held by security holders with
registration rights would result in these shares becoming freely
tradeable without restriction under the Securities Act
immediately upon effectiveness of such registration. In
connection with any registration under these provisions, we are
required to indemnify the holder participating in an offering
against civil liabilities under the Securities Act.
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Anti-Takeover Provisions of Our Certificate of
Incorporation, By-laws and Shareholder Rights Plan
General
The provisions of our certificate of
incorporation, by-laws and shareholder rights plan, and Delaware
statutory law described in this section may delay or make it
more difficult for someone to acquire us without the approval of
our board. These provisions could have the effect of
discouraging third parties from making acquisition proposals
although such proposals, if made, might be considered desirable
by a majority of our stockholders. These provisions may also
have the effect of making it more difficult for third parties to
cause the replacement of our current management without the
concurrence of our board.
Classified
Board of Directors
The certificate of incorporation provides for our
board (other than those directors elected solely by any series
of preferred stock created by resolution of our board) to be
divided into three classes of directors serving staggered three
year terms. As a result, approximately one-third of our board
will be elected each year. See "Management —
Directors".
We believe a classified board will help to assure
the continuity and stability of our board, and our business
strategies and policies as determined by our board, because a
majority of the directors at any given time will have prior
experience as our directors. This provision should also help to
ensure that our board, if confronted with an unsolicited
proposal from a third party that has acquired a block of our
voting stock, will have sufficient time to review the proposal
and appropriate alternatives and to seek the best available
result for all stockholders.
This provision could prevent a party who acquires
control of a majority of the outstanding voting stock from
obtaining control of our board until the second annual
stockholders' meeting following the date the acquiror
obtains the controlling stock interest, could have the effect of
discouraging a potential acquiror from making a tender offer or
otherwise attempting to obtain control of us and could thus
increase the likelihood that incumbent directors will retain
their positions.
Number of
Directors; Removal; Vacancies
Our certificate of incorporation and by-laws
provide that the number of directors shall not be less than 3
nor more than 15 and, except as may be provided in the terms of
any series of preferred stock created by resolutions of the
board, shall be determined from time to time exclusively by a
vote of a majority of our board then in office. The certificate
of incorporation also provides that our board shall have the
exclusive right, except as may be provided in the terms of any
series of preferred stock created by resolutions of the board,
to fill vacancies, including vacancies created by expansion of
our board. Furthermore, except as may be provided in the terms
of any preferred stock created by resolution of our board with
respect to the election of directors by the holders of such
series, directors may be removed by stockholders only for cause
and only by the affirmative vote of at least 66 2/3% of the
voting power of all of the shares of our capital stock then
entitled to vote generally in the election of directors, voting
together as a single class.
These provisions, in conjunction with the
provision of the certificate of incorporation authorizing our
board to fill vacant directorships, could prevent stockholders
from removing incumbent directors without cause and filling the
resulting vacancies with their own nominees.
No
Stockholder Action by Written Consent; Special
Meetings
Our certificate of incorporation provides that,
except as may be provided in the terms of any series of
preferred stock created by resolution of our board, stockholder
action can be taken only at an annual or special meeting of
stockholders and cannot be taken by written consent in lieu of a
meeting. Our certificate of incorporation also provides that
special meetings of stockholders can only be called by the
Chairman of the Board or by the Secretary pursuant to a
resolution approved by a majority of our board then in office.
Stockholders are not permitted to call a special meeting of
stockholders.
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Approval of
Certain Business Combinations
Our certificate of incorporation requires that
certain business combinations with a "Related Person"
(as such term is defined in our certificate of incorporation) be
approved by the affirmative vote of 80% of our outstanding
shares generally entitled to vote for the election of directors,
unless (i) the business combination has been approved by
two-thirds of the board of directors; or (ii) the amount of
consideration to be received in the business combination by the
holders of common stock or any class or series of outstanding
voting stock, other than common stock, shall be equal to the
greater of: (i) the highest per share price paid by the
Related Person for any shares of our stock acquired within the
prior two years; or (ii) the fair market value (as such
term is defined in our certificate of incorporation) of our
common stock.
Advance
Notice for Raising Business or Making Nominations at
Meetings
Our by-laws establish an advance notice procedure
with regard to stockholder proposals and nominations of
individuals for election to the board of directors. In general,
notice of a stockholder proposal or a director nomination for an
annual meeting must be delivered to us at our executive offices
not less than 120 days nor more than 150 days before
the date of the anniversary of the last annual
stockholders' meeting (unless the meeting is to be held
more than 30 days in advance of such anniversary date, in
which event the stockholder proposal or director nomination
shall be delivered to us no later than the close of business on
the 10th day following the day on which notice of the meeting
was given) and must contain specified information and conform to
certain requirements, as set forth in our by-laws. Notice of a
director nomination for a special meeting must be received by us
no later than the 10th day following the day on which notice of
the date of a special meeting of stockholders was given. If the
presiding officer at any stockholders' meeting determines
that a stockholder proposal or director nomination was not made
in accordance with the by-laws, we may disregard such proposal
or nomination.
The notice of any nomination for election as a
director must set forth the name, age, business and residence
address of the person or persons to be nominated; the business
experience during the past five years of such person or persons;
including the person's principal occupation or employment
during such period, the name and principal business of any
corporation or other organization in which such occupation or
employment was carried on, and such other information as to the
nature of the persons responsibilities and level of professional
competence as may be sufficient to permit assessment of the
person's prior business experience, the class or series and
number of shares of our capital stock beneficially owned by the
person and any other information relating to the person that
would be required to be disclosed in a proxy statement or other
filing required to be made in connection with solicitations of
proxies for election of directors pursuant to Section 14 of
the Exchange Act of 1934 and the rules and regulations
promulgated thereunder.
Amendments to
By-Laws
Our certificate of incorporation provides that
our board or the holders of at least 66 2/3% of the voting
power of all shares of our capital stock then entitled to vote
generally in the election of directors, voting together as a
single class, have the power to amend or repeal our by-laws.
Amendment of
the Certificate of Incorporation
Any proposal to amend, alter, change or repeal
any provision of our certificate of incorporation, except as may
be provided in the terms of any preferred stock created by
resolution of our board and which relate to such series of
preferred stock, requires approval by the affirmative vote of
both a majority of the members of our board then in office and a
majority vote of the voting power of all of the shares of our
capital stock entitled to vote generally in the election of
directors, voting together as a single class. However, any
proposal to amend, alter, change or repeal the provisions of our
certificate of incorporation relating to (1) the
classification of our board, (2) removal of directors,
(3) the prohibitions on stockholder action by written
consent or stockholder calls for special meetings,
(4) amendment of by-laws, or (5) amendment of the
certificate of incorporation requires approval by the
affirmative vote of 66 2/3% of the voting power of all of
the shares of our capital stock entitled to vote generally in
the election of directors, voting together as a
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single class; except in the case of any proposal
to amend, alter, change or repeal the provision of our
certificate of incorporation relating to business combinations
which requires approval by the affirmative vote of 80% of the
voting power of all of the shares of our capital stock entitled
to vote generally in the election of directors, voting together
as a single class.
Preferred
Stock and Additional Common Stock
Under the certificate of incorporation, our board
will have the authority to provide by resolution for the
issuance of shares of one or more series of preferred stock. Our
board is authorized to fix by resolution the terms and
conditions of each such other series. See
"Description
of Capital Stock — Preferred Stock".
We believe that the availability of our preferred
stock, in each case issuable in series, and additional shares of
common stock could facilitate certain financings and
acquisitions and provide a means for meeting other corporate
needs which might arise. The authorized shares of our preferred
stock, as well as authorized but unissued shares of common stock
will be available for issuance without further action by our
stockholders, unless stockholder action is required by
applicable law or the rules of any stock exchange on which any
series of our stock may then be listed, or except as may be
provided in the terms of any preferred stock created by
resolution of our board.
These provisions give our board the power to
approve the issuance of a series of preferred stock, or
additional shares of common stock, that could, depending on its
terms, either impede or facilitate the completion of a merger,
tender offer or other takeover attempt. For example, the
issuance of new shares of preferred stock might impede a
business combination if the terms of those shares include voting
rights which would enable a holder to block business
combinations or, alternatively, might facilitate a business
combination if those shares have general voting rights
sufficient to cause an applicable percentage vote requirement to
be satisfied.
Moreover, the Series D preferred stock is
issuable under the circumstances provided for in the rights
agreement upon exercise of the rights. See
"— Shareholder Rights Plan".
Delaware
Business Combination Statute
Section 203 of the Delaware General
Corporation Law, or the DGCL, provides that, subject to certain
exceptions specified therein, an "interested
stockholder" of a Delaware corporation may not engage in
any business combination with the corporation for a three-year
period following the time that such stockholder becomes an
"interested stockholder" unless (1) prior to such
time, the board of directors of the corporation approved either
the business combination or the transaction which resulted in
the stockholder becoming an "interested stockholder",
(2) upon consummation of the transaction which resulted in
the stockholder becoming an "interested stockholder,"
the interested stockholder owned at least 85% of the voting
stock of the corporation outstanding at the time the transaction
commenced (excluding certain shares), or (3) at or
subsequent to such time, the business combination is approved by
the board of directors of the corporation and authorized at an
annual or special meeting of stockholders by the affirmative
vote of at least 66 2/3% of the outstanding voting stock
which is not owned by the "interested stockholder."
Except as otherwise specified in Section 203, an
"interested stockholder" is defined to include
(1) any person that is the owner of 15% or more of the
outstanding voting stock of the corporation, or is an affiliate
or associate of the corporation and was the owner of 15% or more
of the outstanding voting stock of the corporation at any time
within three years immediately prior to the relevant date and
(2) the affiliates and associates of any such person. Under
certain circumstances, Section 203 makes it more difficult
for a person who would be an "interested stockholder"
to effect various business combinations with a corporation for a
three-year period, although the stockholders may elect to
exclude a corporation from the restrictions imposed thereunder.
Our certificate of incorporation does not exclude us from the
restrictions imposed under Section 203. The provisions of
Section 203 may encourage companies interested in acquiring
us to negotiate in advance with our board, since the stockholder
approval requirement would be avoided if a majority of the
directors then in office approve either the business combination
or the transaction which results in the stockholder becoming an
interested stockholder. These provisions also may have the
effect of preventing changes in our management. It
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is possible that such provisions could make it
more difficult to accomplish transactions which stockholders may
otherwise deem to be in their best interests.
Shareholder
Rights Plan
Each holder of a share of our common stock has
the right to purchase from us one one-hundredth ( 1/100) of
a share of our Series D preferred stock, $.01 par value per
share, at a price of $100 per one one-hundredth of a
Series D preferred share. The exercise price and the number
of Series D preferred shares issuable upon exercise are
subject to adjustments from time to time to prevent dilution.
The share purchase rights are not exercisable until the earlier
to occur of (1) 10 days following a public
announcement that a person or group of affiliated or associated
persons, referred to as an acquiring person, have acquired
beneficial ownership of 15% or more of our outstanding voting
common stock or (2) 10 business days following the
commencement of, or announcement of an intention to make, a
tender offer or exchange offer which would result in an
acquiring person beneficially owning 15% or more of our
outstanding voting shares of common stock.
If we are acquired in a merger or other business
combination, or if more than 50% of our consolidated assets or
earning power is sold after a person or group has become an
acquiring person, proper provision will be made so that each
holder of a share purchase right — other than share
purchase rights beneficially owned by the acquiring person,
which will thereafter be void — will have the right to
receive, upon exercise of the share purchase right at the then
current exercise price, the number of shares of common stock of
the acquiring company which at the time of the transaction have
a market value of two times the exercise price. If any person or
group becomes an acquiring person, proper provision shall be
made so that each holder of a share purchase right — other
than share purchase rights beneficially owned by the acquiring
person, which will thereafter be void — will have the right
to receive upon exercise of the share purchase right at the then
current exercise price, the number of shares of Series D
preferred stock with a market value at the time of the
transaction equal to two times the exercise price.
Series D preferred shares issuable upon
exercise of the share purchase rights will not be redeemable.
Each Series D preferred share will be entitled to a minimum
preferential dividend payment of $.10 per share and will be
entitled to an aggregate dividend of 100 times the cash
dividend declared per share of common stock. In the event we
liquidate, the holders of the Series D preferred shares
will be entitled to receive a payment in an amount equal to the
greater of $100 per one one-hundredth share or
100 times the payment made per share of common stock. Each
Series D preferred share will have 100 votes, voting
together with the shares of common stock. Finally, in the event
of any merger, consolidation or other transaction in which
shares of common stock are exchanged, each Series D
preferred share will be entitled to receive 100 times the
amount received per share of common stock. These rights are
protected by customary antidilution provisions.
Before the date the share purchase rights are
exercisable, the share purchase rights may not be detached or
transferred separately from the common stock. The share purchase
rights will expire in 2012, or, if the share purchase rights
become exercisable before 2012, at the close of business on the
90th day following such date the share purchase right become
exercisable, provided that our board of directors does not
extend or otherwise modify the right. At any time on or prior to
10 business days following the time an acquiring person
acquires beneficial ownership of 15% or more of our outstanding
voting common stock, our board of directors may redeem the share
purchase rights in whole, but not in part, at a price of $.01
per share purchase right. Immediately upon any share purchase
rights redemption, the exercise rights terminate, and the
holders will only be entitled to receive the redemption price. A
more detailed description and terms of the share purchase rights
are set forth in a rights agreement between Cosí
and                ,
as rights agent. This rights agreement could have the effect of
discouraging tender offers or other transactions that might
otherwise result in our shareholders receiving a premium over
the market price for their common stock.
Indemnification and Limitations on Liability
of Directors and Officers
Our by-laws provide for indemnification of
directors to the fullest extent permitted by Delaware law. Our
certificate of incorporation, to the extent permitted by
Delaware law, eliminates or limits the personal liability
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of directors to Cosí and its shareholders
for monetary damages for breach of fiduciary duty. Such
indemnification may be available for liabilities arising in
connection with this offering. To the extent that limitation of
liability or indemnification for liabilities under the
Securities Act may be permitted to directors, officers or
persons controlling Cosí under the foregoing provisions, we
have been informed that, in the opinion of the SEC, such
indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. Our by-laws also
allow us to indemnify our officers to the fullest extent
permitted by Delaware law. Our by-laws obligate us, under
certain circumstances, to advance expenses to our directors and
officers in defending an action, suit or proceeding for which
indemnification may be sought. We also can indemnify someone
serving at our request as a director, officer, employee,
fiduciary or agent of another corporation or of a partnership,
joint venture, trust or other enterprise against these
liabilities.
Our by-laws also provide that we have the power
to purchase and maintain insurance on behalf of any person who
is or was one of our directors, officers, employees or agents
against any liability asserted against that person or incurred
by that person in these capacities, whether or not we would have
the power to indemnify that person against these liabilities
under Delaware law. We maintain insurance on behalf of all of
our directors and executive officers.
Other Matters
is
the transfer agent and registrar for our common stock.
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CERTAIN U.S. FEDERAL INCOME AND ESTATE TAX
CONSIDERATIONS
The following is a general summary of certain
U.S. federal income and estate tax considerations with respect
to your acquisition, ownership and disposition of common stock
if you are a Non-U.S. Holder. A "Non-U.S. Holder" is a
beneficial owner of common stock that, for U.S. federal income
tax purposes, is not:
•
an individual who is a citizen or resident of the
	U.S.;
•
a corporation or other entity treated as a
	corporation for U.S. federal income tax purposes created or
	organized in or under the laws of the U.S. or of any political
	subdivision of the U.S.;
•
an estate, the income of which is subject to U.S.
	federal income taxation regardless of its source; or
•
a trust, if a court within the U.S. is able to
	exercise primary supervision over the administration of the
	trust and one or more U.S. persons have the authority to control
	all substantial decisions of the trust.
The tax treatment of a partner in a partnership
generally will depend on the status of the partner and the
activities of the partnership. If you are a partnership or a
partner in a partnership that is considering the purchase of
common stock, you should consult your tax advisor regarding the
particular tax consequences to you.
This summary does not address all of the U.S.
federal income tax considerations that may be relevant to you in
light of your particular circumstances. This discussion is
limited to Non-U.S. Holders that hold our common stock as a
capital asset. In addition, this summary does not deal with
holders that are subject to special treatment under U.S. federal
income tax laws (such as insurance companies, tax-exempt
organizations, financial institutions, brokers, dealers in
securities, certain U.S. expatriates, and Non-U.S. Holders that
hold our common stock as part of a "straddle,"
"hedge," "conversion transaction,"
"synthetic security," or other integrated investment).
This summary does not discuss any aspects of state, local or
non-U.S. taxation. This summary is based on current provisions
of the Internal Revenue Code of 1986, as amended, U.S. Treasury
regulations, judicial opinions, published positions of the
Internal Revenue Service, and all other applicable authorities,
all as in effect as of the date of this prospectus and all of
which are subject to change, possibly with retroactive effect.
We urge prospective investors to consult their
tax advisors regarding the U.S. federal, state, local, and
non-U.S. income and other tax considerations of acquiring,
holding and disposing of shares of our common stock.
Dividends
As discussed under "Dividend Policy"
above, we do not currently expect to pay dividends. In the event
that we do pay dividends, any dividends we pay to you, as a
Non-U.S. Holder, generally will be subject to U.S. withholding
tax at a rate of 30% (or a lower rate prescribed by an
applicable tax treaty) on the gross amount of the dividends
unless the dividends are effectively connected with your conduct
of a trade or business in the U.S. (or, if a tax treaty applies,
attributable to a U.S. permanent establishment) and you provide
us with an Internal Revenue Service Form W-8ECI (or
appropriate substitute form).
For purposes of determining whether tax is to be
withheld at a reduced rate under a tax treaty, you will be
required to provide an Internal Revenue Service Form W-8BEN
(or appropriate substitute form) certifying your entitlement to
benefits under a treaty. In addition, where dividends are paid
to a Non-U.S. Holder that is a partnership or other pass-through
entity, persons holding an interest in the entity may need to
provide the certification.
Dividends effectively connected with a U.S. trade
or business (or, if a tax treaty applies, attributable to a U.S.
permanent establishment) generally will be subject to U.S.
federal income tax on net income basis, in the same manner as
generally applied to U.S. persons. In addition, a "branch
profits tax" may be imposed at a 30% rate (or a lower rate
under an applicable tax treaty) on dividends received by a
foreign corporation that are effectively connected with the
conduct of a trade or business in the U.S.
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Sale or Other Disposition of Our Common
Stock
As a Non-U.S. Holder, you generally will not be
subject to U.S. federal income tax, including any withholding
thereof, on any gain realized upon the sale or other disposition
of your shares of the common stock unless:
•
the gain is effectively connected with your
	conduct of a trade or business within the U.S. (or, if a tax
	treaty applies, is attributable to a U.S. permanent
	establishment);
•
you are an individual who is present in the U.S.
	for 183 days or more in the taxable year of disposition and
	you meet other requirements; or
•
we are or have been a "U.S. real property
	holding corporation" for U.S. federal income tax purposes
	and you hold or have held, directly or indirectly, at any time
	within the shorter of the five-year period preceding disposition
	or your holding period for the shares of common stock, more than
	5% of our outstanding common stock.
We do not believe that we are, have been or are
likely to become a U.S. real property holding corporation.
However, no assurance can be provided that we will not become a
U.S. real property holding corporation.
Gain that is effectively connected with your
conduct of a trade or business within the U.S. generally will be
subject to U.S. federal income tax on a net income basis in the
same manner as generally applied to U.S. persons (and if you are
a corporation, the branch profits tax discussed above may also
apply in some circumstances), but you will not be subject to
withholding. If you are described in the second bullet point
above, you generally will be subject to tax at a rate of 30% on
the gain realized, although the gain may be offset by some U.S.
source capital losses. You should consult any applicable income
tax treaties that may provide for a lower rate of tax or other
rules different from those described above.
Federal Estate Tax
Common stock actually or beneficially held by an
individual who is a Non-U.S. Holder at the time of death will be
included in the individual's gross estate for U.S. federal
estate tax purposes, unless an applicable estate tax or other
treaty provides otherwise and, therefore, may be subject to U.S.
federal estate tax. Estates of non-resident aliens are generally
allowed a statutory credit that has the effect of offsetting the
U.S. federal estate tax imposed on the first $60,000 of the
taxable estate.
Information Reporting and Backup
Withholding
We must report annually to the Internal Revenue
Service and to you the amount of dividends we pay to you and any
tax we withhold. These reporting requirements apply regardless
of whether withholding is reduced by an applicable tax treaty.
Pursuant to applicable tax treaties or other agreements, this
information also may be made available to the tax authorities in
the country in which you reside or are established.
Additional U.S. information reporting
requirements and backup withholding tax will generally apply to
the dividends paid to you on the common stock at an address
inside the U.S. and to payments to you of the proceeds of a sale
of the common stock by a U.S. office of a broker unless you
certify, under penalties of perjury, that you are not a U.S.
person or otherwise establish an exemption. Backup withholding
is imposed at a rate not to exceed 31%. Information reporting
(but not backup withholding) generally will also apply to
payments of the proceeds of sales of the common stock by
non-U.S. offices of U.S. brokers, or non-U.S. brokers with some
types of relationships with the U.S., unless you comply with
certain certification procedures to establish that you are not a
U.S. person or you otherwise establish an exemption.
Backup withholding is not an additional tax. Any
amounts withheld under the backup withholding tax rules from a
payment to you can be refunded or credited against your U.S.
federal income tax liability, if any, if the required
information is furnished to the Internal Revenue Service.
The foregoing discussion of U.S. federal
income and estate tax considerations is not tax advice.
Accordingly, each prospective Non-U.S. Holder of our common
stock should consult that holder's own tax adviser with
respect to the federal, state, local and non-U.S. tax
consequences of the acquisition, ownership and disposition of
our common stock.
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SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no public
market for our common stock. Future sales of substantial amounts
of our common stock in the public market could adversely affect
market prices prevailing from time to time. Furthermore, since
only a limited number of shares will be available for sale
shortly after the offering because of certain contractual and
legal restrictions on resale (as described below), sales of
substantial amounts of our common stock in the public market
after such restrictions lapse could adversely affect the
prevailing market price at such time and our ability to raise
equity capital in the future.
Upon completion of this offering, we will have
outstanding an aggregate
of                shares
of common stock, assuming no exercise of the underwriters'
over-allotment option and no exercise of outstanding options to
purchase our common stock. Of these shares, the shares of common
stock to be sold in this offering will be freely tradable
without restriction or further registration under the Securities
Act, unless such shares are held by our "affiliates,"
as that term is defined in Rule 144 under the Securities
Act. These restricted shares may be sold in the public market
only if registered or if they qualify for an exemption from
registration under Rule 144 or Rule 701 promulgated
under the Securities Act, which rules are summarized below. As a
result of the contractual restrictions described below and the
provisions of Rule 144 and Rule 701, these restricted
shares will be available for sale in the public market as
follows (based on the number of shares outstanding as of
April 1, 2002):
(i)                restricted
shares will be eligible for sale 90 days after the date of
this prospectus; and (ii) all of the restricted shares will
be available for sale in the public market upon expiration of
the lock-up agreements 180 days after the date of this
prospectus.
All of our officers and directors, and certain of
our stockholders and option holders have agreed not to sell,
make any short sale of, grant any option for the purchase of, or
otherwise transfer or dispose of, any shares of common stock or
any securities convertible into or exercisable for common stock
held by such persons for a period of 180 days after the
date of this prospectus, without the prior written consent of
Credit Suisse First Boston Corporation.
In general, under Rule 144 as currently in
effect, a person (or persons whose shares are aggregated),
including an affiliate, who has beneficially owned shares for at
least one year is entitled to sell, within any three-month
period commencing 90 days after the date of this
prospectus, a number of shares that does not exceed the greater
of (i) 1% of the then outstanding shares of our common
stock
(approximately                shares
immediately after the offering) or (ii) the average weekly
trading volume of our common stock on the Nasdaq National Market
during the four calendar weeks preceding such sale, subject to
the filing of a Form 144 with respect to such sale. Sales
under Rule 144 are also subject to certain manner of sale
provisions and notice requirements and to the availability of
current public information about us. In addition, a person who
is not deemed to have been an affiliate of ours at any time
during the 90 days preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least
two years, would be entitled to sell such shares under
Rule 144(k) without regard to the requirements described
above. Therefore, unless otherwise restricted,
"144(k) shares" may be sold immediately following
completion of the offering. In general, under Rule 701 of
the Securities Act as currently in effect, any of our employees,
consultants or advisors who purchased shares from us in
connection with a compensatory stock or option plan or written
employment agreement is eligible to resell such shares
90 days after the effective date of the offering in
reliance on Rule 144, but without compliance with certain
restrictions, including the holding period conditions, contained
in Rule 144.
Within 90 days of the date of this
prospectus, we intend to file a registration statement under the
Securities Act to register shares of our common stock reserved
for issuance under our equity incentive plans, thus permitting
the resale of such shares by non-affiliates in the public market
without restriction under the Securities Act. Such registration
statements will become effective immediately upon filing. As of
April 1, 2002, 6,058,042 options to purchase shares of our
common stock were outstanding under our stock option plans and
agreements, certain of which are subject to the lock-up
agreements described above.
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UNDERWRITING
Under the terms and subject to the conditions
contained in an underwriting agreement
dated                ,
2002, we have agreed to sell to the underwriters named below,
for whom Credit Suisse First Boston Corporation, Banc of America
Securities LLC, U.S. Bancorp Piper Jaffray Inc., and William
Blair & Company, L.L.C. are acting as representatives,
the following respective numbers of shares of common stock:
Number
of Shares
Underwriter
Credit Suisse First Boston Corporation
Banc of America Securities LLC
U.S. Bancorp Piper Jaffray Inc.
William Blair & Company, L.L.C.
Total
The underwriting agreement provides that the
underwriters are obligated to purchase all the shares of common
stock in the offering if any are purchased, other than those
shares covered by the over-allotment option described below. The
underwriting agreement also provides that if an underwriter
defaults the purchase commitments of non-defaulting underwriters
may be increased or the offering may be terminated.
We have granted to the underwriters a 30-day
option to purchase on a pro rata basis up
to                additional
shares at the initial public offering price less the
underwriting discounts and commissions. The option may be
exercised only to cover any over-allotments of common stock.
The underwriters propose to offer the shares of
common stock initially at the public offering price on the cover
page of this prospectus and to selling group members at that
price less a selling concession of
$     per share. The underwriters and
selling group members may allow a discount of
$     per share on sales to other
broker/dealers. After the initial public offering the
underwriters may change the public offering price and concession
and discount to broker/dealers.
The following table summarizes the compensation
and estimated expenses we will pay:
Per Share
Total
Without
With
Without
With
Over-allotment
Over-allotment
Over-allotment
Over-allotment
Underwriting Discounts and Commissions paid by us
$
$
$
$
Expenses payable by us
$
$
$
$
The representatives have informed us that they do
not expect discretionary sales to exceed 5% of the shares of
common stock being offered.
We have agreed that we will not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Securities and Exchange Commission
a registration statement under the Securities Act relating to,
any shares of our common stock or securities convertible into or
exchangeable or exercisable for any shares of our common stock,
or publicly disclose the intention to make any offer, sale,
pledge, disposition or filing, without the prior written consent
of Credit Suisse First Boston Corporation for a period of
180 days after the date of this prospectus, except
issuances pursuant to the exercise of employee stock options
outstanding on the date hereof.
Our officers and directors and certain
shareholders and option holders
(representing      % of our outstanding
shares of common stock) have agreed that they will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly
or indirectly, any shares of our common stock or securities
convertible into or exchangeable or exercisable for any shares
of our common stock, enter into a transaction that would have
the same effect, or enter into any swap, hedge or other
arrangement that transfers, in whole or in part, any of the
economic consequences of ownership of our common stock, whether
any of these transactions are to be settled by delivery of our
common stock or other securities, in cash or otherwise, or
publicly disclose the
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intention to make any offer, sale, pledge or
disposition, or to enter into any transaction, swap, hedge or
other arrangement, without, in each case, the prior written
consent of Credit Suisse First Boston Corporation for a period
of 180 days after the date of this prospectus.
The underwriters have reserved for sale at the
initial public offering price up
to          shares
of the common stock for employees, directors and other persons
associated with us who have expressed an interest in purchasing
common stock in the offering. The number of shares available for
sale to the general public in the offering will be reduced to
the extent these persons purchase the reserved shares. Any
reserved shares not so purchased will be offered by the
underwriters to the general public on the same terms as the
other shares.
We have agreed to indemnify the underwriters
against liabilities under the Securities Act, or contribute to
payments that the underwriters may be required to make in that
respect.
We have applied to list the shares of common
stock on The Nasdaq Stock Market's National Market under
the symbol "COSI."
In February 2002, certain individuals
associated with William Blair & Company, L.L.C. purchased
164,320 shares of our Series C preferred stock.
In connection with the offering the underwriters
may engage in stabilizing transactions, over-allotment
transactions, syndicate covering transactions, penalty bids and
passive market making in accordance with Regulation M under
the Exchange Act.
•
Stabilizing transactions permit bids to purchase
	the underlying security so long as the stabilizing bids do not
	exceed a specified maximum.
•
Over-allotment involves sales by the underwriters
	of shares in excess of the number of shares the underwriters are
	obligated to purchase, which creates a syndicate short position.
	The short position may be either a covered short position or a
	naked short position. In a covered short position, the number of
	shares over-allotted by the underwriters is not greater than the
	number of shares that they may purchase in the over-allotment
	option. In a naked short position, the number of shares involved
	is greater than the number of shares in the over-allotment
	option. The underwriters may close out any covered short
	position by either exercising their over-allotment option and/or
	purchasing shares in the open market.
•
Syndicate covering transactions involve purchases
	of the common stock in the open market after the distribution
	has been completed in order to cover syndicate short positions.
	In determining the source of shares to close out the short
	position, the underwriters will consider, among other things,
	the price of shares available for purchase in the open market as
	compared to the price at which they may purchase shares through
	the over-allotment option. If the underwriters sell more shares
	than could be covered by the over-allotment option, a naked
	short position, the position can only be closed out by buying
	shares in the open market. A naked short position is more likely
	to be created if the underwriters are concerned that there could
	be downward pressure on the price of the shares in the open
	market after pricing that could adversely affect investors who
	purchase in the offering.
•
Penalty bids permit the representatives to
	reclaim a selling concession from a syndicate member when the
	common stock originally sold by the syndicate member is
	purchased in a stabilizing or syndicate covering transaction to
	cover syndicate short positions.
•
In passive market making, market makers in the
	common stock who are underwriters or prospective underwriters
	may, subject to limitations, make bids for or purchases of our
	common stock until the time, if any, at which a stabilizing bid
	is made.
These stabilizing transactions, syndicate
covering transactions and penalty bids may have the effect of
raising or maintaining the market price of our common stock or
preventing or retarding a decline in the market price of the
common stock. As a result the price of our common stock may be
higher than the price that might otherwise exist in the open
market. These transactions may be effected on The Nasdaq
National Market and, if commenced, may be discontinued at any
time.
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A prospectus in electronic format may be made
available on the web sites maintained by one or more of the
underwriters participating in this offering. The representatives
may agree to allocate a number of shares to underwriters for
sale to their online brokerage account holders. Internet
distributions will be allocated by the underwriters that will
make internet distributions on the same basis as other
allocations.
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NOTICE TO CANADIAN RESIDENTS
Resale Restrictions
The distribution of the common stock in Canada is
being made only on a private placement basis exempt from the
requirement that we prepare and file a prospectus with the
securities regulatory authorities in each province where trades
of common stock are made. Any resale of the common stock in
Canada must be made under applicable securities laws which will
vary depending on the relevant jurisdiction, and which may
require resales to be made under available statutory exemptions
or under a discretionary exemption granted by the applicable
Canadian securities regulatory authority. Purchasers are advised
to seek legal advice prior to any resale of the common stock.
Representations of Purchasers
By purchasing common stock in Canada and
accepting a purchase confirmation a purchaser is representing to
us and the dealer from whom the purchase confirmation is
received that;
•
the purchaser is entitled under applicable
	provincial securities laws to purchase the common stock without
	the benefit of a prospectus qualified under those securities
	laws;
•
where required by law, that the purchaser is
	purchasing as principal and not as agent; and
•
the purchaser has reviewed the text above under
	Resale Restrictions.
Rights of Action — Ontario
Purchasers Only
Under Ontario securities legislation, a purchaser
who purchases a security offered by this prospectus during the
period of distribution will have a statutory right of action for
damages, or while still the owner of the shares, for rescission
against us in the event that this prospectus contains a
misrepresentation. A purchaser will be deemed to have relied on
the misrepresentation. The right of action for damages is
exercisable not later than the earlier of 180 days from the
date the purchaser first had knowledge of the facts giving rise
to the cause of action and three years from the date on which
payment is made for the shares. The right of action for
rescission is exercisable not later than 180 days from the
date on which payment is made for the shares. If a purchaser
elects to exercise the right of action for rescission, the
purchaser will have no right of action for damages against us.
In no case will the amount recoverable in any action exceed the
price at which the shares were offered to the purchaser and if
the purchaser is shown to have purchased the securities with
knowledge of the misrepresentation, we will have no liability.
In the case of an action for damages, we will not be liable for
all or any portion of the damages that are proven to not
represent the depreciation in value of the shares as a result of
the misrepresentation relied upon. These rights are in addition
to, and without derogation from, any other rights or remedies
available at law to an Ontario purchaser. The foregoing is a
summary of the rights available to an Ontario purchaser. Ontario
purchasers should refer to the complete text of the relevant
statutory provisions.
Enforcement of Legal Rights
All of our directors and officers as well as the
experts named herein may be located outside of Canada and, as a
result, it may not be possible for Canadian purchasers to effect
service of process within Canada upon us or those persons. All
or a substantial portion of our assets and the assets of those
persons may be located outside of Canada and, as a result, it
may not be possible to satisfy a judgment against us or those
persons in Canada or to enforce a judgment obtained in Canadian
courts against us or those persons outside of Canada.
Taxation and Eligibility for
Investment
Canadian purchasers of common stock should
consult their own legal and tax advisors with respect to the tax
consequences of an investment in the common stock in their
particular circumstances and about the eligibility of the common
stock for investment by the purchaser under relevant Canadian
legislation.
67
Table of Contents
PRICING OF THIS OFFERING
Prior to this offering, there has been no public
market for our common stock. Consequently, the initial public
offering price for our common stock has been determined by
negotiation among us and the representatives of the
underwriters. Among the primary factors considered in
determining the public offering price were:
•
prevailing market conditions;
•
our results of operations in recent periods;
•
the present stage of our development;
•
the market capitalizations and stages of
	development of other companies that we and the representatives
	of the underwriters believe to be comparable to our business; and
•
estimates of our business potential.
LEGAL MATTERS
Certain legal matters with respect to the
validity of common stock offered hereby will be passed upon for
us by Cadwalader, Wickersham & Taft, New York, New
York. A member of Cadwalader, Wickersham & Taft
beneficially owned 97,017 shares, representing 0.57% of our
common stock prior to this offering. Certain matters relating to
the common stock will be passed upon for the Underwriters by
Dewey Ballantine LLP, New York, New York.
EXPERTS
The consolidated statements of operations,
redeemable securities and stockholders' equity and cash
flows (including the related financial statement schedule) of
Cosí, Inc. (formerly Xando Cosí, Inc.) for the
year ended January 3, 2000, appearing in this prospectus
and registration statement, have been audited by
Ernst & Young LLP, independent auditors, as set forth
in their reports thereon appearing elsewhere herein and are
included in reliance upon such reports given upon the authority
of such firm as experts in accounting and auditing.
The financial statements and schedules for fiscal
2001 and 2000 included in this prospectus and elsewhere in the
registration statement have been audited by Arthur
Andersen LLP, independent public accountants, as indicated
in their reports with respect thereto, and are included herein
in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
On May 23, 2001 Cosí appointed Arthur
Andersen LLP to replace Ernst & Young LLP as its
principal accountants. The reports of Ernst & Young LLP
on the fiscal 1999 financial statements of Cosí did not
contain an adverse opinion or disclaimer of opinion, nor were
they qualified or modified as to uncertainty, audit scope or
accounting principles. The decision to change accountants was
approved by Cosí's Board of Directors. There were no
disagreements with the former accountants during fiscal 2000 or
preceding their replacement on any matter of accounting
principles or practices, financial statement disclosure or
auditing scope or procedures, which disagreements, if not
resolved to the former accountants' satisfaction, would
have caused them to make reference to the subject matter of the
disagreement in connection with their reports.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration
statement on Form S-1 that Cosí has filed with the SEC
covering the shares of common stock that Cosí is offering.
This prospectus does not contain all of the information
presented in the registration statement, and you should refer to
that registration statement with its exhibits for further
information. Statements in this prospectus describing or
summarizing any contract or other document are not complete, and
you should review the copies of those documents filed as
exhibits to the registration statement for more detail. You may
read and copy the registration statement at the SEC's
Public Reference
68
Table of Contents
Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. For information on the operation of
the Public Reference Room, call the SEC at 1-800-SEC-0330. You
can also inspect our registration statement on the Internet at
the SEC's web site, http://www.sec.gov.
After this offering, we will be required to file
annual, quarterly, and current reports, proxy and information
statements and other information with the SEC. You can review
this information at the SEC's Public Reference Room or on
the SEC's web site, as described above.
69
Table of Contents
COSI, INC.
CONSOLIDATED FINANCIAL STATEMENTS
INDEX
Page
Report of Independent Public Accountants
F-2
Report of Independent Auditors
F-3
Consolidated Financial Statements:
Consolidated Balance Sheets at January 1,
	2001, December 31, 2001 and April 1, 2002
F-4
Consolidated Statements of Operations for the
	years ended January 3, 2000, January 1, 2001 and
	December 31, 2001 and for the three months ended
	April 2, 2001 and April 1, 2002
F-5
Consolidated Statements of Redeemable Securities
	and Stockholders' Equity for the years ended
	December 31, 2001 and January 1, 2001 and for the
	three months ended April 1, 2002
F-6
Consolidated Statements of Cash Flows for the
	years ended January 3, 2000, January 1, 2001 and
	December 31, 2001 and for the three months ended
	April 2, 2001 and April 1, 2002
F-7
Notes to Consolidated Financial Statements
F-8
F-1
Table of Contents
REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS
To Cosi, Inc.:
We have audited the accompanying consolidated
balance sheets of Cosi, Inc. and subsidiaries (formerly Xando
Cosi, Inc., a Delaware corporation) as of January 1, 2001
and December 31, 2001, and the related consolidated
statements of operations, redeemable securities and
stockholders' equity and cash flows for the years then
ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial
position of Cosi, Inc. as of January 1, 2001 and
December 31, 2001, and the consolidated results of its
operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the
United States.
/s/ Arthur Andersen LLP
Melville, New York
April 2, 2002
F-2
Table of Contents
REPORT OF INDEPENDENT AUDITORS
The Board of Directors of Cosi, Inc.:
We have audited the accompanying consolidated
statements of operations, redeemable securities and
stockholders' equity and cash flows of Cosi, Inc. (formerly
Xando Cosi, Inc.) for the year ended January 3, 2000. These
financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material respects, the
consolidated results of operations and cash flows of Cosi, Inc.
for the year ended January 3, 2000 in conformity with
accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
Stamford, Connecticut
November 19, 2000
F-3
Table of Contents
COSI, INC.
CONSOLIDATED BALANCE SHEETS
January 1,
December 31,
April 1,
2001
2001
2002
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
5,062,872
$
4,469,571
$
12,568,005
Accounts receivable, net of allowances of
	$367,038, $219,845 and $231,244
1,964,547
1,198,786
815,917
Inventory
910,873
1,403,806
1,452,814
Prepaid expenses and other current assets
515,268
568,353
845,622
Total current assets
8,453,560
7,640,516
15,682,358
PROPERTY, EQUIPMENT AND LEASEHOLD
IMPROVEMENTS, net
21,781,207
25,507,195
27,022,402
INTANGIBLE, SECURITY DEPOSITS AND OTHER ASSETS,
	net
1,831,054
2,240,733
2,282,689
Total assets
$
32,065,821
$
35,388,444
$
44,987,449
LIABILITIES, REDEEMABLE SECURITIES AND
	STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
$
3,824,415
$
4,737,121
$
2,374,497
Accrued liabilities
5,202,829
4,951,809
4,904,977
Current portion of other liabilities
746,751
1,678,880
1,678,880
Current portion of capital lease obligations
544,523
441,862
364,585
Current portion of long-term debt
942,831
1,136,835
1,176,854
Total current liabilities
11,261,349
12,946,507
10,499,793
OTHER LIABILITIES, net of current portion
4,436,047
9,531,364
9,594,695
CAPITAL LEASE OBLIGATIONS, net of current portion
604,636
135,236
58,405
LONG-TERM DEBT, net of current portion
2,343,786
9,466,022
6,487,387
Total liabilities
18,645,818
32,079,129
26,640,280
COMMITMENTS AND CONTINGENCIES (Note 13)
REDEEMABLE SECURITIES:
Series A Convertible Preferred stock —
	$0.01 par value; 2,005,862 authorized, 2,005,862 issued and
	outstanding; aggregate liquidation preference of $17,338,870,
	$18,768,150 and $19,143,513, including accrued dividends of
	$3,297,836, $4,727,116 and $5,102,479, respectively
16,663,989
18,318,205
18,749,802
Series C Convertible Preferred
	stock — $0.01 par value; 10,510,191 authorized,
	4,717,856, 7,282,782 and 9,312,705 issued and outstanding,
	respectively; aggregate liquidation preference of $45,177,441,
	$75,524,713 and $92,299,485, including accrued dividends of
	$3,826,780, $8,807,592 and $10,298,087,
respectively
45,031,309
73,971,056
94,782,876
Total redeemable securities
61,695,298
92,289,261
113,532,678
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock — $.01 par value:
	30,000,000 shares authorized, 7,881,771, 7,895,115 and 7,951,365
	shares issued and outstanding, respectively
78,818
78,951
79,515
Additional paid-in capital
30,573,552
31,970,196
31,952,738
Stock subscriptions receivable
(2,974,804
)
(2,974,804
)
(2,974,804
)
Accumulated deficit
(75,952,861
)
(118,054,289
)
(124,242,958
)
Total stockholders' equity (deficit)
(48,275,295
)
(88,979,946
)
(95,185,509
)
Total liabilities, redeemable securities and
	stockholders' equity (deficit)
$
32,065,821
$
35,388,444
$
44,987,449
The accompanying notes are an integral part of
these consolidated balance sheets.
F-4
Table of Contents
COSI, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
For the Years Ended
For the Three Months Ended
January 3,
January 1,
December 31,
April 2,
April 1,
2000
2001
2001
2001
2002
(unaudited)
NET SALES
$
37,262,174
$
51,222,818
$
70,184,136
$
15,855,850
$
18,052,054
COST OF SALES:
Cost of goods sold
10,838,564
13,843,992
18,791,711
4,205,619
4,853,441
Restaurant operating expenses
22,236,154
32,172,860
45,114,495
9,976,081
11,126,978
TOTAL COST OF SALES
33,074,718
46,016,852
63,906,206
14,181,700
15,980,419
GENERAL AND ADMINISTRATIVE EXPENSES
14,024,240
14,774,234
18,361,511
3,735,134
4,620,306
DEPRECIATION AND
AMORTIZATION
3,155,186
6,158,146
6,689,985
2,021,879
1,210,250
RESTAURANT PRE-OPENING EXPENSES
661,356
1,409,497
1,438,783
253,600
111,361
PROVISION FOR LOSSES ON ASSET IMPAIRMENTS AND
	DISPOSALS
4,208,708
5,847,545
8,486,309
90,445
—
MERGER COSTS AND RELATED EXPENSES
8,958,748
—
—
—
—
LEASE TERMINATION COSTS
3,437,146
477,266
6,410,759
578,245
—
STOCK COMPENSATION
4,512,571
—
—
—
—
Operating loss
(34,770,499
)
(23,460,722
)
(35,109,417
)
(5,005,153
)
(3,870,282
)
INTEREST INCOME
478,635
441,350
340,453
60,699
29,922
INTEREST EXPENSE
(206,182
)
(210,655
)
(654,379
)
(98,394
)
(387,874
)
Net loss
(34,498,046
)
(23,230,027
)
(35,423,343
)
(5,042,848
)
(4,228,234
)
PREFERRED STOCK DIVIDENDS
(2,561,237
)
(4,219,684
)
(6,678,085
)
(1,312,694
)
(1,960,435
)
NET LOSS ATTRIBUTABLE TO COMMON STOCK
$
(37,059,283
)
$
(27,449,711
)
$
(42,101,428
)
$
(6,355,542
)
$
(6,188,669
)
PER SHARE DATA:
Net Loss Per Share:
Basic and diluted
$
(5.02
)
$
(3.48
)
$
(5.34
)
$
(0.81
)
$
(0.78
)
Pro Forma basic and diluted (Note 16)
$
(2.12
)
$
(0.23
)
Weighted Average Common Shares
Outstanding:
Actual
7,375,684
7,881,759
7,887,842
7,882,134
7,923,240
Pro Forma (Note 16)
16,676,459
18,557,792
The accompanying notes are an integral part of
these consolidated statements.
F-5
Table of Contents
COSI, INC.
CONSOLIDATED STATEMENTS OF REDEEMABLE
SECURITIES AND STOCKHOLDERS' EQUITY
For the Years Ended JANUARY 3, 2000,
JANUARY 1, 2001 and DECEMBER 31, 2001
and for the Three Months Ended April 1,
2002
Redeemable Securities
Series A Convertible
Series B Convertible
Series C Convertible
Preferred Stock
Preferred Stock
Preferred Stock
Total
Number of
Number of
Number of
Redeemable
Shares
Amount
Shares
Amount
Shares
Amount
Securities
BALANCE, December 28, 1998
1,998,718
$
13,705,739
457,662
$
2,974,804
—
$
—
$
16,680,543
Issuance of common stock
—
—
—
—
—
—
—
Issuance of preferred stock
7,144
50,000
(457,662
)
(2,974,804
)
2,351,420
19,987,062
17,062,258
Conversion of preferred stock
—
—
—
—
(130,703
)
(1,155,415
)
(1,155,415
)
Issuance of warrants
—
—
—
—
—
—
—
Costs of preferred stock issuance
—
—
—
—
—
(128,113
)
(128,113
)
Compensation relating to stock option
—
—
—
—
—
—
—
Compensation relating to subscriptions receivable
—
—
—
—
—
—
—
Accrued preferred stock dividend
—
1,137,944
—
—
—
1,177,005
2,314,949
Accretion of preferred stock to liquidation value
—
224,936
—
—
—
21,352
246,288
Net loss
—
—
—
—
—
—
—
BALANCE, January 3, 2000
2,005,862
15,118,619
—
—
2,220,717
19,901,891
35,020,510
Issuance of Series C convertible preferred
	stock, net of issuance costs
—
—
—
—
2,497,139
22,455,104
22,455,104
Accrued preferred stock dividend
—
1,320,434
—
—
—
2,649,775
3,970,209
Accretion of preferred stock to liquidation value
—
224,936
—
—
—
24,539
249,475
Issuance of common stock
—
—
—
—
—
—
—
Net loss
—
—
—
—
—
—
—
BALANCE, January 1, 2001
2,005,862
16,663,989
—
—
4,717,856
45,031,309
61,695,298
Issuance of Series C convertible preferred
	stock, net of issuance costs
—
—
—
—
2,564,926
23,915,878
23,915,878
Issuance of warrants
—
—
—
—
—
—
—
Noncash compensation expense
—
—
—
—
—
—
—
Accrued preferred stock dividend
—
1,429,280
—
—
—
4,980,812
6,410,092
Accretion of preferred stock to liquidation value
—
224,936
—
—
—
43,057
267,993
Issuance of common stock
—
—
—
—
—
—
—
Net loss
—
—
—
—
—
—
—
BALANCE, December 31, 2001
2,005,862
18,318,205
—
—
7,282,782
73,971,056
92,289,261
Issuance of Series C convertible preferred
	stock, net of issuance costs
—
—
—
—
1,649,600
15,669,907
15,669,907
Issuance of warrants
—
—
—
—
—
—
—
Accrued preferred stock dividend
—
375,363
—
—
—
1,490,495
1,865,858
Accretion of preferred stock to liquidation value
—
56,234
—
—
38,343
94,577
Conversion of senior subordinated debt to
	Series C Convertible Preferred Stock (Note 16)
—
—
—
—
380,323
3,613,075
3,613,075
Issuance of common stock
—
—
—
—
—
—
—
Net loss
—
—
—
—
—
—
—
BALANCE, April 1, 2002 (unaudited)
2,005,862
$
18,749,802
—
$
—
9,312,705
$
94,782,876
$
113,532,678
[Additional columns below]
[Continued from above table, first column(s) repeated]
Common Stock
Additional
Stock
Number of
Paid-In
Subscriptions
Accumulated
Shares
Amount
Capital
Receivable
Deficit
Total
BALANCE, December 28, 1998
6,599,066
$
65,990
$
17,730,781
$
(2,974,804
)
$
(11,443,867
)
$
3,378,100
Issuance of common stock
694,245
6,942
4,117,001
—
—
4,123,943
Issuance of preferred stock
—
—
—
—
—
—
Conversion of preferred stock
588,365
5,885
4,124,335
—
—
4,130,220
Issuance of warrants
—
—
88,230
—
—
88,230
Costs of preferred stock issuance
—
—
—
—
—
—
Compensation relating to stock option
—
—
4,412,458
—
—
4,412,458
Compensation relating to subscriptions receivable
—
—
100,113
—
—
100,113
Accrued preferred stock dividend
—
—
—
—
(2,314,949
)
(2,314,949
)
Accretion of preferred stock to liquidation value
—
—
—
—
(246,288
)
(246,288
)
Net loss
—
—
—
—
(34,498,046
)
(34,498,046
)
BALANCE, January 3, 2000
7,881,676
78,817
30,572,918
(2,974,804
)
(48,503,150
)
(20,826,219
)
Issuance of Series C convertible preferred
	stock, net of issuance costs
—
—
—
—
—
—
Accrued preferred stock dividend
—
—
—
—
(3,970,209
)
(3,970,209
)
Accretion of preferred stock to liquidation value
—
—
—
—
(249,475
)
(249,475
)
Issuance of common stock
95
1
634
—
—
635
Net loss
—
—
—
—
(23,230,027
)
(23,230,027
)
BALANCE, January 1, 2001
7,881,771
78,818
30,573,552
(2,974,804
)
(75,952,861
)
(48,275,295
)
Issuance of Series C convertible preferred
	stock, net of issuance costs
—
—
—
—
—
—
Issuance of warrants
—
—
1,098,469
—
—
1,098,469
Noncash compensation expense
—
—
231,631
—
—
231,631
Accrued preferred stock dividend
—
—
—
—
(6,410,092
)
(6,410,092
)
Accretion of preferred stock to liquidation value
—
—
—
—
(267,993
)
(267,993
)
Issuance of common stock
13,344
133
66,544
—
—
66,677
Net loss
—
—
—
—
(35,423,343
)
(35,423,343
)
BALANCE, December 31, 2001
7,895,115
78,951
31,970,196
(2,974,804
)
(118,054,289
)
(88,979,946
)
Issuance of Series C convertible preferred
	stock, net of issuance costs
—
—
—
—
—
—
Issuance of warrants
—
—
61,407
61,407
Accrued preferred stock dividend
—
—
—
—
(1,865,858
)
(1,865,858
)
Accretion of preferred stock to liquidation value
—
—
—
—
(94,577
)
(94,577
)
Conversion of senior subordinated debt to
	Series C Convertible Preferred Stock (Note 16)
—
—
(429,865
)
—
—
(429,865
)
Issuance of common stock
56,250
564
351,000
—
351,564
Net loss
—
—
—
—
(4,228,234
)
(4,228,234
)
BALANCE, April 1, 2002 (unaudited)
7,951,365
$
79,515
$
31,952,738
$
(2,974,804
)
$
(124,242,958
)
$
(95,185,509
)
The accompanying notes are an integral part of
these consolidated statements.
F-6
Table of Contents
COSI, INC.
CONSOLIDATED STATEMENTS OF CASH
FLOWS
For the Years Ended
For the Three Months Ended
January 3,
January 1,
December 31,
April 2,
April 1,
2000
2001
2001
2001
2002
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(34,498,046
)
$
(23,230,027
)
$
(35,423,343
)
$
(5,042,848
)
$
(4,228,234
)
Adjustments to reconcile net loss to net cash
	used in operating activities:
Depreciation and amortization
3,155,186
6,158,146
6,689,985
2,021,879
1,210,250
Asset impairments and disposals
12,410,599
5,847,545
9,933,142
59,701
—
Writedown of financing charges
88,230
—
—
—
—
Provision for bad debts
306,925
73,330
—
—
—
Stock compensation expense
4,512,571
—
—
—
—
Changes in operating assets and liabilities:
Accounts receivable
(245,598
)
(1,653,944
)
765,761
(219,301
)
382,869
Inventory
(108,841
)
(397,048
)
(492,934
)
(66,278
)
(49,007
)
Other assets
—
667,935
(409,413
)
5,309
(41,956
)
Accounts payable
(925,196
)
2,282,931
918,150
(1,929,135
)
(2,362,623
)
Accrued liabilities
2,099,059
2,358,273
(255,229
)
(392,582
)
(46,811
)
Accrued merger and integration
639,300
(639,300
)
—
—
—
Accrued contractual lease increases
831,784
628,401
825,772
216,931
190,577
Prepaid expenses and other current assets
(242,815
)
(198,203
)
(53,084
)
(157,142
)
(277,270
)
Lease termination accrual
3,437,146
(437,146
)
5,201,674
578,245
(127,267
)
Net cash used in operating activities
(8,539,696
)
(8,539,107
)
(12,299,519
)
(4,925,221
)
(5,349,472
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, equipment and leasehold
	improvements
(13,795,532
)
(18,161,055
)
(20,350,590
)
(5,418,893
)
(2,725,456
)
Payments made for security deposits
(224,775
)
(186,693
)
—
—
—
Payments made for intangible and other assets
(721,991
)
—
—
—
—
Net cash used in investing activities
(14,742,298
)
(18,347,748
)
(20,350,590
)
(5,418,893
)
(2,725,456
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock
4,123,943
635
66,677
5,082
351,564
Net proceeds from issuance of preferred stock
18,408,949
22,455,104
24,147,494
15,072,740
15,669,907
Proceeds from bridge financing notes
1,500,000
—
—
—
—
Principal payments on capital lease obligations
(237,981
)
(303,783
)
(572,060
)
(116,775
)
(154,110
)
Proceeds from long-term debt
—
2,998,977
9,269,213
—
772,557
Principal payments on long-term debt
(21,740
)
(186,947
)
(854,516
)
(149,426
)
(466,556
)
Net cash provided by financing activities
23,773,171
24,963,986
32,056,808
14,811,621
16,173,362
Net increase (decrease) in cash
491,177
(1,922,869
)
(593,301
)
4,467,507
8,098,434
CASH AND CASH EQUIVALENTS, beginning of year
6,494,564
6,985,741
5,062,872
5,062,872
4,469,571
CASH AND CASH EQUIVALENTS, end of year
$
6,985,741
$
5,062,872
$
4,469,571
$
9,530,379
$
12,568,005
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest
$
117,952
$
220,492
$
466,764
$
98,394
$
88,751
Corporate franchise and income taxes
$
68,111
$
7,931
$
277,198
$
80,337
$
14,585
Non-cash financing transactions:
Assets acquired under capital leases
$
915,799
$
134,678
$
—
$
—
$
—
Conversion of Senior Subordinated Debt to
	Series C Preferred
$
—
$
—
$
—
$
—
$
3,183,210
Conversion of Warrants to Series C Preferred
$
—
$
—
$
—
$
—
$
429,864
The accompanying notes are an integral part of
these consolidated statements.
F-7
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
January 3, 2000, January 1, 2001 and
December 31, 2001
1.     Description
and Organization of Business
Cosi, Inc. and subsidiaries (the
"Company" or "Cosi"), formerly known as
Xando Cosi, Inc., engages in the business of operating
restaurants, which sell high-quality coffees and sandwiches
along with a variety of coffee beverages, teas, baked goods and
alcoholic beverages. As of December 31, 2001, the Company
had 67 restaurants in operation in Connecticut, New York,
the District of Columbia, Pennsylvania, Maryland, Massachusetts,
Virginia, Illinois, New Jersey, Michigan, Ohio and
Wisconsin.
On October 4, 1999, a wholly-owned
subsidiary of the Company merged with Cosi Sandwich Bar, Inc.
("Cosi SB"). The merger was accounted for as a
pooling of interests (Note 3).
2.     Summary of
Significant Accounting Policies
Fiscal Year
End
The Company's fiscal year ends on the Monday
closest to December 31. Fiscal years 1999, 2000 and 2001
ended on January 3, 2000, January 1, 2001 and
December 31, 2001, respectively. Fiscal 1999 contained
53 weeks and fiscal 2000 and 2001 each contained
52 weeks.
Principles of
Consolidation
The consolidated financial statements include the
accounts of the Company and its wholly owned subsidiaries. All
intercompany accounts and transactions have been eliminated in
consolidation.
Cash and Cash
Equivalents
The Company considers all short-term liquid
investments with a maturity of three months or less when
purchased to be cash equivalents. At December 31, 2001 and
January 1, 2001, $1.4 million and $2.8 million,
respectively, was invested primarily in commercial paper and
money market accounts and is classified as cash and cash
equivalents in the accompanying consolidated balance sheets.
Concentrations
of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist principally
of cash deposits and accounts receivable. The Company places its
cash deposits in FDIC insured financial institutions, commercial
paper and money market funds. Cash deposits may exceed FDIC
insured levels from time to time.
The Company's accounts receivable consist
principally of receivables from trade or "house"
accounts representing corporate customers, as well as amounts
due from certain landlords for tenant improvement
reimbursements. The Company has established credit procedures,
whereby analyses are performed to control the granting of credit
to customers.
Inventory
Inventory is stated at the lower of cost (first
in, first out method) or market, and consists principally of
whole bean coffee, liquor, sandwich ingredients and packaging
and related food supplies.
Property,
Equipment and Leasehold Improvements
Property, equipment and leasehold improvements
are stated at cost and include improvements and costs incurred
in the development and construction of new restaurants and
remodels, equipment and leasehold improvements. Depreciation is
computed using the straight-line method over estimated useful
lives, which
F-8
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
range from two to fifteen years. Leasehold
improvements are amortized using the straight-line method over
the shorter of their estimated useful lives or the term of the
related leases.
In accordance with Statement of Financial
Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of," impairment losses are
recorded on long-lived assets on a restaurant by restaurant
basis whenever impairment factors are determined to be present.
The Company considers a history of restaurant operating losses
to be its primary indicator of potential impairment for
individual restaurant locations. The Company has identified
certain units that have been impaired, and recorded charges of
approximately $4.2 million, $5.8 million and
$7.2 million in the statements of operations for fiscal
years 1999, 2000 and 2001, respectively.
Intangibles,
Security Deposits and Other Assets
Intangibles and other assets consist of
expenditures associated with obtaining liquor licenses,
trademarks and logos. Liquor licenses are stated at cost which,
in the aggregate, is not in excess of market. Certain of the
liquor licenses have unlimited lives provided that they are
renewed annually and, accordingly, the costs of those liquor
licenses are not amortized. Security deposits primarily consist
of deposits placed on leased locations. Amortization expense
related to intangibles and other assets amounted to
approximately $27,000, $8,400 and $9,400, for fiscal years 1999,
2000 and 2001, respectively.
The Company reviews intangible assets for
impairment, whenever events or changes in circumstances indicate
that the carrying amounts of those assets may not be
recoverable. Management believes that there is no impairment
with respect to such intangible assets at December 31, 2001
or January 1, 2001.
Income
Taxes
The Company accounts for income taxes in
accordance with the provisions of SFAS No. 109,
"Accounting for Income Taxes". Deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit
carry-forwards. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in
the year in which those temporary differences are expected to be
recovered or settled.
Revenue
Recognition
The Company records revenue at the time of the
purchase of its products by its customers.
In December 1999, the SEC staff released
Staff Accounting Bulletin ("SAB") No. 101,
"Revenue Recognition," which provides guidance on the
recognition, presentation and disclosure of revenue in financial
statements. SAB No. 101 explains the SEC staff's
general framework for recognizing revenue and specific criteria
to be met, along with required disclosures related to revenue
recognition. Adoption of SAB No. 101 in fiscal 2000 did not
have a material impact on the Company's financial position
or results of its operations.
Fair Value of
Financial Instruments
The Company accounts for financial instruments in
accordance with SFAS No. 107, "Disclosures about Fair
Value of Financial Instruments". The carrying value of all
financial instruments reflected in the accompanying balance
sheet approximates fair value at January 1, 2001 and
December 31, 2001.
Stock-Based
Compensation
The Company complies with the disclosure-only
provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation". This statement establishes
financial accounting and reporting standards for stock-based
F-9
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
employee compensation plans. The provisions of
SFAS No. 123 encourage entities to adopt a fair value based
method of accounting for stock compensation plans; however,
these provisions also permit the Company to continue to measure
compensation costs under pre-existing accounting pronouncements.
Pursuant to SFAS No. 123, the Company has elected to
continue the accounting set forth in Accounting Principles Board
("APB") Opinion No. 25, "Accounting for
Stock Issued to Employees" and to provide the necessary pro
forma disclosures (Not 11).
In March 2000, the Financial Accounting
Standards Board ("FASB") released Interpretation
No. 44, "Accounting for Certain Transactions involving
Stock Compensation: an Interpretation of APB
Opinion 25". Interpretation No. 44 provides
clarification of certain issues, such as the determination of
who is an employee, the criteria for determining whether a plan
qualifies as a non-compensatory plan, the accounting
consequences of various modifications to the terms of a
previously fixed stock option award and the accounting for an
exchange of stock compensation awards in a business combination.
The Company believes that its practices are in conformity with
this guidance and, accordingly, the adoption of the provisions
of Interpretation No. 44 did not have a material impact on
its financial statements.
Net Loss Per
Share
The Company follows the provisions of SFAS
No. 128, "Earnings Per Share". In accordance with
this statement, basic net loss per share is computed by dividing
the net loss attributable to common shareholders (after
deducting preferred stock dividends) by the weighted-average
number of common shares outstanding. Diluted net loss per share
is computed by dividing the net loss attributable to common
shareholders by the weighted-average number of common shares and
dilutive common share equivalents, if any, outstanding. For all
periods presented, the impact of all common share equivalents
has not been included, as their inclusion would be
anti-dilutive. See Note 16 for a description of the
calculation of pro forma net loss per share for fiscal 2001.
Segment
Disclosures
The Company has adopted the provisions of SFAS
No. 131, "Disclosures About Segments of an Enterprise
and Related Information". Pursuant to this pronouncement,
operating segments are defined as components of an enterprise
about which separate financial information is available and is
evaluated regularly by the chief operating decision maker in
deciding how to allocate resources in assessing performance.
Management of the Company considers its operations to be in the
food service industry and, as a result, the Company has one
single reporting operating unit with all sales historically
generated in the United States.
Pre-Opening
Costs
All costs incurred prior to the opening of a
location, which consist primarily of salaries and other direct
expenses incurred with the initial setup of restaurants and
certain costs related to remodels, employee training and general
restaurant management, are expensed as incurred.
Advertising
Costs
Advertising costs are expensed as incurred and
approximated $206,000, $177,000 and $141,000 for fiscal years
1999, 2000, 2001, respectively.
Comprehensive
Income
The Company follows the provisions of SFAS
No. 130, "Reporting Comprehensive Income", which
requires companies to report all changes in equity during a
period, except those resulting from investment by owners and
distributions to owners, for the period in which they are
recognized. Comprehensive (loss) income
F-10
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
is the total of net (loss) income and all
other nonowner changes in equity (or other comprehensive
income), such as unrealized gains or losses on securities
classified as available-for-sale, foreign currency translation
adjustments and minimum pension liability adjustments.
Comprehensive income must be reported on the face of the
consolidated statements of operations or the consolidated
statements of stockholders' equity. The Company's
operations did not give rise to items includable in
comprehensive income that were not already in its net loss for
fiscal years 1999, 2000 and 2001. Accordingly, the
Company's comprehensive loss is the same as its net loss
for all periods presented.
Reclassifications
Certain items in the financial statements
presented have been reclassified to conform to the fiscal 2001
presentation.
Recently
Issued Accounting Pronouncements
In June 1998, the FASB issued SFAS
No. 133, "Accounting for Derivative Instruments and
Hedging Activities," which establishes accounting and
reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and
for hedging activities. SFAS No. 133, as amended by SFAS
No. 137 and SFAS No. 138, is effective for all fiscal
years beginning after June 15, 2000 and will not require
retroactive restatement of prior period financial statements.
This statement requires the recognition of all derivative
instruments as either assets or liabilities in the balance
sheet, measured at fair value. Derivative instruments will be
recognized as gains or losses in the period of change. The
adoption of SFAS No. 133 during fiscal 2001 did not have a
material impact on the Company's financial position or
results of its operations.
In July 2001, the FASB issued SFAS
No. 141, "Business Combinations" and
No. 142, "Goodwill and Other Intangible Assets".
SFAS 141 requires all business combinations initiated after
June 30, 2001 to be accounted for using the purchase
method. Under SFAS 142, goodwill and intangible assets with
indefinite lives are no longer amortized but are reviewed
annually (or more frequently if impairment indicators arise) for
impairment. Separable intangible assets that are not deemed to
have indefinite lives will continue to be amortized over their
useful lives (but with no maximum life) adoption of these
standards in fiscal 2002 will not have a material impact on the
Company's financial statements, principally because the
Company's significant business combination (Note 3)
was accounted for under the pooling-of-interests method of
accounting in which no goodwill was recorded. The Company's
intangibles consist of expenditures associated with obtaining
liquor licenses, trademarks and logos. These identifiable
intangibles have indefinite lives and, accordingly, will no
longer be amortized effective January 1, 2002 upon adoption
of this Statement.
In June 2001, the FASB issued SFAS
No. 143, "Accounting for Asset Retirement
Obligations". This statement addresses financial and
reporting obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. It
applies to legal obligations associated with the retirement of
long-lived assets that result from acquisition, construction,
development and/or the normal operation of a long-lived asset,
except for certain obligations of lessees. This statement is
effective for financial statements issued for fiscal years
beginning after June 15, 2002. The Company believes
adoption of SFAS 143 will not have a material effect on its
financial position or results of operations.
In August 2001, the FASB issued SFAS
No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets". SFAS 144 supercedes SFAS 121 and APB
Opinion No. 30, "Reporting Results of Operations-
Reporting the Effects of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions." This statement retains the fundamental
provisions of SFAS 121 for recognition and measurement of
impairment, but amends the accounting and reporting standards
for segments of a business to be disposed of. The provisions of
this statement are required to be adopted no later than fiscal
years beginning after December 31, 2001. The Company is
currently evaluating the effects of this
F-11
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
statement, which the Company does not believe
will have a material impact on the Company's financial
position or results of its operations.
Use of
Estimates
The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States requires management to make estimates and
assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results may differ
from those estimates.
3.     Merger and
Related Costs
On October 4, 1999, Cosi SB merged with and
into a wholly owned subsidiary of the Company. As a result of
the merger, Cosi SB became a wholly owned subsidiary of the
Company. The former Cosi SB shareholders were entitled to
receive 11.237 shares of the Company's common stock for
each share of Cosi SB common stock. As a result, Cosi SB
shareholders received 3,655,093 shares of the Company's
common stock. In addition, outstanding Cosi SB stock options
were converted at the same exchange factor into options to
purchase approximately 1,811,921 shares of the Company's
common stock. The merger was intended to qualify as a tax-free
reorganization and was accounted for under the
pooling-of-interests accounting method.
In connection with the merger, the Company
recorded costs and expenses of approximately $894,000,
principally for legal and accounting services. Additionally, the
Company wrote down the book value of certain property, equipment
and leaseholds with a net book value of approximately $8.1
million to recognize an impairment due to facility consolidation
and renovation and reconfiguration of certain restaurant
locations.
Costs incurred to recognize certain severance,
systems integration and relocation amounted to approximately
$812,000 during fiscal 1999.
For fiscal 1999 revenues and net loss of Xando
and Cosi included in the financial statements are as follows:
Fiscal Year 1999
Revenues:
Xando
$
16,626,158
Cosi
20,636,016
$
37,262,174
Net Loss:
Xando
$
(27,418,618
)
Cosi
(7,079,428
)
$
(34,498,046
)
F-12
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
4.     Accounts
Receivable, net
Accounts receivable, net, consists of the
following:
January 1,
December 31,
2001
2001
Accounts receivable, trade
$
828,095
$
657,102
Reimbursements due from landlords
1,360,539
482,548
Other
142,951
278,981
2,331,585
1,418,631
Less: allowance for doubtful accounts
(367,038
)
(219,845
)
Accounts receivable
$
1,964,547
$
1,198,786
5.     Property,
Equipment and Leasehold Improvements
Property, equipment and leasehold improvements
consist of the following:
January 1,
December 31,
2001
2001
Leasehold improvements
$
18,825,166
$
23,216,827
Furniture and fixtures
4,306,431
6,279,777
Restaurant equipment
3,843,848
6,455,154
Computer and telephone equipment
4,146,204
5,600,702
Construction in progress
588,914
181,252
31,710,563
41,733,712
Less: accumulated depreciation and amortization
(9,929,356
)
(16,226,517
)
$
21,781,207
$
25,507,195
Depreciation and amortization expense for fiscal
years 1999, 2000 and 2001 was $3,128,172, $6,131,888 and
$6,680,585, respectively.
6.     Accrued
Liabilities
Accrued liabilities consists of the following:
January 1,
December 31,
2001
2001
Payroll and related benefits and taxes
$
1,060,734
$
2,043,941
Professional and legal costs
232,600
188,581
Taxes payable
321,119
473,022
Other
3,588,376
2,246,265
$
5,202,829
$
4,951,809
7.     Long-Term
Debt
Notes
Payable
The Company maintains a credit facility in the
original amount of $3 million under a Master Loan and Security
Agreement dated October 28, 1999 (the "Equipment Loan
Credit Facility"). The proceeds are required to be used for
the purchases of equipment. Borrowings are secured by the
equipment purchased.
F-13
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Each borrowing under the Equipment Loan Credit
Facility is payable over 36 months and the interest rate is
determined at the time of the borrowing. Warrants to purchase
shares of Series C Convertible Preferred Stock were issued
in connection with the Credit Facility. The warrants entitle the
holder to acquire 14,118 shares of the Company's
Series C Convertible Preferred Stock for $8.50 per share.
As of December 31, 2001, there were two notes payable
outstanding under the Equipment Loan Credit Facility. The note
payable due September 1, 2003 requires monthly payments of
$35,949, which commenced in October 2000, and accrues
interest at a rate of 9.10% per annum. The note payable due
December 1, 2003 requires monthly payments of $58,361,
which commenced in December 2001, and accrues interest at a rate
of 8.50% per annum.
In addition to the monthly payments, the Company
is required to pay loan fees of $113,738 and $186,158,
respectively, which are due September 1, 2003 and
December 1, 2003, respectively. The Company is amortizing
these loan fees as additional interest expense over the term of
the notes.
In addition to the credit facility, the Company
has an outstanding note payable of approximately $174,000. The
note is due March 2007 and requires monthly payments of $3,097,
which commenced in May 1998, and accrues interest at a rate of
10% per year.
Senior
Subordinated Debt
In November 2001, the Company issued
approximately $9 million of senior subordinated notes along
with detachable warrants. The notes bear interest at 13% per
annum, compounded quarterly and payable in arrears, and will
mature in 5 years. Interest is payable at maturity of the
notes. The holders of the notes have the right to obtain payment
in cash for the accrued but unpaid interest eighteen months from
the date of issuance of the notes provided written notice
("Notice") is given to the Company. Should that occur,
the interest rate would be retroactively reduced to 11.5%
compounded quarterly from the date of issuance through the
Notice date, and thereafter. The Company also has the right to
pre-pay its obligation under the notes by incurring a prepayment
premium, as defined, on the outstanding principal plus accrued
but unpaid interest. Additionally, the notes will be subject to
a mandatory prepayment at the election of the Company or the
holders at any time after the earliest of (i) a material
change in ownership, as defined, (ii) a merger or sale of
substantially all of the Company's assets, (iii) a
substantial change in corporate structure, as defined, or
(iv) a default by the Company, as defined. The warrants are
exercisable at $.01 per common share and are exercisable for a
period of 5 years from the date of issuance. The fair value
ascribed to the warrants was $1,079,808. The value assigned to
the warrants is being recognized as interest expense over the
term of the notes.
Maturities of long-term debt during the next five
fiscal years and thereafter are as follows:
2002
$
1,136,835
2003
1,296,912
2004
41,434
2005
45,439
2006
9,015,877
Thereafter
111,942
11,648,439
Less: Current maturities
(1,136,835
)
Unaccreted debt discount
(1,045,582
)
Long-term debt, net
$
9,466,022
F-14
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
8.     Capital Lease
Obligations
At December 31, 2001, the Company is
obligated under capital leases for certain restaurant equipment
with an original cost of $2,019,144. The leases expire at
various dates through 2004. The following is a schedule of
future minimum lease payments for capital leases as of
December 31, 2001:
2002
$
480,007
2003
138,287
2004
2,929
Total lease payments
621,223
Less: amount representing interest
44,125
Present value of net capital lease payments
577,098
Less: current portion
441,862
Long-term portion
$
135,236
9.     Income
Taxes
Significant components of the Company's
deferred tax assets are as follows:
January 1,
December 31,
2001
2001
Deferred tax assets:
Net operating loss carryforward
$
13,611,490
$
18,577,446
Deferred compensation
1,669,651
1,669,651
Depreciation expense and Impairment of Long-Lived
	Assets
6,151,633
10,139,945
Lease termination accrual
1,110,000
3,034,619
Allowance for doubtful accounts
135,804
81,343
Contractual lease increases
807,635
1,113,171
Accrued expenses
288,758
238,190
Other assets
6,973
6,973
Total deferred tax assets
23,781,944
34,861,338
Valuation allowance
(23,781,944
)
(34,861,338
)
Net deferred taxes
$
—
$
—
As of December 31, 2001, the Company has
Federal net operating tax loss carryforwards of approximately
$50.2 million, which if not used, will expire through 2021.
Utilization of the net operating losses may be subject to an
annual limitation due to the change in ownership provisions of
the Internal Revenue Code and similar state provisions. These
annual limitations may result in the expiration of these net
operating losses before their utilization. The Company has
recorded a valuation allowance to offset the benefit associated
with the deferred tax assets noted above due to the uncertainty
of realizing the related benefits.
10.     Capitalization
Change in
Authorized Number of Shares
On September 29, 2001, the Corporation
amended its Certificate of Incorporation to increase the
authorized capital stock from 25,226,580 shares to 45,673,947,
of which 30,000,000 shares will be Common Stock and 15,673,947
shares will be Preferred Stock, designated as follows: 2,005,862
shares of Series A
F-15
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
convertible preferred stock, 10,510,191 shares of
Series C convertible preferred stock and 3,157,894 shares
to be designated by the Board of Directors.
Redeemable
Securities
Series A
Convertible Preferred Stock
In connection with the Series A Convertible
Preferred Stock Purchase Agreement (the "Series A
Purchase Agreement") dated April 28, 1998, the Company
issued 1,998,718 shares of Series A Convertible Preferred
Stock (the "Series A") for approximately
$14 million. The proceeds were reduced by $351,800 for
closing costs. The Series A Purchase Agreement provides for
the issuance of one warrant to purchase one share of the
Company's Common Stock at an exercise price of $.01 (the
"Warrants") for each 13 shares of Series A
issued. The Warrants are exercisable for a period of ten years
from the date of issuance and will expire on the earlier of
(i) the completion of a qualified public offering, as
defined or (ii) the redemption of all of the Series A.
The Company allocated $997,818 of the proceeds to the warrants
to recognize their fair value. In November 1999, the Company
issued an additional 7,144 shares of Series A for $50,000,
based on the same terms and conditions. No additional warrants
were issued.
Series B
Convertible Preferred Stock
Contemporaneously with the Series A Purchase
Agreement, the Company issued 457,662 shares of Series B
Convertible Preferred Stock (the "Series B Executive
Stock") to certain officers of the Company in exchange for
promissory notes aggregating $2,974,804 pursuant to the terms of
an Executive Stock Agreement the "Executive
Agreement". The promissory notes accrue interest at an
annual rate of 5.75% and mature in April 2003. These notes
are included in stockholders' equity as stock subscriptions
receivable. The Executive Agreement provided that shares of
Series B vest at the rate of 25% per year or immediately
upon a qualified public offering. During 1999, the officers
converted the Series B Executive Stock into an equal number
of shares of common stock subject to the same vesting
provisions. In the event that the Company no longer employs the
stockholders, the Executive Agreement provides for certain
Company stock repurchases and/or stockholder put options.
Series C
Convertible Preferred Stock
On March 1, 1999, the Company entered into a
bridge financing arrangement (the "Agreement")
pursuant to which it issued Subordinated Promissory Notes (the
"Promissory Notes") aggregating $1.5 million
maturing on July 28, 1999. The Promissory Notes bear
interest at an escalating rate (ranging from 12% to 18%) based
on the number of days from the issuance of the Promissory Notes.
Warrants (the "Bridge Warrants") to purchase shares of
Series A Convertible Preferred Stock were issued in
connection with the Promissory Notes. The Bridge Warrants
entitle the holder to acquire a certain amount of the
Company's Series A Convertible Preferred Stock for a
price to be determined at the time of the Company's next
financing. The amount of preferred stock to be issued would be
based upon a price per share based on certain provisions in the
Agreement. At the time of the Company's March 30, 1999
financing, the terms of the Bridge Warrants were specified to be
for the purchase of 44,115 shares of Series A Convertible
Preferred Stock at $8.50 per share. The fair value of the Bridge
Warrants was determined using the Black-Scholes option-pricing
model and totaled $88,230. On March 30, 1999, the
Promissory Notes were exchanged for 176,471 shares of
Series C Convertible Preferred Stock. The value assigned to
the Bridge Warrants was recognized as interest expense and the
carrying amount of the Promissory Notes were converted to
Series C Convertible Preferred Stock upon conversion of the
Promissory Notes.
On March 30, 1999, in connection with the
1999 Series C Preferred Stock Purchase Agreement (the
"1999 Series C Purchase Agreement"), the Company
issued 2,351,420 shares of Series C convertible preferred
stock ("1999 Series C"), par value $0.01 per
share and received proceeds of approximately
F-16
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
$20 million (including the exchange for the
Company's Promissory Notes aggregating $1.5 million;
described above). The proceeds were reduced by $128,411 for
closing costs. During 1999, 130,703 shares of Series C were
converted to an equal number of shares of Common Stock.
During fiscal 2000, the Company issued an
aggregate of 2,497,139 shares of Series C, par value $.01
at $9.00 per share, ("2000 Series C"). The
Company received aggregate proceeds of approximately $22.4
million in April 2000, June 2000, and September 2000.
The terms of the issuance of 2000 Series C are the same as
the March 1999 issuance of 1999 Series C, with the
exception that the liquidation preference of the 2000
Series C is $9.00 per share.
During fiscal 2001, the Company issued 2,564,926
shares of Series C convertible preferred stock, par value
$.01. ("2001 Series C"). The Company received
proceeds of approximately $23.9 million, net of issuance
costs. The terms of the issuance of 2001 Series C are the
same as the previous issuances of Series C convertible
preferred stock, with the exception that the liquidation
preference is $9.50 per share.
Each share of Series A and Series C may
be converted into one share of Common Stock at any time at the
option of the Series A and the Series C convertible
preferred stockholders (the "Convertible Preferred
Stockholders"). Such conversion is based on a value of
$7.00, $8.50, $9.00 and $9.50 per share for 1999 Series A,
1999 Series C, 2000 Series C and 2001 Series C,
respectively, with such value adjusted, if necessary, in order
to prevent dilution. The value of accrued but unpaid dividends
is not convertible to common stock upon conversion. The
Series A and each of the 1999, 2000 and 2001 Series C
shares will be automatically converted into Common Stock upon
the earlier of (i) the completion of a qualified public
offering ("Offering"), or (ii) the written demand
of at least 60% of the then outstanding shares of each series of
the shares held by the Convertible Preferred Stockholders.
In the event this conversion does not occur, the
Series A and Series C may be redeemed any time after
April 1, 2004 and March 30, 2005, respectively, at the
option of the holders of at least a majority of then outstanding
shares at a price of $7.00, $8.50, $9.00 and $9.50, as
applicable, per share (the "Liquidation Value") plus
all accrued but unpaid dividends. As a result of the redemption
features, the Series A and Series C securities are
presented outside stockholders' equity in the accompanying
consolidated balance sheets.
Dividends on the Series A and the 1999, 2000
and 2001 Series C accrue at an annual rate of 8% on the sum
of the Liquidation Value plus all accumulated and unpaid
dividends whether or not they have been declared. In addition to
such dividends, the Convertible Preferred Stockholders are
entitled to participate in dividends declared to common
stockholders, if any, other than those dividends solely payable
in common stock. These dividends are based on amounts that would
have been declared and paid with respect to the Common Stock
issuable to the Convertible Preferred Stockholders upon the
conversion of all Series A and 1999, 2000 and 2001
Series C into common stock immediately prior to the record
date of such dividends. In the event of any liquidation,
dissolution or winding up of the Company, each Convertible
Preferred Stockholder will receive liquidation preferences in
the amount of the greater of (i) the Liquidation Value on
all shares of Series A and 1999, 2000 and 2001
Series C held plus all accrued and unpaid dividends or
(ii) such stockholders' pro rata share of the portion
of all liquidation proceeds payable to the common stockholders
after all required liquidation payments to the Series B
convertible preferred stockholders are made.
The holders of the Series A and 1999, 2000
and 2001 Series C are entitled to vote on all matters
submitted to all stockholders for a vote together with the
common stockholders, all voting together as a single class,
however, the Convertible Preferred Stockholders, voting as a
class, have the right to approve any mergers, acquisitions, and
sale of Company assets, dividends, distributions, stock
repurchases or issuance of any equity securities senior or equal
to the Series A and 1999, 2000 and 2001 Series C. The
Purchase Agreements for Series A, and for 1999, 2000 and
2001 Series C (the "Preferred Stock Purchase
F-17
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Agreements") and the Executive Agreement
provide for anti-dilution adjustments in connection with any
distribution of the Company's common stock.
Common Stock
Purchase Rights
On June 28, 2001, the Board of Directors
resolved to adopt a Shareholders' Rights Plan "Rights
Plan". The resolution provides that the Rights Plan will be
effective only upon the consummation of an Offering by the
Company. Upon an Offering a dividend distribution of one right
("Right") for each share of common stock, $.01 par
value per share of the Corporation will be made to stockholders.
Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of preferred stock of the
Company designated as Series D Preferred Stock at a price
of $100 per one one-hundredth of a share. The Board of Directors
also resolved to amend its certificate of incorporation,
effective upon the consummation of an Offering by the Company,
to designate 1,000,000 shares of Series D Preferred Stock
for such issuance. The Series D Preferred Stock
("Series D"), $.01 par value per share will be
nonredeemable and subordinated to any other series of the
Company's preferred stock.
Initially, the Rights will not be exercisable,
will not be represented by a separate certificate, and will not
be transferable apart from the common stock. The Rights become
exercisable, unless earlier redeemed, by each record holder upon
the close of business on the day which is the earlier of
(i) the tenth day following the first date there is public
announcement that a person or group of affiliated or associated
persons has acquired beneficial ownership of 15% or more of the
outstanding voting stock of the Company or such earlier date as
determined by the Board of Directors; or (ii) the tenth
business day after the announcement that a person or
group's intention to commence or engage in a tender or
exchange offer the consummation of which would result in the
ownership of 15% or more of the common stock of the Company by
this person or group.
11.     Stock Option
Plans
The Company has several stock option plans that
provide for the granting of incentive and nonqualified stock
options to participants, employees and non-employee directors,
to acquire Common Stock.
There are 6,350,126 shares of Common Stock
reserved for issuance under the Plans. Grants have been made at
fair market value (as determined by the Board of Directors) and
generally vest over a period of five years and expire ten years
from the date of the grant. The Board of Directors approves
vesting terms on an individual basis. The Company accounts for
stock option grants in accordance with APB Opinion No. 25,
"Accounting for Stock Issued to Employees."
F-18
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Activity with respect to the Company's stock
option plans for the years ended January 3, 2000,
January 1, 2001 and December 31, 2001 was as follows:
Number
Range of
Weighted Average
of Options
Exercise Price
Exercise Price
Balance as of December 28, 1999
1,965,664
$
0.89 - $6.25
$
4.095
Granted
618,537
$
5.097 - $7.00
$
6.507
Canceled/ Expired
(84,136
)
$
0.89 - $7.00
$
4.593
Balance as of January 3, 2000
2,500,065
$
0.89 - 10.75
$
4.675
Granted
1,432,906
$
7.00
$
7.00
Exercised
(95
)
$
6.25
$
6.25
Canceled/ Expired
(250,586
)
$
5.10 - 7.00
$
6.285
Balance as of January 1, 2001
3,682,290
$
0.89 - 10.75
$
5.495
Granted
2,410,159
$
7.00
$
7.00
Exercised
(9,360
)
$
3.03 - $7.00
$
4.176
Canceled/ Expired
(368,278
)
$
5.10 - $7.00
$
6.814
Balance as of December 31, 2001
5,714,811
$
0.89 - $10.75
$
6.064
There were approximately 1.7 million, 2.0 million
and 2.7 million options exercisable under the Plans as of
January 3, 2000, January 1, 2001 and December 31,
2001, respectively.
Had compensation cost for these programs been
determined based upon the fair value at the grant dates
consistent with SFAS No. 123, the Company's pro forma
net loss and net loss per common share would have been as
follows:
1999
2000
2001
Net loss attributable to common stock:
As reported
$
(37,059,283
)
$
(27,449,711
)
$
(42,101,428
)
Pro forma
(37,704,507
)
(28,020,683
)
(43,478,843
)
Net loss per common share — Basic and
	Diluted:
As reported
$
(5.02
)
$
(3.48
)
$
(5.34
)
Pro forma
$
(5.11
)
$
(3.56
)
$
(5.51
)
Pro Forma net loss per common share —
	Basic and Diluted:
As reported
$
(2.12
)
Pro forma
$
(2.21
)
The fair value of each option grant was estimated
on the date of grant using the Black-Scholes option-pricing
model with the following assumptions:
Fiscal Year Ended
1999
2000
2001
Expected volatility
—
—
—
Average expected option life
5 years
5 years
5 years
Average risk-free interest rate
5.13
%
6.37
%
4.57
%
Dividend yield
0
%
0
%
0
%
F-19
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Prior to the merger, certain officers of Cosi SB
had received compensatory nonqualified stock options, which were
exercisable upon the underlying shares reaching a targeted
market value. As a result of the merger, these options vested
and a charge to earnings of approximately $4.2 million was
recorded in fiscal year 1999.
Summarized information about the Company's
stock options outstanding and exercisable at December 31,
2001 is as follows:
Outstanding
Exercisable
Average
Average
Average
Exercise Price Range
Options
Life
Price
Options
Price
$0.89
299,657
4.59
$
0.89
299,657
$
0.89
$3.03
571,211
4.92
$
3.03
571,211
$
3.03
$5.10 - $6.25
1,040,654
6.28
$
5.53
1,001,087
$
5.50
$7.00
3,703,289
9.25
$
7.00
772,962
$
7.00
$8.50 - $10.75
100,000
5.75
$
9.06
100,000
$
9.06
5,714,811
7.97
$
6.05
2,744,917
$
5.04
12.     Defined
Contribution Plan
The Company has a 401(k) Plan (the
"Plan") for all qualified employees. The Plan provides
for a matching employer contribution of twenty-five percent of
up to four percent of the employees' deferred savings. The
employer contributions vest over five years. The deferred amount
cannot exceed fifteen percent of an individual
participant's compensation in any calendar year. The
Company's contribution to the Plan was $11,652, $21,635 and
$26,115 for fiscal years 1999, 2000 and 2001, respectively.
13.     Commitments
and Contingencies
Commitments
The Company is committed under lease agreements
expiring through 2014 for occupancy of its retail restaurants
that were open and operating on December 31, 2001 and for
office space at the following minimum annual rentals:
2002
$
9,892,528
2003
10,280,552
2004
10,465,417
2005
10,638,201
2006
10,517,367
Thereafter
44,429,054
Rental expense for the fiscal years ended 1999,
2000 and 2001 totaled $3,584,831, $6,184,680 and $9,096,207,
respectively. Certain lease agreements have renewal options
ranging from 3 years to 15 years. In addition, certain
leases obligate the Company to pay additional rent if restaurant
sales reach certain minimum levels (percentage rent). Amounts
incurred under these additional rent provisions were $203,776,
$174,402 and $168,451 for fiscal years 1999, 2000 and 2001,
respectively.
F-20
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
As of December 31, 2001, future minimum
rental payments required under non-cancelable operating leases
for retail restaurants, which were not yet opened as of
December 31, 2001, are as follows:
2002
$
361,532
2003
517,338
2004
517,338
2005
527,256
2006
534,574
Thereafter
2,437,319
Subsequent to year-end, the Company entered into
non-cancelable operating leases for future retail restaurant
locations with minimum rental payments as follows:
2002
$
46,549
2003
93,100
2003
93,100
2004
93,100
2005
93,100
Thereafter
562,450
Certain of the Company's lease agreements
provide for scheduled rent increases during the lease term, or
for rental payments commencing at a date other than the date of
initial occupancy. In accordance with SFAS No. 13,
"Accounting for Leases," rent expense is recognized on
a straight-line basis over the term of the respective leases.
The Company's obligation with respect to these scheduled
rent increases has been presented as a long-term liability in
the accompanying consolidated balance sheets.
As of December 31, 2001, the Company had
outstanding approximately $370,000 in standby letters of credit,
which were given as security deposits for certain of the lease
obligations. The letters of credit are fully secured by cash
deposits or marketable securities held in accounts at the
issuing banks. Such deposits are not available for withdrawal,
amounted to approximately $370,000 at December 31, 2001 and
are included as a component of Intangible, Security Deposits and
Other Assets on the accompanying consolidated financial
statements.
In fiscal 1999, 2000 and 2001, the Company
recorded a provision of approximately $3,437,000, $477,000 and
$6,411,000, respectively, relating to lease commitments for
restaurants the Company has closed or is committed to close.
During fiscal 2001, the Company made cash payments totaling
approximately $1,209,100 for those restaurants' leases.
As of December 31, 2001, future minimum
lease payments related to restaurants that have been closed or
are committed to be closed is approximately $16.9 million, with
remaining lease terms ranging from 7 to 13 years.
Other liabilities in the accompanying
consolidated balance sheet as of January 1, 2001 include
$3,000,000 in accrued lease termination costs (including a
current portion of $746,751) and $2,182,798 in accrued
contractual lease increases. Other liabilities as of
December 31, 2001 include $8,201,674 in accrued lease
termination costs (including a current portion of $1,678,880)
and $3,008,570 in accrued contractual lease increases.
During fiscal 2000, the Company entered into a
contract to sell a restaurant and assigned the lease to the
buyer. Simultaneously, the Company entered into a guaranty and
surety agreement whereby the Company has guaranteed the first
two years of rental payments to be made by the buyer. In the
event of default by the buyer, the Company will be reinstated as
the primary obligor under the lease.
F-21
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Purchase
Commitment
During fiscal year 1999, the Company entered into
an exclusive coffee supply agreement with an unrelated third
party ("Supplier"). The agreement calls for minimum
purchases, in terms of both quantity and price, to be made by
the Company of coffee beans and related products. The agreement
is in effect through December 2002 but may be terminated by
the Company or the Supplier provided 180 days notice is
given in advance of such termination.
Self-Insurance
The Company has a self-insured group health
insurance plan. The Company is responsible for all covered
claims to a maximum liability of $50,000 per participant during
a plan year. Benefits paid in excess of $50,000 are reimbursed
to the plan under the Company's stop loss policy. In
addition, the Company also has an aggregate stop loss policy
whereby the Company's liability for total claims submitted
cannot exceed a pre-determined dollar factor based upon, among
other things, past years' claims experience, actual claims
paid, the number of plan participants and monthly accumulated
aggregate deductibles. Group health insurance expense for the
fiscal years 1999, 2000 and 2001 was approximately $472,000,
$800,000 and $968,000, respectively.
Litigation
From time to time, the Company is a party to
litigation arising in the normal course of its business
operations. In the opinion of management and counsel, it is not
anticipated that the settlement or resolution of any such
matters will have a material adverse impact on the
Company's financial condition, liquidity or results of
operations.
Employment
Agreements
During fiscal 2002, the Company has entered into
employment agreements with certain officers and employees. The
term of each agreement is for three years with each agreement
expiring in 2005. The aggregate annual base salaries for the
three year term is $962,500.
14.     Related Party
Transactions
The Company incurs fees with a legal firm, a
partner of which is an owner of certain of the Company's
equity securities. This firm provides legal services on behalf
of the Company, which amounted to approximately $45,000, $41,000
and $71,000 for the fiscal years 1999, 2000 and 2001.
Furthermore, the Company engages a public relations firm that is
partially owned by a family member of a founding shareholder of
the Company. This firm provides public relations services to the
Company, which amounted to approximately $18,500, $67,000 and
$146,000 for fiscal years 1999, 2000 and 2001, respectively.
Management of the Company believes that these related party
transactions were effected on a basis that approximates fair
market value.
15.     Effect of the
Events of September 11, 2001
In September 2001, the Emerging Issues Task
Force reached a consensus regarding Issue No. 01-10,
"Accounting for the Impact of Terrorist Attacks of
September 11, 2001," which requires that losses and
other costs incurred as a result of the September 11, 2001,
events be classified as part of income from continuing
operations in the statement of operations.
As a result of the events of September 11,
2001, a Company owned restaurant location and a kiosk that had
operated in the World Trade Center in New York City were
destroyed. Additionally, due to its proximity to the World Trade
Center, another restaurant in the World Financial Center has
been closed. The Company
F-22
Table of Contents
COSI, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
and its insurer, and its insurance broker are in
disagreement over the amount of insurance coverage for these
locations. Consequently, approximately $1.3 million has
been included in the 2001 provisions for asset impairments and
disposals. The Company also maintains business interruption
insurance coverage for which it has submitted claims. No amounts
potentially reimbursable from business interruption policies
have been recognized in the accompanying financial statements.
Any amounts received from these policies will be recognized as
income when received or, earlier, if the Company's is
notified of the amount of claims approved by its insurers.
16.     Subsequent
Events
Sale of
Additional Securities
During the first quarter of fiscal 2002, the
Company issued approximately 1.6 million shares of
Series C convertible preferred stock, par value $.01
("2002 Series C"). The Company received proceeds
of approximately $15.7 million. The terms of the issuance
of 2002 Series C preferred convertible stock are the same
as the previous issuances, with the exception that the
liquidation preference is $9.50 per share.
Senior
Subordinated Debt
During the first quarter of fiscal 2002, the
Company issued $500,000 of senior subordinated notes with
detachable warrants. The fair value ascribed to the warrants was
$61,407. The terms of the notes and warrants issued are the same
as those issued during fiscal year 2001 (Note 7).
Conversion of
Senior Subordinated Debt
On February 20, 2002, holders of senior
subordinated debt and the Company converted senior subordinated
debt and warrants with a fair value of $3,638,149 into
380,323.67 shares of 2002 Series C Preferred Stock. The
gain on this early extinguishment of the subordinated debt was
not material to the unaudited results of operations for the
three months ended April 2, 2002.
Public
Offering
In February, the Company announced it is
considering an underwritten initial public offering of its
common stock. Upon the effectiveness of a public offering, the
Company's Series A and Series C convertible
preferred stock automatically converts to common stock.
Additionally, the Company intends to exercise its option to
require all outstanding warrants to be exercised. Accordingly,
pro forma per share data has been presented in the accompanying
statements of operations for fiscal 2001 and for the three
months ended April 2, 2002 (unaudited). Pro forma per share
information has been calculated before the effect of dividends
on preferred stock and by reflecting the weighted average shares
of preferred stock and warrants as common stock outstanding for
the respective periods.
17.     Unaudited
Interim Consolidated Financial Information
The unaudited consolidated financial information
for the three months ended April 2, 2001 and April 1,
2002 has been prepared in accordance with generally accepted
accounting principles for interim financial information. In the
opinion of the Company's management, these unaudited
consolidated financial statements reflect all adjustments
necessary, consisting of normal recurring adjustments, for a
fair presentation of such data on a basis consisted with that of
the audited data presented herein. The consolidated results of
operations for interim periods are not necessarily indicative of
results to be expected for a full year.
F-23
Table of Contents
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON
SCHEDULE
To Cosi, Inc.:
We have audited, in accordance with auditing
standards generally accepted in the United States, the
consolidated financial statements of Cosi, Inc. and subsidiaries
(formerly Xando Cosi, Inc., a Delaware corporation) included as
of January 1, 2001 and December 31, 2001, and for the
years then ended, in this filing and have issued our report
thereon dated April 2, 2002. Our audits were made for the
purposes of forming an opinion on the basic financial statements
taken as a whole. The accompanying schedule is the
responsibility of the Company's management and is presented
for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial
statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial
statements and, in our opinion, fairly states in all material
respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
/s/ ARTHUR ANDERSEN LLP
Melville, New York
April 2, 2002
S-1
Table of Contents
REPORT OF INDEPENDENT AUDITORS ON
SCHEDULE
The Board of Directors of Cosí, Inc.:
We have audited the consolidated statements of
operations, redeemable securities and stockholders' equity
and cash flows of Cosí, Inc. (formerly Xando Cosí,
Inc.) for the year ended January 3, 2000, and have issued
our report thereon dated November 19, 2000 (included
elsewhere in this Registration Statement). Our audit also
included Schedule II — Valuation and Qualifying
Accounts included in this Registration Statement. This schedule
is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audit.
In our opinion, the financial statement schedule
referred to above, when considered in relation to the basic
financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
/s/ ERNST & YOUNG LLP
Stamford, Connecticut
November 19, 2000
S-2
Table of Contents
SCHEDULE II
COSI, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
For the Three Years Ending December 31,
2001
Balance at
Charged to
Charged to
Beginning
Costs and
Other Accounts
Deductions
Balance at
Description
of Period
Expenses
(Describe)
(Describe)
End of Period
(in $000s)
JANUARY 3, 2000
Allowance for doubtful accounts receivable
62.8
300.0
—
(55.9
)(a)
306.9
Lease termination reserve
—
3,437.1
—
—
(b)
3,437.1
Accrued merger and integration costs
—
1,192.8
—
(553.5
)(c)
639.3
JANUARY 1, 2001
Allowance for doubtful accounts receivable
306.9
88.1
—
(28.0
)(a)
367.0
Lease termination reserve
3,437.1
477.3
—
(914.4
)(b)
3,000.0
Accrued merger and integration costs
639.3
55.7
—
(695.0
)(c)
—
DECEMBER 31, 2001
Allowance for doubtful accounts receivable
367.6
3.6
—
(150.8
)(a)
220.4
Lease termination reserve
3,000.0
6,410.8
—
(1,209.1
)(b)
8,201.7
NOTES:
(a)
Write-off of uncollectable accounts.
(b)
Payments to landlords and others for leases on
	closed stores.
(c)
Payments of merger and integration costs.
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Table of Contents
PART
II.     INFORMATION NOT REQUIRED IN
PROSPECTUS
Item 13.
Other
Expenses of Issuance and Distribution
Set forth below is an estimate of the approximate
amount of the fees and expenses (other than underwriting
commissions and discounts) payable by Cosí in connection
with this offering.
Securities and Exchange Commission Registration
	Fee
$
5,520
National Association of Securities Dealers Inc.
	Registration Fee
6,500
Nasdaq National Market Listing Fees
Printing Expenses
Legal Fees and Expenses
Accounting Fees and Expenses
Miscellaneous
Total
$
Item 14.
Indemnification
of Directors and Officers
Section 145 of the DGCL permits
indemnification of officers, directors, and other corporate
agents under certain circumstances and subject to certain
limitations. Our certificate of incorporation and by-laws
provide that we shall indemnify our directors and officers, and
anyone who is or was serving at our request as a director,
officer, employee, fiduciary, or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, to
the fullest extent permitted under Delaware law. In addition, we
have entered into separate indemnification agreements with our
directors and executive officers which require us, among other
things, to indemnify them against certain liabilities which may
arise by reason of their status or service (other than
liabilities arising from acts or omissions not in good faith or
willful misconduct). These indemnification provisions and the
indemnification agreements entered into between us and our
executive officers and directors may be sufficiently broad to
permit indemnification of our executive officers and directors
for liabilities (including reimbursement of expenses incurred)
arising under the Securities Act of 1933, as amended.
We maintain directors' and officers'
liability insurance against any actual or alleged error,
misstatement, misleading statement, act, omission, neglect or
breach of duty by any director or officer, excluding certain
matters including fraudulent, dishonest or criminal acts or self
dealing.
The Underwriting Agreement filed as
Exhibit 1.1 to this registration statement provides for
indemnification by the Underwriters of us and our officers and
directors for certain liabilities arising under the Securities
Act of 1933, as amended, or otherwise.
Item 15.
Recent
Sales of Unregistered Securities
Since April 1, 1999, the Registrant and its
Predecessors have sold and issued the following unregistered
securities:
(a) Issuances of shares of Common Stock
other than pursuant to exercise of employee stock options.
On October 4, 1999, in connection with the
merger of a subsidiary of the Registrant with Cosí Sandwich
Bar, Inc., the Registrant issued to the former shareholders of
Cosí Sandwich Bar, Inc. 11.237 shares of Common Stock in
exchange for each share of Cosí Sandwich Bar, Inc., Common
Stock outstanding immediately prior to the merger for an
aggregate total of 3,655,814.90 shares.
On October 4, 1999, pursuant to the
conversion of 209,600 shares of the Registrant's
Series B Convertible Preferred Stock by Andrew Stenzler,
the Registrant issued 209,600 shares of its Common Stock to
Mr. Stenzler.
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On October 4, 1999, pursuant to the
conversion of 209,600 shares of the Registrant's
Series B Convertible Preferred Stock by Nicholas Marsh, the
Registrant issued 209,600 shares of its Common Stock to
Mr. Marsh.
On October 4, 1999, pursuant to the
conversion of 38,462 shares of the Registrant's
Series B Convertible Preferred Stock by David Kaufman, the
Registrant issued 38,462 shares of its Common Stock to
Mr. Kaufman.
On October 4, 1999, pursuant to the
conversion of 130,703 shares of the Registrant's
Series C Preferred by Ziff Asset Management, L.P.
("ZAM"), the Registrant issued 130,703 shares of its
Common Stock to ZAM.
On June 4, 2001, the Registrant sold
2,858 shares of its Common Stock to two outside consultants
in exchange for full satisfaction of invoices for consulting
services for an aggregate amount of $20,000, or $7.00 per share.
(b) Issuances of Shares of Series C
Preferred Stock.
On March 20, 2000, the Registrant issued a
total of 898,549.33 shares of Series C Convertible
Preferred Stock ("Series C Preferred") to outside
investors, most of which were existing shareholders of the
Registrant, for an aggregate purchase price of $8,086,941, or
$9.00 per share.
On April 12, 2000, the Registrant issued a
total of 229,268 shares of Series C Preferred to
outside investors, most of which were existing shareholders of
the Registrant, for an aggregate purchase price of $1,063,412,
or $9.00 per share.
On June 10, 2000, the Registrant issued a
total of 8,250 shares of Series C Preferred to outside
investors, most of which were existing shareholders of the
Registrant, for an aggregate purchase price of $74,250, or $9.00
per share.
On June 30, 2000, the Registrant issued a
total of 683,204 shares of Series C Preferred to
outside investors, most of which were existing shareholders of
the Registrant, for an aggregate purchase price of $6,148,845,
or $9.00 per share.
On September 30, 2000, the Registrant issued
a total of 677,866 shares of Series C Preferred to outside
investors, most of which were existing shareholders of the
Registrant, for an aggregate purchase price of $6,100,794, or
$9.00 per share.
On January 31, 2001, the Registrant issued a
total of 1,517,482 shares of Series C Preferred to outside
investors, most of which were existing shareholders of the
Registrant for an aggregate purchase price of $14,416,168, or
$9.50 per share.
On March 31, 2001, the Registrant issued a
total of 73,758 shares of Series C Preferred to an existing
shareholder of the Registrant for an aggregate purchase price of
$700,701, or $9.50 per share.
On May 10, 2001, the Registrant issued a
total of 868,822 shares of Series C Preferred to
outside investors, most of which were existing shareholders of
the Registrant, for an aggregate purchase price of $8,250,009,
or $9.50 per share.
On December 1, 2001, the Registrant issued a
total of 105,264 shares of Series C Preferred to an outside
investor for an aggregate purchase price of $1,000,008, or $9.50
per share.
On February 23, 2002, the Registrant issued
a total of 2,029,923 shares of Series C to partners of
William Blair & Company and outside investors, most of which
were existing shareholders of the Registrant, for an aggregate
purchase price of $19,284,229.37, or $9.50 per share.
(c) Option Issuances to, and Exercises by,
Employees, Directors and Consultants.
From April 1, 1999 to April 1, 2002,
the Registrant issued options to purchase a total of 4,091,018
shares of Common Stock at a weighted-average exercise price of
$7.00 per share to 1,794 employees. No
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consideration was paid to the Registrant by any
recipient of any of the forgoing options for the grant of such
options.
On November 1, 1999, the Registrant issued a
stock option to purchase 5,050 shares of Common Stock at an
exercise price of $7.00 per share, to an outside attorney in
consideration of legal services rendered.
On December 23, 1999, the Registrant issued
a stock option to purchase 11,237 shares of Common Stock at
an exercise price of $5.93 per share, to an outside consultant
in consideration of management consulting services rendered.
On January 7, 2000, the Registrant issued
stock options to purchase 5,000 shares of its Common Stock
at an exercise price of $7.00 per share, to two outside
accountants in consideration of accounting services rendered.
On November 15, 2000, the Registrant sold 95
shares of its Common Stock to an employee for aggregate
consideration of $635, or approximately $6.68 per share,
pursuant to the exercise of outstanding stock options.
On February 10, 2001, the Registrant issued
to a stock option to purchase 19,156 shares of its Common
Stock at an exercise price of $7.00 per share, to an outside
recruiter in consideration of executive recruitment services
rendered.
On February 15, 2001, the Registrant issued
a stock option to purchase 20,000 shares of Common Stock at
an exercise price of $7.00 per share, to an outside consultant
in consideration of consulting services rendered.
On March 1, 2001, the Registrant sold 400
shares of its Common Stock to an employee for aggregate
consideration of $2,500, or approximately $6.25 per share,
pursuant to the exercise of outstanding stock options.
On April 1, 2000, the Registrant issued a
stock option to purchase 50,000 shares of its Common Stock
at an exercise price of $7.00 per share, to two outside
consultants in consideration of consulting services rendered.
On July 13, 2001, the Registrant sold 9,319
shares of its Common Stock to an employee for aggregate
consideration of $38,803.92, or approximately $4.16 per share,
pursuant to the exercise of outstanding stock options.
On November 20, 2001, the Registrant issued
a stock option to purchase 5,000 shares of its Common Stock
at an exercise price of $7.00 per share, to an outside
consultant in consideration of store design services rendered.
On December 31, 2001, the Registrant issued
stock options to purchase 150,000 shares of its Common
Stock at an exercise price of $7.00 per share, to four outside
consultants in consideration of consulting services rendered.
On December 31, 2001, the Registrant issued
a stock option to purchase 20,000 shares of its Common
Stock at an exercise price of $7.00 per share, to an outside
attorney in consideration of legal services rendered.
On January 30, 2002, the Registrant sold
56,250 shares of its Common Stock to a former director for
aggregate consideration of $351,562.50, or approximately $6.25
per share, pursuant to the exercise of outstanding stock options.
On February 11, 2002, the Registrant sold 41
shares of its Common Stock to an employee for aggregate
consideration of $287, or approximately $7.00 per share,
pursuant to the exercise of stock options.
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(d) Issuances of Warrants.
On October 28, 1999, the Registrant issued a
stock purchase warrant to purchase 14,118 shares of its
Series C Preferred Stock at an exercise price of $8.50 per
share, to Third Coast Capital, a division of DVI Financial
Services, Inc., pursuant to a Master Loan and Security Agreement.
On November 6, 2001, the Registrant issued
stock purchase warrants to purchase 703 shares of Common Stock
at $0.01 per share to outside investors, most of which were
existing shareholders of the Registrant, pursuant to a Note and
Warrant Purchase Agreement.
On November 7, 2001, the Registrant issued
stock purchase warrants to purchase 92,077 shares of Common
Stock at $0.01 per share to outside investors, most of which
were existing shareholders of the Registrant, pursuant to a Note
and Warrant Purchase Agreement.
On November 27, 2001, the Registrant issued
a stock purchase warrant to purchase 176 shares of Common Stock
at $0.01 per share to an existing shareholder of the Registrant,
pursuant to a Note and Warrant Purchase Agreement.
On December 10, 2001, the Registrant issued
a stock purchase warrant to purchase 26 shares of Common Stock
at $0.01 per share to an existing shareholder of the Registrant,
pursuant to a Note and Warrant Purchase Agreement.
On January 18, 2002, the Registrant issued a
stock purchase warrant to purchase 8,785 shares of Common Stock
at $0.01 per share to outside investors, most of which were
existing shareholders of the Registrant, pursuant to a Note and
Warrant Purchase Agreement.
(e) Issuances of Promissory Notes.
On November 6, 2001, the Registrant sold
promissory notes in the principal amount of $40,000, to outside
investors, most of which were existing shareholders of the
Registrant, pursuant to a Note and Warrant Purchase Agreement.
On November 7, 2001, the Registrant sold
promissory notes in the principal amount of $5,240,046, to
outside investors, most of which were existing shareholders of
the Registrant, pursuant to a Note and Warrant Purchase
Agreement.
On November 27, 2001, the Registrant sold
promissory notes in the principal amount of $10,000, to an
outside investor and existing shareholder of the Registrant,
pursuant to a Note and Warrant Purchase Agreement.
On January 18, 2002, the Registrant sold a
promissory note in the principal amount of $500,000, to outside
investors, most of which were existing shareholders of the
Registrant, pursuant to a Note and Warrant Purchase Agreement.
There were no underwriters employed in connection
with any of the transactions set forth in Item 15.
The issuances described in Items 15(a), 15(b),
15(d) and 15(e) were deemed to be exempt from registration under
the Securities Act in reliance on Section 4(2) of the
Securities Act as transactions by an issuer not involving a
public offering, including pursuant to Rule 504 of
Regulation D, promulgated thereunder.
The issuances described in Item 15(c) were
deemed to be exempt from registration under the Securities Act
in reliance on Rule 701 promulgated thereunder as
transactions pursuant to compensatory benefit plans and
contracts relating to compensation.
The recipients of securities in each such
transaction represented their intention to acquire the
securities for investment only and not with a view to or for
sale in connection with any distribution thereof and appropriate
legends were affixed to the share certificates and other
instruments issued in such transactions. All recipients either
received adequate information about the Registrant or had
access, through employment or other relationships, to such
information.
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Item 16.
Exhibits
and Financial Statement Schedules
a.     Exhibits
Exhibit
Number
Description of Exhibit
1.1*
—
Form of Underwriting Agreement.
2.1†
—
Merger Agreement by and among Xando,
	Incorporated, Xando Merger Corp. and Cosí Sandwich Bar,
	Inc., dated as of October 4, 1999.
3.1†
—
Form of Amended and Restated Certificate of
	Incorporation of Cosí, Inc.
3.2†
—
Form of Amended and Restated By-Laws of
	Cosí, Inc.
4.1*
—
Form of Certificate of Common Stock.
4.2†
—
Form of Rights Agreement between Cosí, Inc.
	and                 as
	Rights Agent.
4.3†
—
Amended and Restated Registration Agreement,
	dated as of March 30, 1999.
5.1*
—
Opinion of Cadwalader, Wickersham & Taft
	as to the legality of the securities being registered.
10.1†
—
Amended and Restated Cosí Stock Incentive
	Plan.
10.2†
—
Cosí Employee Stock Purchase Plan.
10.3†
—
Cosí Non Employee Director Stock Incentive
	Plan.
10.4†
—
Cosí Deferred Stock Plan.
10.5.1†
—
Employment Agreement between Cosí and Andy
	Stenzler, effective as of January 1, 2002.
10.5.2†
—
Employment Agreement between Cosí and Jay
	Wainwright, effective as of January 1, 2002.
10.5.3†
—
Employment Agreement between Cosí and Nick
	Marsh, effective as of January 1, 2002.
10.5.4†
—
Employment Agreement between Cosí and David
	Orwasher, effective as of January 1, 2002.
10.5.5†
—
Employment Agreement between Cosí and Shep
	Wainwright, effective as of January 1, 2002.
21.1†
—
Subsidiaries of Cosí, Inc.
23.1.1*
—
Consent of Cadwalader, Wickersham & Taft.
23.1.2†
—
Consent of Arthur Andersen LLP, dated as of
	April 15, 2002.
23.1.3†
—
Consent of Ernst & Young LLP, dated as of
	April 15, 2002.
24.1†
—
Power of Attorney (included on the signature page
	of this registration statement).
99.1†
—
Letter of the Registrant, addressed to the
	Securities and Exchange Commission, regarding representations to
	the Registrant from Arthur Andersen LLP.
†
Filed herewith.
#
Previously filed.
*
To be filed by amendment.
b.     Financial
Statement Schedules
Item 17.
Undertakings
Cosí hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting
Agreement certificates in such denominations and registered in
such names as required by the Underwriters to permit prompt
delivery to each purchaser. Insofar as indemnification by
Cosí for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of
Cosí pursuant to the provisions referenced in Item 14
of this Registration Statement or otherwise, Cosí has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Cosí of
expenses incurred or paid by a director, officer, employee or
agent of Cosí in the successful defense of any action, suit
or proceeding) is asserted by such director, officer, employee
or agent in connection with the securities being registered
hereunder, Cosí will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to
a court of
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appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final
adjudication of such issue.
Cosí hereby undertakes that:
(1) For purposes of determining any
	liability under the Securities Act, the information omitted from
	the form of Prospectus filed as part of this Registration
	Statement in reliance upon Rule 430A and contained in a
	form of prospectus filed by Cosí pursuant to
	Rule 424(b)(1) or (4) or 497(h) under the Securities
	Act shall be deemed to be part of this Registration Statement as
	of the time it was declared effective; and
(2) For the purpose of determining any
	liability under the Securities Act, each post-effective
	amendment that contains a form of Prospectus shall be deemed to
	be a new registration statement relating to the securities
	offered therein, and the offering of such securities at the time
	shall be deemed to be the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, Cosí has duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, New York, on
April 17, 2002.
COSÍ, INC.
By:
/s/ANDREW M. STENZLER
Andrew M. Stenzler
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below hereby constitutes and appoints
Andrew M. Stenzler and Kenneth S. Betuker, and each of them, his
or her true and lawful attorneys-in-fact and agents, each acting
alone, with full power of substitution and resubstitution, for
him or her and in his or her name, place and stead, in any and
all capacities, to sign any and all amendments, including
post-effective amendments or supplements to this Registration
Statement, and to file the same, with all exhibits thereto and
all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto each of said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite, necessary and
appropriate to be done with respect to this Registration
Statement or any amendments or supplements hereto in and about
the premises, as fully to all intents and purposes as he or she
might or could do in person, and hereby ratifies and confirms
all said attorneys-in-fact and agents, and each of them, or his
substitute or substitutes, may lawfully do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed on
April 17, 2002 by the following persons in the capacities
indicated.
Signature
Position
/s/ ANDREW M. STENZLER
Andrew M. Stenzler
Chairman of the Board of Directors and Chief
	Executive Officer (Principal Executive Officer)
/s/ JONATHAN M. WAINWRIGHT, JR.
Jonathan M. Wainwright, Jr.
President
/s/ KENNETH S. BETUKER
Kenneth S. Betuker
Chief Financial Officer (Principal Financial
	Officer and Principal Accounting Officer)
/s/ NICHOLAS MARSH
Nicholas Marsh
Director
/s/ TERRY D. DIAMOND
Terry D. Diamond
Director
/s/ CREED L. FORD, III
Creed L. Ford, III
Director
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Signature
Position
/s/ ERIC J. GLEACHER
Eric J. Gleacher
Director
/s/ D. IAN MCKINNON
D. Ian McKinnon
Director
/s/ JEFFERY M. STORK
Jeffery M. Stork
Director
/s/ GREGORY J. WOOLLEY
Gregory J. Woolley
Director
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