GENERAL

California Beach Restaurants, Inc., ("Registrant" or "Company "), was organized under the laws of the State of California in April 1971. The Registrant is currently engaged in one line of business, the ownership and operation of a restaurant, Gladstone's 4 Fish ("Gladstone's") restaurant in Pacific Palisades, California. Until June 21, 2002, the Company also had operated RJ's - Beverly Hills ("RJ's") in Beverly Hills, California. (See Note 1 to Consolidated Financial Statements).