SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

ý Quarterly Report Voluntarily Filed Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934

For the Quarterly Period Ended ~~March~~September 3028, 2005

Commission File Number 333-62775

BERTUCCI’S CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		06-1311266
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

155 Otis Street, Northborough, Massachusetts		01532-2414
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (508) 351-2500

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.

Yes ý No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes o No ý

~~2,947,732~~Indicate ~~shares~~by ofcheck mark whether the registrant’s ~~Common~~is ~~Stock~~a ~~were~~large ~~outstanding~~accelerated onfiler, ~~May 11~~an accelerated filer, ~~2005~~or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

Accelerated filer

Non-accelerated filer

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No ý

3,012,982 shares of the registrant’s Common Stock were outstanding on January 10, 2006

BERTUCCI’S CORPORATION

FORM 10-Q

TABLE OF CONTENTS

PART I:	FINANCIAL INFORMATION
Item 1.	Financial Statements:
1)	Condensed Consolidated Balance Sheets as of ~~March~~September 3028, 2005 (Unaudited) and December 29, 2004 (Unaudited)
2)	Condensed Consolidated Statements of Operations ~~for~~For the 13 and 39 Weeks Ended ~~March~~September 3028, 2005 (Unaudited) and ~~March~~September 3129, 2004 (As Restated) (Unaudited)
3)	Condensed Consolidated ~~Statement~~Statements of ~~Changes~~Cash inFlow ~~Stockholders’ Deficit~~ for the 1339 Weeks Ended ~~March~~September 3028, 2005 (Unaudited) and September 29, 2004 (As Restated) (Unaudited)
4)	Notes to Condensed Consolidated Financial Statements ~~of Cash Flow for the 13 Weeks Ended March 30, 2005~~ (Unaudited) ~~and March 31, 2004 (Unaudited)~~
5)	Notes to Condensed Consolidated Financial Statements (Unaudited)
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosure About Market Risk
Item 4.	Controls and Procedures
PART II:	OTHER INFORMATION
Item 1.	Legal Proceedings
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.	Defaults Upon Senior Securities
Item 4.	Submission of Matters to a Vote of Security Holders
Item 5.	Other Information
Item 6.	Exhibits
SIGNATURES
EXHIBITS

PART I: FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

BERTUCCI’S CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

	March 30, 2005			December 29, 2004
	September 28,			December 29,
	2005			2004
ASSETS
Current Assets:
Cash and cash equivalents	$	913,~~848~~771		$	12,291
Restricted cash	2,~~178~~180			2,403
Accounts receivable	~~1,046~~696			1,334
Inventories	1,~~414~~438			1,388
Prepaid expenses and other current assets	~~483~~367			534
Total current assets	1418,~~969~~452			17,950
Property and Equipment, at cost:
Land	259			259
Buildings	697			697
Capital leases - land and buildings	5,764			5,764
Leasehold improvements	6768,~~665~~524			66,~~037~~632
Furniture and equipment	4346,~~887~~523			4344,~~248~~537
	118,272			116,005
	121,767			117,889
Less - accumulated depreciation and amortization	(5465,~~521~~746		)	(5157,~~517~~101		)
	63,751			64,488
	56,021			60,788
Construction work in process	—			1,567
Net property and equipment	6356,~~751~~021			6662,~~055~~355
Goodwill	26,127			26,127
Deferred finance costs, net	2,~~688~~340			2,862
Liquor licenses, net	2,~~400~~372			2,414
Other assets	~~517~~639			513
TOTAL ASSETS	$	~~110~~105,~~452~~951		$	~~115~~112,~~921~~221
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Promissory notes - current portion	$	41		$	40
Capital lease obligations - current portion	83			74
Accounts payable	6,~~726~~887			7,819
Accrued expenses	13,~~498~~918			16,457
Total current liabilities	20,~~348~~929			24,390
Promissory notes, net of current portion	~~761~~739			781
Capital lease obligations, net of current portion	6,~~073~~028			6,102
Senior Notes	85,310			85,310
Deferred gain on sale leaseback transaction	1,~~975~~920			2,002
Other long-term liabilities	8,~~610~~478			8,368
Total liabilities	123,~~077~~404			126,953
Commitments and Contingencies
Stockholders’ Deficit:
Common stock, $.01 par value
Authorized - 8,000,000 shares
Issued - 3,698,995 and 3,667,495 shares, respectively; Outstanding 2,946,982 and 2,915,482 shares, respectively	37			37
Issued - 3,764,995 and 3,667,495 shares, respectively; Outstanding 3,012,982 and 2,915,482 shares, respectively	38			37
Less treasury shares, 752,013 at cost	(8,480		)	(8,480		)
Additional paid-in capital	29,~~190~~617			29,046
Accumulated deficit	(3338,~~372~~628		)	(3135,~~635~~335		)
Total stockholders’ deficit	(1217,~~625~~453		)	(1114,~~032~~732		)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	~~110~~105,~~452~~951		$	~~115~~112,~~921~~221

The accompanying notes are an integral part of these condensed consolidated financial statements.

BERTUCCI’S CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Thirteen weeks ended						Thirty-nine weeks ended
	March 30, 2005			March 31, 2004
	September 28,			September 29,			September 28,			September 29,
				(As Restated - See Note 3)
	2005			2004			2005			2004
Net sales	$	49,952		$	49,426
				(As Restated - See Note 3)						(As Restated - See Note 3)
Cost of sales and expenses:
Net sales	$	49,654		$	49,260		$	152,185		$	150,440
Cost of sales	11,860			11,556
Cost of sales and expenses:
Operating expenses	30,454			29,627
Cost of sales	11,316			12,256			35,498			36,695
General and administrative expenses	3,499			3,093
Operating expenses	30,051			29,509			91,895			92,605
Depreciation, amortization, deferred rent and pre-opening expenses	3,226			3,309
General and administrative expenses	3,740			2,655			10,521			9,226
Total cost of sales and expenses	49,039			47,585
Asset impairment charge	—			—			907			3,894
Income from operations	913			1,841
Depreciation, amortization, deferred rent and pre-opening expenses	2,601			3,244			8,773			9,518
Interest expense, net	(2,650		)	(2,638		)
Total cost of sales and expenses	47,708			47,664			147,594			151,938
Loss before income taxes	(1,737		)	(797		)
Income (loss) from operations	1,946			1,596			4,591			(1,498		)
Income taxes	—			—
Interest expense, net	(2,613		)	(2,664		)	(7,884		)	(7,963		)
Net loss	$	(1,737	)	$	(797	)
Loss before income taxes	(667		)	(1,068		)	(3,293		)	(9,461		)
Basic and diluted loss per share	$	(0.59	)	$	(0.27	)
Income taxes	—			—			—			—
Weighted average shares outstanding - basic and diluted	2,925,520			2,958,436
Net loss	$	(667	)	$	(1,068	)	$	(3,293	)	$	(9,461	)
Basic and diluted loss per share	$	(0.23	)	$	(0.36	)	$	(1.12	)	$	(3.21	)
Weighted-average shares outstanding - basic and diluted	2,953,864			2,944,377			2,942,372			2,949,279

The accompanying notes are an integral part of these condensed consolidated financial statements.

BERTUCCI’S CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

(In thousands, except share data)

(Unaudited)

	Common Stock			Treasury Stock										Total
	Number of			Number of					Additional Paid-In		Accumulated			Stockholders’
	Shares	Amount		Shares		Amount			Capital		Deficit			Deficit
Balance December 29, 2004	3,667,495	$	37	(752,013	)	$	(8,480	)	$	29,046	$	(31,635	)	$	(11,032	)
Issuance of common stock	31,500	—		—		—			144		—			144
Net loss	—	—		—		—			—		(1,737		)	(1,737		)
Balance March 30, 2005	3,698,995	$	37	(752,013	)	$	(8,480	)	$	29,190	$	(33,372	)	$	(12,625	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

BERTUCCI’S CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(In thousands)

(Unaudited)

	Thirteen Weeks Ended
	Thirty-nine Weeks Ended
	March 30, 2005			March 31, 2004
	September 28, 2005			September 29, 2004
				(As Restated - See Note 3)
Cash flows from operating activities
Net loss	$	(13,~~737~~293	)	$	(~~797~~9,461	)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, amortization and deferred rent	39,~~193~~109			39,~~285~~572
Stock compensation expense	144			—
Asset impairment charge	907			3,894
Stock compensation expense	172			—
Changes in operating assets and liabilities
Inventories	(2650		)	(~~140~~227		)
Prepaid expenses, receivables and other	~~339~~847			(~~863~~45		)
Other accrued expenses	(2,~~681~~598		)	(23,~~291~~045		)
Accounts payable	(~~1,093~~932		)	(~~1,162~~167		)
Tenant allowance received	—208			356
Other operating assets and liabilities	(4127		)	~~(67~~41		)
Total adjustments	~~(128~~7,536		)	~~(882~~10,379		)
Net cash used in operating activities	(1,865		)	(1,679		)
Net cash provided by operating activities	4,243			918
Cash flows from investing activities
Additions to property and equipment	(~~764~~3,280		)	(16,~~791~~381		)
Net cash used in investing activities	(764		)	(1,791		)
Decrease (increase) in restricted cash	223			(791		)
Net cash used in investing activities	(3,057		)	(7,172		)
Cash flows from financing activities
Decrease in restricted cash	225			—
Purchase of treasury shares	—			(142		)
Purchase of treasury shares	—			(62		)
Sale of common stock	400			10
Payment on promissory note	(1941		)	(1940		)
Principal payments under capital lease obligations	(2065		)	(933		)
Net cash provided by (used in) financing activities	~~186~~294			(90205		)
Net decrease in cash and cash equivalents	(2,443		)	(3,560		)
Net increase (decrease) in cash and cash equivalents	1,480			(6,459		)
Cash and cash equivalents, beginning of year	12,291			12,647
Cash and cash equivalents, end of period	$	913,~~848~~771		$	96,~~087~~188
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	49,~~822~~880		$	49,~~826~~863
Cash paid for income taxes	$	1650		$	18380

The accompanying notes are an integral part of these condensed consolidated financial statements.

BERTUCCI’S CORPORATION

Notes To Condensed Consolidated Financial Statements

~~March~~September 3028, 2005

(Unaudited)

1. Basis of Presentation

The unaudited condensed consolidated financial statements (the “Unaudited Financial Statements”) presented herein have been prepared by Bertucci’s Corporation and include all of its subsidiaries (collectively, the “Company”) after elimination of inter-company accounts and transactions, without audit, and, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the interim periods presented. The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. It is suggested the Unaudited Financial Statements be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K/A for the year ended December 29, 2004, which was filed with the Securities and Exchange Commission on January 19, 2006 (the "“2004 Annual Report" Amendment”). The operating results for the ~~thirteen~~thirty-nine weeks ended ~~March~~September 3028, 2005 may not be indicative of the results expected for any succeeding interim period or for the entire year ending December 28, 2005.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

2. Recent Accounting Pronouncements

In ~~December~~June ~~2004~~2005, the ~~Financial Accounting~~Emerging ~~Standards~~Issues ~~Board~~Task ~~(“FASB”)~~Force ~~issued Statement~~ of the Financial Accounting Standards ~~(“SFAS”)~~Board ~~No. 123R, Share-Based Payment~~ (“~~SFAS No. 123R~~FASB”). ~~This~~reached ~~Statement is~~ a ~~revision~~consensus ofon ~~SFAS~~Issue No. ~~123~~05-6, Determining ~~Accounting~~the ~~for~~Amortization ~~Stock-Based~~Period ~~Compensation,~~for ~~and supersedes~~Leasehold ~~Accounting~~Improvements ~~Principles~~(“EITF ~~Board Opinion No~~05-6”). ~~25, Accounting~~ ~~for~~The ~~Stock~~guidance ~~Issued~~requires tothat ~~Employees,~~leasehold ~~and~~improvements ~~its~~acquired ~~related~~in ~~implementation guidance. SFAS~~a ~~No. 123R focuses~~business ~~primarily~~combination onor ~~accounting~~purchased ~~for~~subsequent ~~transactions~~to inthe ~~which~~inception anof ~~entity~~a ~~obtains~~lease ~~employee~~be amortized ~~services~~over inthe ~~share-based~~lesser ~~payment~~of ~~transactions.~~the ~~The~~useful ~~Statement~~life ~~requires~~of ~~entities to~~the ~~recognize~~assets ~~stock~~or ~~compensation~~a ~~expense~~term ~~for~~that ~~awards~~includes renewals ofthat ~~equity~~are ~~instruments~~reasonably ~~to employees~~assured ~~based~~at on the ~~grant-~~date ~~fair value~~ of ~~those~~the ~~awards~~business ~~(with~~combination ~~limited~~or ~~exceptions)~~purchase. The ~~SFAS~~guidance ~~No. 123R~~ is effective for ~~the first annual reporting~~ ~~period~~periods ~~that~~beginning ~~begins~~ after ~~December~~June 1529, 2005. The ~~Company~~adoption isof ~~evaluating~~EITF ~~the~~05-6 ~~two~~is ~~methods~~not ~~of adoption~~expected ~~allowed~~to byhave ~~SFAS~~a ~~No. 123R;~~material effect on the ~~modified-prospective~~Company’s ~~transition method~~consolidated ~~and~~financial ~~the~~position ~~modified-retrospective~~or ~~transition~~results ~~method~~of operations.

In May 2005, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 154, Accounting Changes and Error Corrections–A Replacement of APB Opinion No. 20 and FASB Statement No. 3 (“SFAS No. 154”). SFAS No. 154 applies to all voluntary changes in accounting principle and requires retrospective application to prior periods’ financial statements of changes in accounting principle, unless it is impracticable. SFAS No. 154 requires that a change in depreciation, amortization, or depletion method for long-lived, non-financial assets be accounted for as a change of estimate affected by a change in accounting principle. SFAS No. 154 also carries forward without change the guidance in Accounting Principals Board (“APB”) Opinion No. 20 with respect to accounting for changes in accounting estimates, changes in the reporting unit and correction of an error in previously issued financial statements. The Company is required to adopt SFAS No. 154 for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The adoption of SFAS No. 154 is not expected to have a material effect on the Company’s consolidated financial position or results of operations.

In December 2004, the FASB issued SFAS No. 123R, Share-Based Payment (“SFAS No. 123R”). This Statement is a revision of SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance. SFAS No. 123R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. The Statement requires entities to recognize stock compensation expense for awards of equity instruments to employees based on the grant-date fair value of those awards (with limited exceptions). SFAS No. 123R is effective for the first annual reporting period that begins after December 15, 2005. The Company is evaluating the two methods of adoption allowed by SFAS No. 123R; the modified-prospective transition method and the modified-retrospective transition method.

3. Restatement of Financial Statements

~~As disclosed~~Initial in its 2004 Annual Report, in the first quarter of 2005 the Company initiated a review of its lease accounting, including leased liquor licenses, and leasehold depreciation practices. As a result, the Company corrected its accounting for leases and restated its historical financial statements and certain financial information to correct errors in lease accounting policies (the “Restatement”). The Company historically accounted for tenant improvement allowances as reductions to the related leasehold improvement asset on the consolidated balance sheets and capital expenditures in investing activities on the consolidated statements of cash flows. Also, the Company historically recognized rent on a straight-line basis over a lease term commencing with the initial occupancy date, or Company-operated retail store opening date. In addition, the depreciable lives of certain leasehold improvements and other long-lived assets on those properties were not aligned with the non-cancelable lease term.

~~Following~~In the first quarter of 2005 the Company initiated a review of its lease accounting, ~~treatment~~including leased liquor licenses, and ~~relevant~~leasehold ~~accounting~~depreciation practices. ~~literature~~As a result, the Company ~~determined~~corrected itits ~~should:~~ accounting for leases and restated its financial statements for all periods prior to December 29, 2004 and certain financial information to correct errors in lease accounting policies (athe “Initial Restatement”) ~~report~~. The Company had historically accounted for tenant improvement allowances as ~~deferred~~reductions ~~liabilities~~to inthe related leasehold improvement asset on the consolidated balance sheets and ~~initiate~~capital ~~the~~expenditures in ~~amortization~~investing ofactivities ~~those~~on ~~liabilities~~the atconsolidated ~~the relevant~~statements ~~initial~~of ~~occupancy~~cash ~~date;~~flows. ~~(b) classify~~ Also, the ~~change~~Company inhad ~~the~~historically ~~deferred~~recognized rent ~~liability~~on ~~related~~a tostraight-line ~~the~~basis ~~tenant~~over ~~allowances~~a inlease ~~the operating~~term ~~activities~~commencing onwith the ~~Condensed~~initial occupancy ~~Consolidated~~date, ~~Statements~~or ofCompany-operated ~~Cash~~retail ~~Flows;~~store ~~(c) conform~~ opening date. In addition, the depreciable lives ~~for~~of ~~buildings~~certain leasehold improvements and other long-lived assets on those properties were not aligned with the non-cancelable lease term.

Following a review of its lease accounting treatment and relevant accounting literature, the Company determined it should: (a) report tenant improvement allowances as deferred liabilities in the consolidated balance sheets and initiate the amortization of those liabilities at the relevant initial occupancy date; (b) classify the change in the deferred liability related to the tenant allowances in the operating activities on the Condensed Consolidated Statements of Cash Flows; (c) conform the depreciable lives for buildings on leased land and other leasehold improvements to the shorter of the economic life of the asset or the lease term used for determining the capital versus operating lease classification and calculating straight-line rent; and (d) include option periods in the depreciable lives assigned to leased buildings and leasehold improvements and in the calculation of straight-line rent expense only in instances in which the exercise of the option period can be reasonably assured and failure to exercise such options would result in an economic penalty.

The restatement for leaseholds also resulted in restatements of amounts previously reported for asset impairments.

The Initial Restatement did not have any impact on the Company’s previously reported net sales or compliance with any covenant under its debt instruments.

Current Restatement

In connection with the preparation of this Quarterly Report on Form 10-Q for the fiscal quarter ended September 28, 2005, the Company discovered errors in its detailed property and equipment records adjusted during the Initial Restatement. Management then conducted an investigation into the extent and magnitude of these errors, which involved the calculation of depreciation expense on multiple property records and the related impact on income taxes for the fiscal years 1998 through 2004, inclusive, and the first two fiscal quarters of 2005 (the “Relevant Period”), to determine if a restatement of its financial statements was necessary. Based upon this investigation, in January 2006 the Company determined additional aggregate depreciation expense of approximately $3.5 million was required for the Relevant Period and income tax expense was not properly adjusted in the Initial Restatement. Based upon this investigation, in January 2006 the Company determined an additional aggregate depreciation expense of approximately $3.5 million was required for the Relevant Period and a restatement of its financial statements, including those contained in its: (1) Annual Report on Form 10-K for the fiscal year ended December 29, 2004, which was filed with the SEC on April 13, 2005 (the “Original 2004 10-K”); (2) Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2005, which was filed with the SEC on May 13, 2005 (the “Original 2005 First Quarter 10-Q”); and (3) Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 2005, which was filed with the SEC on August 12, 2005 (the “Original 2005 Second Quarter 10-Q”), and together with the Original 2004 10-K and the Original 2005 First Quarter 10-Q, (the “Subject Filings”), was necessary (the “Current Restatement”). Accordingly, the Company determined it should amend the Subject Filings to reflect the proper recording of depreciation and income tax expense and its impact on the consolidated Balance Sheets, Statements of Operations, Stockholders’ Deficit, and Cash Flows for the periods reported therein.

The Company also restated its Statements of Cash Flows to present the change in restricted cash as an investing activity. These amounts had previously been reported as a financing activity.

~~leased land~~The ~~and~~Current ~~other~~Restatement ~~leasehold~~did ~~improvements~~not tohave ~~the~~any ~~shorter~~impact ~~of the economic life of~~on the ~~asset~~Company’s orpreviously ~~the~~reported ~~lease~~net ~~term~~sales ~~used~~during ~~for determining~~ the ~~capital~~Relevant ~~versus~~Period. ~~operating~~The ~~lease~~following ~~classification~~is ~~and~~a ~~calculating~~summary ~~straight-line~~of ~~rent;~~the ~~and~~impact ~~(d) include option~~of ~~periods in~~ the ~~depreciable~~Current ~~lives~~Restatement ~~assigned~~on tothe ~~leased buildings and~~Company’s ~~leasehold~~condensed ~~improvements~~consolidated ~~and~~statements ~~in the calculation~~ of ~~straight-line~~operations ~~rent~~and ~~expense only~~cash inflow ~~instances~~for in the ~~which the exercise of the option period can be reasonably~~thirteen ~~assured~~ and ~~failure~~thirty-nine toweeks ~~exercise~~ended ~~such~~September 29, ~~options~~2004 ~~would result~~ (in anthousands, ~~economic~~except per ~~penalty.~~share data):

~~While~~For the ~~Restatement did not have any impact on the~~ Company’s previously reported net sales or compliance with any covenants under its debt instruments, the Company determined the correction of these errors required it to restate its financial statements for all periods ~~prior~~ended to September 29, ~~2004.~~ ~~The following is a summary of the impact of the Restatement on the Company’s condensed consolidated statements of operations and cash flow for the thirteen weeks ended March 31,~~ 2004 ~~(in thousands, except per share data):~~

	As previously reported			As Restated
	Thirteen Weeks Ended
Operating expenses	$	29,639		$	29,627
	As Previously Reported			As Originally Restated			As Restated
Deferred rent, depreciation, amortization and pre-opening expenses	3,232			3,309
Operating expenses	$	29,521		$	29,509		$	29,509
Income from operations	1,906			1,841
Deferred rent, depreciation, amortization and pre-opening expenses	3,111			3,379			3,244
Interest expense, net	(2,629		)	(2,638		)
Income (loss) from operations	1,717			1,461			1,596
Net loss	(723		)	(797		)
Interest expense, net	(2,654		)	(2,664		)	(2,664		)
Basic and diluted loss per share	$	(0.24	)	$	(0.27	)
Net loss	(937		)	(1,203		)	(1,068		)
Cash flows from operating activities	$	(2,038	)	$	(1,679	)
Basic and diluted loss per share	(0.32		)	(0.41		)	(0.36		)
Cash flows from investing activities	(1,435		)	(1,791		)
Cash flows from financing activities	(87		)	(90		)

	Thirty-nine Weeks Ended
	As Previously Reported			As Originally Restated			As Restated
Operating expenses	$	92,640		$	92,605		$	92,605
Deferred rent, depreciation, amortization and pre-opening expenses	9,456			9,949			9,518
Asset impairment charge	3,338			3,894			3,894
Income (loss) from operations	(915		)	(1,929		)	(1,498		)
Interest expense, net	(7,934		)	(7,963		)	(7,963		)
Net loss	(8,849		)	(9,892		)	(9,461		)

Basic and diluted loss per share	(3.00		)	(3.35		)	(3.21		)

Cash flows from operating activities	555			918			918
Cash flows used in investing activities	(6,025		)	(6,381		)	(7,172		)
Cash flows used in financing activities	(989		)	(996		)	(205		)

4. Liquor Licenses

Transferable liquor licenses purchased are accounted for at the lower of cost or fair market value and are not amortized. Annual renewal fees are expensed as incurred. The carrying value of transferable liquor licenses was $2.0 million at each of ~~March~~September 3028, ~~2005~~ 2005 and December 29, 2004. Non-transferable liquor licenses are ~~amortized~~ amortized on a straight-line basis over the contractual life of the license. Accumulated amortization at ~~March~~September 3028, 2005 and December 29, 2004 for non-transferable liquor licenses was $~~154~~182,000 and $140,000, respectively. Amortization expense for the ~~thirteen~~thirty-nine weeks ended ~~March~~September 3028, 2005 was $1442,000 and is expected to be $56,000 per year through fiscal 2010.

5. Restaurant Closing Reserves

Restaurant closing reserves were established as part of the acquisition of Bertucci’s, Inc. in July 1998. These reserves were related to estimated future lease commitments and exit costs to close 18 Bertucci’s locations. In 2001, the Company accrued an additional $4.2 million related to selected locations (all of which had been closed), consisting of estimated lease commitments and certain exit costs. It was originally expected the Company would be able to exit these locations, sublease the locations or otherwise be released from the related leases. However, due to market conditions, the Company has been unable to sublease or exit certain of these leases.

The closed restaurant reserve was calculated net of sublease income at 12ten locations partially or fully subleased as of ~~March~~September 3028, 2005. ~~The Company remains primarily liable for the remaining lease obligations~~

The Company remains primarily liable for the remaining lease obligations should the sublessee default. Total ~~sublease~~ sublease income excluded from the reserve is approximately $6.92 million for ~~subleases~~ subleases expiring at various dates through 2017. There have been no defaults by ~~sublessors~~ sublessees to date.

Activity within the reserve was as follows (in thousands):

	Thirteen weeks ended
	Thirty-nine weeks ended
	March 30, 2005			March 31, 2004
	September 28,			September 29,
	2005			2004
Balance, beginning of the year	$	659		$	1,449
Payments charged against reserve	(~~157~~255		)	(~~184~~469		)
Balance, end of period	$	~~502~~404		$	~~1,265~~980
Current portion (included in accrued expenses)	$	~~324~~288		$	615
Noncurrent portion	~~178~~116			~~650~~365
	$	~~502~~404		$	~~1,265~~980

6. Loss per Share

Basic loss per share is computed by dividing net loss by the weighted -average number of shares of common ~~shares~~stock outstanding for ~~the~~ the reporting period. Diluted earnings per share reflects the potential ~~dilution~~ dilution that could occur if options or other contracts to issue common stock ~~were~~ were exercised or converted into common stock. For the periods ended ~~March~~September 3028, 2005 and ~~March~~September 3129, 2004 options representing ~~531~~963,~~429~~929 and ~~592~~554,~~396~~ 021 shares of common stock, respectively, were excluded from the calculation of diluted loss per share because of their anti-dilutive effect.

7. Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Additionally, the Company is required to consider both negative and positive evidence in determining if a valuation allowance is required on a quarterly basis. Management previously recorded a full valuation allowance for its deferred tax assets and continues to record an allowance quarterly for the tax benefits associated with the current period’s losses.

8. Stock-Based Compensation

In accordance with SFAS No. 123, Accounting for Stock-Based Compensation (“SFAS No. 123”), the Company has elected to account for stock-based compensation under the intrinsic value method with disclosure of the effects of fair value accounting on net loss and loss per share on a pro forma basis. The Company’s stock-based compensation plan is described more fully in Note 10 of Notes to Consolidated Financial Statements in ~~its~~the 2004 Annual Report. ~~The~~Amendment and in the Company’s Form 8-K filed with the SEC on October 3, 2005. The Company accounts for this plan under the recognition and measurement principles of APB Opinion No. 25, Accounting for ~~Stock~~ Stock Issued to Employees, and related interpretations. ~~With the exception~~No ~~of one modification to a grant during 2003, no~~ stock-based employee compensation cost related to stock options is reflected in net loss, as all options granted had an exercise price equal to, or in excess of, the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net loss and loss per share if the Company had applied the fair value recognition provisions of SFAS No. 123 (in thousands, except per share data):

	Thirteen weeks ended									Twenty-six weeks ended
	June 29,						June 30,			June 29,			June 30,
	2005						2004			2005			2004

Net loss, as reported	$				(667	)	$	(1,068	)	$	(3,293	)	$	(9,461	)
Add: Stock-based employee compensation expense included in reported net loss	26						—			172			—

Adjust: Net stock-based employee compensation income (expense) determined under fair value based method for all awards	(3					)	61			(130		)	(95		)

Pro forma net loss	$			(644		)	$	(1,007	)	$	(3,251	)	$	(9,556	)

Basic and diluted loss per share
As reported	$		(0.23			)	$	(0.36	)	$	(1.12	)	$	(3.21	)
Pro forma	$	(0.22				)	$	(0.34	)	$	(1.10	)	$	(3.24	)

	Thirteen weeks ended
	March 30, 2005			March 31, 2004
Net loss, as reported	$	(1,737	)	$	(797	)
Add: Stock-based employee compensation expense included in reported net loss	144			—
Adjust: Net stock-based employee compensation expense determined under fair value based method for all awards	(191		)	(96		)
Pro forma net loss	$	(1,784	)	$	(893	)
Basic and diluted loss per share
As reported	$	(0.59	)	$	(0.27	)
Pro forma	$	(0.61	)	$	(0.30	)

During the first three quarters of 2005, the Company awarded bonuses to two senior employees and certain officers and independent members of the Board of Directors consisting of an aggregate of 37,500 shares of Common Stock with an average fair value of $4.59 per share. Accordingly, the grant of such shares resulted in a $172,000 compensation charge to the Company.

During the ~~quarter~~third ~~ended March 30,~~quarter of 2005, the Company ~~awarded bonuses to two senior employees and certain officers~~’s ~~and independent members of the~~ Board of Directors ~~consisting~~approved ofthe anadoption ~~aggregate~~ of ~~31,500~~ ~~shares~~the ofBertucci’s ~~Common~~Corporation ~~Stock~~Amended and ~~with~~Restated a1997 ~~fair~~Equity ~~value~~Incentive ofPlan ~~$4.56 per share. Accordingly,~~ (the ~~grant~~“Plan”) ~~of such shares resulted in a $144,000 compensation charge~~ to increase the ~~Company.~~number ~~The recipients~~ of ~~these awards acknowledged in writing the~~ ~~transfer~~shares ofthat ~~their~~are ~~shares~~available isfor ~~subject~~issuance tounder the ~~provisions~~Plan offrom ~~a Stockholders’ Agreement~~750, ~~which~~000 ~~are summarized in "Security Ownership of Certain Beneficial Owners~~to ~~and Management - Shareholders Agreement" in the Company's 2004 Annual Report~~1,100,000.

10The net stock-based employee compensation expense determined under the fair value based method for the current periods includes income resulting from the forfeitures of non-vested options.

~~Item 2~~9. ~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~ ~~FINANCIAL~~Asset ~~CONDITION~~Impairment ~~AND RESULTS OF OPERATIONS~~Charge

~~Forward~~The Company’s long-~~Looking~~lived ~~Statements~~assets consist primarily of goodwill, other intangible assets, and leasehold improvements related to its restaurant operations. SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, requires management to test the recoverability of long-lived assets (excluding goodwill) by comparing estimated undiscounted future operating cash flows expected to be generated from these assets to the carrying amounts of the assets whenever events or changes in circumstances indicate the carrying value may not be recoverable. If cash flows are not sufficient to recover the carrying amount of the assets, impairment has occurred and the assets are written down to fair value. Significant estimates and assumptions regarding future sales, cost trends, productivity and market maturity are required to be made by management in order to test for impairment under this standard.

~~All~~During ~~statements~~the ~~other~~second ~~than~~quarter ~~statements~~ of ~~historical facts included in this Report on Form 10-Q~~2005, ~~including, without limitation, statements set forth under this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding~~ the Company~~’s future~~ ~~financial~~assessed ~~position,~~certain ~~business~~non-performing ~~strategy,~~restaurants ~~budgets,~~for ~~projected~~recoverability ~~costs~~ and ~~plans and~~determined ~~objectives~~an impairment of ~~management~~fixed ~~for~~assets ~~future~~existed ~~operations,~~at ~~are~~four ~~forward-looking statements~~restaurant locations. ~~In addition, forward-looking statements generally can be~~The ~~identified~~Company byestimated the ~~use~~fair value of ~~forward-looking~~these ~~terminology~~assets ~~such~~based ason ~~“may,” “will,” “expect,” “intend,” “estimate,” “anticipate” or “believe” or~~ the ~~negative~~net ~~thereof~~present orvalue ~~variations~~of ~~thereon~~the orexpected ~~similar~~cash ~~terminology. Although~~flows ~~the~~of ~~Company believes that~~ the ~~expectations~~four ~~reflected in such forward-looking statements will prove to have been correct, it can give no assurance that such expectations will prove to be correct~~restaurants. ~~Factors~~The ~~that~~carrying ~~could cause actual results to~~amount ~~materially differ include, without limitation: (a) the Company’s high degree~~ of ~~leverage which could, among other things, reduce~~ the ~~Company’s ability~~assets toexceeded ~~obtain financing for operations and expansion, place~~ the ~~Company~~fair ~~at a~~value ~~competitive disadvantage and limit the Company’s flexibility to adjust to changing market conditions; (b) the challenges~~ of ~~managing geographic expansion; (c) changes in food costs, supplies and key supplier relationships; and (d)~~ the ~~possible~~assets ~~adverse~~by ~~impact~~approximately ~~of government~~$0.9 ~~regulation on the Company~~million. ~~Other~~The ~~factors that could adversely affect the~~ Company’s ~~business~~recorded ~~and~~an ~~prospects~~impairment ~~are~~charge ~~described~~during ~~in its filings with~~ the ~~Securities~~ ~~and~~quarter ~~Exchange Commission. Investors are cautioned not~~ to ~~place~~ ~~undue~~reflect ~~reliance~~the onwrite ~~these~~down ~~forward-looking statements, which speak only as~~ of the ~~date~~ ~~hereof. The~~affected ~~Company~~assets ~~undertakes no obligation~~ to ~~publicly~~fair ~~release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events~~value.

~~The~~Item ~~following~~2. ~~discussion should be read in conjunction with the condensed consolidated financial statements of Bertucci~~MANAGEMENT’~~s Corporation~~S ~~(the~~DISCUSSION ~~“Company”),~~AND ~~and~~ANALYSIS ~~the~~OF ~~notes~~FINANCIAL ~~thereto~~CONDITION ~~included~~AND ~~herein,~~RESULTS asOF ~~well as the Company’s 2004 Annual Report.~~OPERATIONS

~~General~~Forward-Looking Statements

~~Bertucci~~All statements other than statements of historical facts included in this Report on Form 10-Q, including, without limitation, statements set forth under this “Management’s ~~Corporation,~~Discussion aand ~~Delaware~~Analysis ~~corporation~~of Financial (Condition and Results of Operations” regarding the “Company~~”),~~’s future isfinancial ~~the~~position, ~~owner~~business strategy, budgets, projected costs and ~~operator~~plans and objectives of amanagement ~~chain~~for future operations, are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of ~~full~~forward-~~service~~looking ~~casual~~terminology ~~dining~~such as “may,” “will,” “expect,” ~~Italian~~“intend,” “estimate,” “anticipate” or “believe” or the negative thereof or variations thereon or similar terminology. Although the Company believes that the expectations reflected in such forward-~~style~~looking ~~restaurants~~statements ~~under~~will prove to have been correct, it can give no assurance that such expectations will prove to be correct. Factors that could cause actual results to materially differ include, without limitation: (a) the ~~names~~Company’s ~~Bertucci~~high degree of leverage which could, among other things, reduce the Company’s ~~Brick~~ability ~~Oven~~to obtain ~~Pizzeria®~~financing for operations and expansion, place the Company at a ~~Bertucci~~competitive disadvantage and limit the Company’s ~~Brick~~flexibility ~~Oven~~to ~~Ristorante®.~~adjust to changing market conditions; (b) Asthe challenges of ~~March~~managing geographic expansion; (c) ~~30,~~changes ~~2005~~in food costs, supplies and key supplier relationships; and (d) the possible adverse impact of government regulation on the Company. Other factors that could adversely affect the ~~operated~~Company’s 92business ~~restaurants~~and ~~located~~prospects ~~primarily~~are described in its filings with the SEC. Investors ~~northeastern~~are ~~United~~cautioned ~~States~~not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

InThe ~~July 1998,~~following ~~the~~discussion ~~Company~~should ~~completed~~be ~~its~~read in ~~acquisition~~conjunction ofwith ~~Bertucci’s~~the ~~Restaurant~~condensed ~~Corp.’s~~consolidated ~~parent~~financial ~~entity,~~statements of Bertucci’s~~, Inc.,~~ ~~for~~Corporation ~~a purchase price, net of cash received, of approximately $89.4 million~~ (the “~~Acquisition~~Company”)~~. The~~, ~~Company~~and ~~financed~~ the ~~Acquisition~~notes ~~primarily~~thereto ~~through the~~included ~~issuance~~herein, ofas ~~$100~~well ~~million~~as the ofOriginal 2004 10-K, ¾as %amended ~~senior~~by ~~notes due 2008 (~~the ~~“Senior~~2004 ~~Notes”). The~~Annual ~~Senior~~Report ~~Notes are still outstanding as to $85~~Amendment.~~3 million in principal.~~

Management’s Discussion and Analysis of Financial Condition and Results of Operations gives effect to the restatement of the Consolidated Financial Statements discussed in Note 3 of the Notes to the Condensed Consolidated Financial Statements.10

11General

~~Results~~Bertucci’s Corporation, a Delaware corporation (the “Company”), is the owner and operator of ~~Operations~~a chain of full-service casual dining, Italian-style restaurants under the names Bertucci’s Brick Oven Pizzeria® and Bertucci’s Brick Oven Ristorante®. As of September 28, 2005, the Company operated 92 restaurants located primarily in the northeastern United States.

~~The~~In ~~following~~July 1998, ~~table~~the ~~sets~~Company ~~forth~~completed ~~the~~its acquisition ~~percentage~~of Bertucci’s Restaurant Corp.’s parent entity, Bertucci’s, Inc., ~~relationship~~for toa ~~net~~purchase ~~sales~~price, ~~unless~~net ~~otherwise~~of ~~indicated~~cash received, of ~~certain~~approximately ~~items included~~$89.4 inmillion (the “Acquisition”). The Company’s ~~condensed~~financed ~~consolidated~~the ~~statements~~Acquisition primarily through the issuance of ~~operations,~~$100 ~~as well~~million asof ~~certain~~10 ~~operating~~¾ ~~data,~~% ~~for~~senior notes due 2008 (the ~~periods~~“Senior ~~indicated:~~Notes”). The Senior Notes are still outstanding as to $85.3 million in principal.

~~STATEMENTS~~Management’s OFDiscussion ~~OPERATIONS~~and ~~DATA~~Analysis of Financial Condition and Results of Operations gives effect to the restatement of the Consolidated Financial Statements discussed in Note 3 of the Notes to the Condensed Consolidated Financial Statements.

~~(Percentage~~Results of ~~Net Sales)~~Operations

	Thirteen weeks ended
	March 30, 2005		March 31, 2004
Net sales	100.0	%	100.0	%
Cost of sales and expenses:
Cost of sales	23.7	%	23.4	%
Operating expenses	61.0	%	59.9	%
General and administrative expenses	7.0	%	6.3	%
Depreciation, amortization, deferred rent, and pre-opening expenses	6.5	%	6.7	%
Total cost of sales and expenses	98.2	%	96.3	%
Income from operations	1.8	%	3.7	%
Interest expense, net	(5.3	)%	(5.3	)%
Loss before income taxes	(3.5	)%	(1.6	)%
Income taxes	—		—
Net loss	(3.5	)%	(1.6	)%
Restaurant Operating Data:
Increase in comparable restaurant sales (a)	(1.6	)%	4.9	%
Number of restaurants:
Restaurants open, beginning of period	91		89
Restaurants opened	1		1
Total restaurants open, end of period	92		90

The following table sets forth the percentage relationship to net sales, unless otherwise indicated, of certain items included in the Company’s condensed consolidated statements of operations, as well as certain operating data, for the periods indicated:

~~(a) The Company~~STATEMENTS ~~defines~~OF ~~comparable~~OPERATIONS ~~restaurant sales as net sales from restaurants that have been open for at least one full fiscal year at the beginning of the fiscal year.~~DATA

~~Thirteen~~(Percentage ~~Weeks~~of ~~Ended~~Net ~~March 30, 2005 Compared to Thirteen Weeks Ended March 31, 2004~~Sales)

Net Sales. Total net sales increased by $600,000, or 1.2%, to $50.0 million during the first quarter of 2005 from $49.4 million during the first quarter of 2004. The increase was primarily due to 32 incremental restaurant weeks from three restaurants opened since January 2004 offset by a 1.6% decrease in the 89 comparable restaurants’ sales. Comparable Bertucci’s restaurant dine-in guest counts decreased 1.9% for the first quarter of 2005 as compared to the first quarter of 2004. Bertucci’s comparable restaurant dine-in sales decreased 2.5% and comparable carry-out and delivery sales increased 1.5% for the quarter as compared to the first quarter of 2004. The Company believes comparable sales were down primarily due to the aforementioned guest count decreases while an anticipated menu mix shift to lower priced items also contributed to the decrease. For the 89 comparable restaurants, average weekly sales were approximately $42,000 for the first quarter of 2005 compared to approximately $42,600 per week for the first quarter of 2004.

	Thirteen weeks ended				Thirty-nine weeks ended
	September 28,		September 29,		September 28,		September 29,
	2005		2004		2005		2004

Net sales	100.0	%	100.0	%	100.0	%	100.0	%

Cost of sales and expenses:
Cost of sales	22.8	%	24.9	%	23.3	%	24.4	%
Operating expenses	60.5	%	59.9	%	60.4	%	61.6	%
General and administrative expenses	7.5	%	5.4	%	6.9	%	6.1	%
Asset impairment charge	—		—		0.6	%	2.6	%
Depreciation, amortization, deferred rent, and pre-opening expenses	5.2	%	6.6	%	5.8	%	6.3	%
Total cost of sales and expenses	96.0	%	96.8	%	97.0	%	101.0	%

Income (loss) from operations	4.0	%	3.2	%	3.0	%	(1.0	)%
Interest expense, net	(5.3	)%	(5.4	)%	(5.2	)%	(5.3	)%
Loss before income taxes	(1.3	)%	(2.2	)%	(2.2	)%	(6.3	)%

Income taxes	—		—		—		—

Net loss	(1.3	)%	(2.2	)%	(2.2	)%	(6.3	)%

Restaurant Operating Data:
Increase in comparable restaurant sales (a)	(1.3	)%	1.0	%	(1.2	)%	2.9	%
Number of restaurants:
Restaurants open, beginning of period	92		90		91		89
Restaurants opened	—		1		1		2
Total restaurants open, end of period	92		91		92		91

~~Cost~~(a) The ofCompany ~~Sales. Cost~~defines ofcomparable restaurant sales ~~increased by approximately $300,000, or 2.6%, to $11.9 million during the first quarter of 2005 from $11.6 million during the first quarter 2004. Expressed~~ as ~~a percentage of~~ net sales, ~~overall~~from ~~cost~~restaurants ofthat ~~sales~~have ~~increased~~been toopen ~~23.7%~~for ~~during~~at ~~the first~~least ~~quarter~~one offull ~~2005~~fiscal ~~from~~year ~~23.4%~~at ~~during~~ the ~~first~~beginning ~~quarter~~ of ~~2004. Of this $300,000 increase approximately $125,000 resulted from~~ the ~~increase~~fiscal ~~in net sales, and approximately $175,000 can be attributed to increases in certain ingredient costs, such as chicken, tomatoes, flour and bacon~~year.

12Thirteen Weeks Ended September 28, 2005 Compared to Thirteen Weeks Ended September 29, 2004

~~Operating~~Net ~~Expenses~~Sales. ~~Operating~~Total ~~expenses~~net sales increased by approximately $~~900~~400,000 , or 3.0.8%, to $3049.57 million during the ~~first~~third quarter of 2005 from $2949.63 million during the ~~first~~third quarter of 2004. ~~Expressed~~The asincrease was aprimarily ~~percentage~~due ofto ~~net~~25.6 ~~sales,~~incremental restaurant weeks from three restaurants ~~operating~~opened ~~expenses~~since ~~increased~~January 2004 tooffset 61by a 1.03% decrease in the ~~first~~89 comparable restaurants’ sales. Comparable Bertucci’s restaurant dine-in guest counts decreased 1.6% for the third quarter of 2005 ~~from~~as 59compared to the third quarter of 2004.9 Bertucci’s comparable restaurant dine-in sales decreased 2.3% ~~during~~and comparable carry-out and delivery sales increased 2.8% for the ~~first~~quarter as compared to the third quarter of 2004. ~~The~~For ~~dollar~~the ~~increase~~89 ~~was~~comparable ~~primarily~~restaurants, average ~~due~~weekly sales were approximately $41,700 for the third quarter of 2005 compared to ~~the~~approximately ~~opening~~$42,200 ~~and~~per ~~operation~~week offor the ~~three~~third ~~non-comparable~~quarter ~~restaurants~~of 2004.

General and Administrative Expenses. General and administrative expenses increased by approximately $400,000, or 12.9%, to $3.5 million during the first quarter of 2005 from $3.1 million during the first quarter of 2004. Expressed as a percentage of net sales, general and administrative expenses increased to 7.0% in the first quarter of 2005 from 6.3% in the first quarter of 2004. The dollar increase over the prior year period is primarily attributable to: (a) stock compensation expense relating to the award of 31,500 shares of common stock to key members of management and independent members of the Board of Directors; and (b) bonus expense accruals as year-to-date results are currently exceeding targeted levels under the Company’s bonus plan.11

~~Depreciation,~~Cost ~~Amortization, Deferred~~of ~~Rent and Pre-opening Expenses~~Sales. ~~Depreciation, amortization, deferred rent and pre-opening~~ Cost ~~expenses~~of sales decreased by approximately $~~100~~1 million,~~000,~~ or 38.01%, to $311.23 million ~~during~~ during the ~~first~~third quarter of 2005 from $312.3 million during the ~~first~~third quarter of 2004. ~~The decrease is primarily due to reduced deferred rent.~~ Expressed as a percentage of net sales, ~~depreciation,~~overall ~~amortization,~~cost ~~deferred~~of ~~rent and pre-opening~~sales ~~expenses~~ decreased to 622.58% induring the ~~first~~third quarter of 2005 from 624.79% during the ~~first~~third quarter of 2004. Of this 2.1% decrease, approximately 0.4% is attributed to a menu mix shift generally to lower priced, lower cost items, approximately 1.3% was due to decreases in certain ingredient costs, and approximately 0.4% from improved restaurant cost controls.

~~Interest~~Operating ~~Expense~~Expenses. Operating expenses increased by approximately $600,000, ~~net~~or 2. ~~Net~~0%, ~~interest~~to ~~expense~~$30.1 ~~was~~million during the third quarter of ~~essentially~~2005 ~~flat~~from in$29.5 million during the ~~first~~third quarter of ~~2005~~2004. Expressed ~~compared~~as a percentage of net sales, operating expenses increased to 60.5% in the ~~first~~third quarter of 2005 from 59.9% during the third quarter of 2004. The increase is primarily due to the timing of marketing expenditures ($1 million) and increased utility costs ($500,000) partially offset by reduced employee benefit costs and other insurance ($900,000).

~~Income~~General ~~Taxes~~and Administrative Expenses. ~~The~~ General ~~Company~~and ~~has~~administrative anexpenses ~~historical~~increased ~~trend~~by approximately $1.0 million, or 37.0%, to $3.7 million during the third quarter of ~~recurring~~2005 ~~pre-tax~~from ~~losses~~$2. ~~The~~7 ~~Company~~million ~~previously~~during ~~recorded~~the athird ~~full~~quarter ~~valuation~~of ~~allowance~~2004. Expressed ~~for~~as ~~its~~a ~~net~~percentage ~~deferred~~of ~~tax~~net sales, ~~asset~~general and administrative expenses increased to 7. ~~The~~5% ~~Company~~in ~~also~~the ~~provided~~third aquarter ~~full~~of ~~valuation~~2005 ~~allowance~~from ~~relating~~5.4% toin the ~~tax~~third ~~benefits~~quarter ~~generated~~of ~~since~~2004. The ~~2003~~dollar increase over the (prior year period is primarily ~~from~~attributable ~~its~~to ~~operating~~bonus ~~losses).~~ expense accruals as Asyear-to-date ofcash ~~December 29,~~flow ~~2004,~~results ~~the~~are ~~Company~~currently ~~had~~exceeding ~~net~~targeted ~~operating~~levels ~~losses~~under ~~and~~the ~~tax~~Company’s ~~credit~~bonus ~~carry~~plan ~~forwards~~as ~~totaling~~well as prior year accrual reductions of $7266,000.~~8 million.~~

~~Liquidity~~Depreciation, Amortization, Deferred Rent and ~~Capital~~Pre-opening ~~Resources~~Expenses. Depreciation, amortization, deferred rent and pre-opening expenses decreased by approximately $600,000, or 18.8%, to $2.6 million during the third quarter of 2005 from $3.2 million during the third quarter of 2004. The decrease is primarily due to pre-opening expenses of a restaurant opening in the third quarter of 2004 versus no opening in the third quarter of 2005. Expressed as a percentage of net sales, depreciation, amortization, deferred rent and pre-opening expenses decreased to 5.2% in the third quarter of 2005 from 6.6% during the third quarter of 2004.

~~The~~Interest ~~Company~~Expense, ~~has~~net. Net ~~historically~~interest ~~met~~expense ~~its capital expenditures and working capital needs through a combination~~ of ~~operating~~$2.6 ~~cash~~million ~~flow~~was ~~and~~essentially ~~bank~~flat ~~and~~as ~~mortgage~~compared ~~borrowings,~~to the ~~sale~~third ofquarter ~~the Senior Notes, the sale~~ of ~~Common Stock, and, in fiscal 2003, two sale leaseback transactions~~2004. ~~Future capital and working capital needs are expected to be funded from net cash flows provided by operating cash flow and cash on hand.~~

~~Net~~Income ~~cash~~Taxes. The ~~flows~~Company ~~used~~has inan ~~operating~~historical ~~activities~~trend of ~~were~~recurring $1pre-tax losses.9 The Company ~~million~~previously ~~for~~recorded ~~the~~a ~~first~~full ~~quarter~~valuation ofallowance ~~2005,~~for ~~approximately~~its ~~$200,000~~net ~~more~~deferred ~~than~~tax asset. The ~~the~~Company ~~$1.7~~also provided a full ~~million~~valuation ~~used~~allowance ~~during~~relating to the ~~first~~tax ~~quarter~~benefits ofgenerated ~~2004~~since 2003 (primarily from its operating losses). As of ~~March~~December 3029, ~~2005~~2004, the Company had ~~cash~~net operating losses and tax ~~cash~~credit ~~equivalents~~carry offorwards totaling $97.8 million.

~~The~~Thirty-Nine ~~Company’s~~Weeks ~~capital~~Ended ~~additions were $764~~September 28,~~000 during~~ ~~the first quarter of~~ 2005 ~~compared~~Compared to ~~$1.8~~Thirty-Nine ~~million~~Weeks ~~for~~Ended ~~the comparable prior year period. The capital expenditures were primarily comprised of $367~~September 29,~~000 for~~ a new restaurant which opened in the first quarter of 2005 and $397,000 for remodeling and maintenance capital. The Company anticipates capital expenditures for the remainder of 2005 will be approximately $4.3 million.2004

AsNet ofSales. Total ~~March 30,~~net ~~2005,~~sales ~~the~~increased ~~Company~~by approximately ~~had~~ $921.2 8 million, inor ~~consolidated indebtedness~~1.2%, to $85152.32 million ~~pursuant~~during to the ~~Senior~~first three ~~Notes,~~quarters of 2005 from $6150.14 million during the first three quarters of 2004. The ~~capital~~increase ~~lease~~was ~~obligations,~~primarily ~~and~~due $0to 83.86 ~~million~~incremental ofrestaurant weeks ~~promissory~~from ~~notes. The~~three ~~Senior~~restaurants ~~Notes~~opened ~~contain~~since noJanuary 2004 ~~financial~~offset ~~covenants~~by ~~and~~a ~~the~~1.2% decrease ~~Company~~in isthe in89 ~~compliance~~comparable ~~with~~restaurants’ ~~all~~sales. ~~non~~Comparable Bertucci’s restaurant dine-~~financial~~in ~~covenants~~guest ascounts decreased 1.2% for the first three quarters of ~~May 11,~~ 2005 as compared to the first three quarters of 2004. ~~The~~Bertucci’s ~~Senior~~comparable restaurant ~~Notes~~dine-in ~~bear~~sales ~~interest~~decreased at1.9% and comparable carry-out and delivery sales increased 1.7% for the ~~rate~~first three quarters of 102005 ¾%as ~~per~~compared ~~annum,~~to ~~payable~~the first ~~semi-annually~~three onquarters ~~January~~of 2004. 15For ~~and~~the ~~July 15. The~~89 ~~Senior~~comparable ~~Notes~~restaurants, ~~are~~average weekly ~~due~~sales inwere ~~full~~approximately on$42,600 ~~July 15~~for the first three quarters of 2005 compared to approximately $43,000 per week for the first three quarters of ~~2008~~2004.

13Cost of Sales. Cost of sales decreased by approximately $1.2 million, or 3.3%, to $35.5 million during the first three quarters of 2005 from $36.7 million during the first three quarters 2004. Expressed as a percentage of net sales, overall cost of sales decreased to 23.3% during the first three quarters of 2005 from 24.4% during the first three quarters of 2004. Of this 1.1% decrease, approximately 0.3% is attributed to a menu mix shift generally to lower priced, lower cost items, approximately 0.5% was due to decreases in certain ingredient costs, and approximately 0.3% from improved restaurant cost controls.

~~Through~~Operating ~~July 15~~Expenses. Operating expenses decreased by $700,000, ~~2006~~or 0.8%, to $91.9 million during the ~~Company~~first ~~may,~~three atquarters ~~its~~of 2005 ~~option,~~from ~~redeem~~$92.6 ~~any~~million orduring ~~all~~the offirst ~~the~~three ~~Senior~~quarters ~~Notes~~of at2004. Expressed ~~face~~as a ~~value,~~percentage ~~plus~~of anet ~~declining premium~~sales, ~~which~~operating isexpenses 3decreased to 60.584% ~~through~~in ~~July 14,~~the first three quarters of 2005 ~~and~~from 161.796% ~~from~~during ~~July 15, 2005~~the ~~through~~first ~~July 15,~~three ~~2006~~quarters of 2004. ~~After~~The ~~July 15, 2006,~~dollar ~~the~~decrease ~~Senior~~was ~~Notes~~primarily ~~may~~due beto ~~redeemed~~lower atmarketing expenditures ~~face value~~($1.8 ~~Additionally,~~million ~~under certain~~less ~~circumstances,~~than ~~including~~the aprior ~~change~~year), ofpartially ~~control~~offset orby increased ~~following~~utility ~~certain~~costs ~~asset sales,~~and the ~~holders~~operation of ~~the~~three ~~Senior~~non-comparable ~~Notes~~restaurants. The ~~may~~Company ~~require~~expects ~~the~~marketing ~~Company~~expenditures tofor ~~repurchase the~~all ~~Senior~~of ~~Notes,~~2005 atwill abe ~~redemption~~approximately $1.0 ~~price~~million ofless ~~101%~~than ofin ~~face value~~2004.

~~The Company is operating without a line of credit and is funding all of its capital expenditures, debt reductions and operating needs out of cash flows from operations and cash on hand.~~12

~~The~~General ~~Company~~and ~~has~~Administrative Expenses. General ~~established~~and aadministrative expenses increased by approximately $41.03 million, ~~(maximum)~~or ~~letter~~14.1%, ofto ~~credit~~$10.5 ~~facility~~million ~~(expiring~~during inthe ~~December 2005)~~first asthree ~~collateral~~quarters ~~with~~of 2005 from $9.2 ~~third~~million ~~party~~during ~~administrators~~the ~~for~~first ~~self~~three ~~insurance~~quarters ~~reserves~~of 2004. AsExpressed as a percentage of ~~March 30~~net sales, general and administrative expenses increased to 6.9% ~~2005,~~in ~~this~~the ~~facility~~first isthree ~~collateralized~~quarters ~~with~~of $22005 from 6.21% ~~million~~in the first three quarters of 2004. The dollar increase over the prior year period is primarily attributable to: (a) bonus expense accruals as year-to-date cash ~~restricted~~flow ~~from~~results are ~~general~~currently ~~use. Letters~~exceeding oftargeted ~~credit~~levels ~~totaling~~under the Company’s bonus plan while the prior year did not ($21.2 million); ~~were~~and ~~outstanding~~(b) stock oncompensation ~~March 30~~expense relating to the award of 37,500 shares of common stock to key members of ~~2005~~management and independent members of the Board of Directors (approximately $262,000 including associated payroll taxes).

~~The~~Asset ~~Company~~Impairment ~~believes~~Charge. During the ~~cash~~second ~~flow~~quarter ~~generated from~~of ~~its~~2005, ~~operations~~the ~~and~~Company ~~cash~~assessed oncertain ~~hand~~non-performing ~~should~~restaurants befor recoverability ~~sufficient~~and todetermined ~~fund~~an ~~its~~impairment ~~debt~~of ~~service requirements,~~fixed ~~lease~~assets ~~obligations,~~existed ~~expected~~at ~~capital~~four restaurant ~~expenditures~~locations. The ~~and~~Company ~~other operating~~estimated ~~expenses~~the ~~through~~fair ~~2005. Beyond~~value ~~2005~~of ~~and~~these assets upbased toon the ~~2008~~net ~~maturity of~~present ~~its~~value ~~Senior~~of ~~Notes,~~ the ~~Company~~expected ~~expects~~cash toflows beof ~~able~~the tofour restaurants. The ~~service~~carrying ~~its~~amount ~~debt,~~of ~~but~~ the ~~lack~~assets ofexceeded ~~short~~the ~~term~~fair ~~borrowing~~value ~~availability~~of the ~~may~~assets ~~impede~~by ~~growth~~approximately $0.9 million. The Company isrecorded an ~~evaluating~~impairment ~~various~~charge ~~refinancing~~during ~~alternatives~~the ~~for~~quarter ~~its~~to ~~Senior~~reflect ~~Notes~~the ~~upon~~write ~~their~~down of the affected ~~maturity~~assets into ~~2008~~fair value.

~~The~~Depreciation, ~~Company’s~~Amortization, Deferred ~~future~~Rent ~~operating performance~~and Pre-opening Expenses. Depreciation, amortization, deferred rent and ~~ability~~pre-opening expenses todecreased ~~service~~by approximately $700,000, or ~~refinance~~7.4%, to $8.8 million during the ~~Senior~~first ~~Notes~~three ~~will~~quarters beof 2005 from $9.5 million during the first three ~~subject~~quarters toof ~~future~~2004. The ~~economic~~decrease ~~conditions~~is ~~and~~primarily due to ~~financial,~~reduced ~~business~~deferred rent as the majority of restaurant leases are past the half-way point of their primary terms and ~~other~~includable renewal periods. Additionally, pre-opening ~~factors~~expenses were $280,000 ~~many~~less than in 2004 due to one restaurant opening in 2005 versus three in 2004. Expressed as a percentage of ~~which~~net ~~are~~sales, ~~beyond~~depreciation, amortization, ~~the~~deferred ~~Company’s~~rent ~~control~~and pre-opening expenses decreased to 5. ~~Significant~~8% in the ~~liquidity~~first ~~demands~~three ~~will~~quarters ~~arise~~of 2005 from ~~debt~~6.3% ~~service~~during on the ~~Senior~~first ~~Notes~~three quarters of 2004.

~~There~~Interest ~~have~~Expense, ~~been~~net. Net nointerest ~~material~~expense ~~changes~~decreased by approximately $100,000, or 1.3%, to $7.9 million during the ~~Company's~~ ~~contractual~~first ~~obligations~~three quarters ~~and~~of ~~commitments~~2005 from ~~those~~$8.0 ~~disclosed~~million induring the ~~Company's~~ ~~2004~~first ~~Annual~~three ~~Report~~quarters of 2004.

~~Impact~~Income Taxes. The Company has an historical trend of ~~Inflation~~recurring pre-tax losses. The Company previously recorded a full valuation allowance for its net deferred tax asset. The Company also provided a full valuation allowance relating to the tax benefits generated since 2003 (primarily from its operating losses). As of December 29, 2004, the Company had net operating losses and tax credit carry forwards totaling $7.8 million.

~~Inflationary~~Liquidity factors such as increases in labor, food or other operating costs could adversely affect the Company’s operations. The Company does not believe inflation has had a material impact on its financial position or results of operations for the periods discussed above. Management believes through the proper leveraging of purchasing size, labor scheduling, and ~~restaurant~~Capital development analysis, inflation will not have a material adverse effect on operations during the foreseeable future. There can be no assurance inflation will not materially adversely affect the Company.Resources

~~Seasonality~~The Company has historically met its capital expenditures and working capital needs through a combination of operating cash flow and bank and mortgage borrowings, the sale of the Senior Notes, the sale of Common Stock, and, in fiscal 2003, two sale leaseback transactions. Future capital and working capital needs are expected to be funded from net cash flows provided by operating cash flow and cash on hand.

~~The~~Net ~~Company’s~~cash ~~quarterly~~flows ~~results~~provided of operations have fluctuated and are expected to continue to fluctuate depending on a variety of factors, including the timing of new restaurant openings and related pre-opening and other startup expenses, net sales contributed by ~~new restaurants,~~operating ~~increases~~activities ~~or decreases in comparable restaurant sales, competition~~were ~~and~~approximately ~~overall economic conditions~~$4. ~~The~~2 ~~Company’s~~million ~~business~~for isthe ~~also~~first ~~subject to~~three ~~seasonal~~quarters ~~influences~~ of ~~consumer spending~~2005, ~~dining out patterns and~~approximately ~~weather~~$3. As2 ismillion ~~the~~more ~~case~~than ~~with many restaurant companies,~~ the ~~Company typically~~approximate ~~experiences~~$1.0 ~~lower~~million ~~net~~provided ~~sales and net income~~ during the first ~~and~~ ~~fourth~~three quarters of 2004. ~~Because~~As of ~~these~~September 28, ~~fluctuations~~2005, inthe ~~net~~Company ~~sales~~had cash and ~~net~~cash ~~loss, the~~equivalents ~~results~~ of ~~operations~~$13.8 ~~of any quarter are not necessarily indicative of the results that may be achieved for a full year or any future quarter~~million.

~~Critical~~The ~~Accounting~~Company’s ~~Policies~~capital additions were approximately $3.3 million during the first three quarters of 2005 compared to approximately $6.4 million for the comparable prior year period. The capital expenditures were primarily comprised of $419,000 for a new restaurant which opened in the first quarter of 2005 and $2.9 million for remodeling and ~~Estimates~~maintenance capital. The Company anticipates capital expenditures for the remainder of 2005 will be approximately $1.7 million.

~~The~~As ~~discussion~~of ~~and~~September ~~analysis~~28, of2005, the Company’s ~~financial~~had ~~condition~~$92.2 million ~~and~~in ~~results~~consolidated indebtedness, $85.3 million pursuant to the Senior Notes, $6.1 million of ~~operations~~capital ~~are~~lease ~~based~~obligations, ~~upon~~and ~~its~~$0.8 million of ~~consolidated~~promissory notes. The Senior Notes contain no financial ~~statements~~covenants and the Company, ~~which~~as ~~have~~of ~~been~~the ~~prepared~~filing inof ~~accordance~~this ~~with accounting~~report ~~principles~~on ~~generally~~Form 10-Q, ~~accepted~~is in ~~the~~compliance with ~~United~~all ~~States~~non-financial ofcovenants ~~America~~related to the Senior Notes. The ~~preparation~~Senior ofNotes ~~these~~bear ~~financial~~interest ~~statements requires~~at the ~~Company~~rate toof 10 ~~make~~¾% ~~estimates~~per annum, payable semi-annually on January 15 and ~~judgments~~July 15. The ~~affecting~~Senior ~~the~~Notes ~~reported amounts~~are ofdue ~~assets,~~in ~~liabilities~~full on July 15, 2008.

14Through July 15, 2006, the Company may, at its option, redeem any or all of the Senior Notes at face value, plus a declining premium, which is 1.79% through July 15, 2006. After July 15, 2006, the Senior Notes may be redeemed at face value. Additionally, under certain circumstances, including a change of control or following certain asset sales, the holders of the Senior Notes may require the Company to repurchase the Senior Notes, at a redemption price of 101% of face value.

revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, estimates are evaluated, including those related to the impairment of long-lived assets, self-insurance, and closed restaurants reserve. Estimates are based on historical experience and on various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. For a discussion of how these and other factors may affect the Company's business, see the "Forward-Looking Statements" above and other factors included in the Company's other filings with the Securities and Exchange Commission.13

The Company's ~~critical~~is ~~accounting policies~~operating ~~affect~~without ~~the~~a ~~more~~line ~~significant~~of ~~judgments~~ credit and ~~estimates~~is ~~used~~funding inall ~~the preparation~~ of ~~the Company’s consolidated financial statements. The Company believes~~ its ~~critical~~capital ~~accounting policies relate to the impairment of long-lived assets~~expenditures, ~~income~~debt ~~tax~~reductions ~~valuation allowances, self-insurance~~ and ~~closed restaurant reserves. For a more detailed~~operating ~~discussion~~needs ofout ~~the Company’s critical accounting policies and estimates, please refer to "Management's Discussion and Analysis~~ of ~~Financial~~cash ~~Condition~~flows ~~and Results~~from ofoperations ~~Operations - Critical Accounting Policies~~ and ~~Estimates" contained~~cash inon ~~the Company's 2004 Annual Report~~hand. ~~There have been no material changes to the Company's critical accounting policies and estimates from those disclosed in the 2004 Annual Report.~~

~~Item~~The 3Company has a $4.0 million (maximum) letter of credit facility (which was renewed in December 2005) as collateral with third party administrators for self insurance reserves. ~~QUANTITATIVE~~As ~~AND~~of ~~QUALITATIVE~~September 28, 2005 ~~DISCLOSURE~~and ~~ABOUT~~the filing of this report on Form 10-Q, this facility was ~~MARKET~~collateralized ~~RISK~~with $2.2 million of cash restricted from general use. Letters of credit totaling $2.2 million were outstanding on September 28, 2005 and as of the filing of this report on Form 10-Q.

The Company ~~has~~believes nothe ~~exposure~~cash toflow ~~specific~~generated from ~~risks~~its ~~related~~operations toand ~~derivatives~~cash oron ~~other~~hand ~~“hedging”~~should ~~types~~be ofsufficient ~~financial~~to fund its debt service ~~instruments. In~~requirements, ~~addition~~lease obligations, ~~the~~expected ~~Company~~capital expenditures and other ~~does~~operating ~~not~~expenses ~~have~~for ~~operations~~the ~~outside~~next oftwelve months. Until the ~~United~~2008 ~~States~~maturity of ~~America~~its Senior ~~which~~Notes, ~~expose it~~the Company expects to ~~foreign~~be ~~currency~~able ~~risk~~to ~~and~~service ~~substantially~~its ~~all~~debt, ofbut the lack of short term borrowing availability may impede growth. The Company’s ~~outstanding~~is ~~debt~~evaluating ~~has~~various ~~fixed~~refinancing ~~interest~~alternatives ~~rates~~for its Senior Notes prior to their maturity in 2008.

~~Item~~The 4Company’s future operating performance and ability to service or refinance the Senior Notes will be subject to future economic conditions and to financial, business and other factors, many of which are beyond the Company’s control. Significant liquidity ~~CONTROLS~~demands ~~AND~~will ~~PROCEDURES~~arise from debt service on the Senior Notes.

a)There ~~Disclosure~~have ~~Control~~been ~~and Procedures. The Company~~no ~~maintains~~material ~~disclosure~~changes ~~controls and procedures designed~~ to ~~ensure~~ ~~information required to be disclosed in~~ the Company’s ~~reports~~contractual ~~under~~obligations ~~the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized~~ and ~~reported~~commitments ~~within~~from ~~the~~those ~~time~~disclosed ~~periods specified~~ in ~~the SEC’s~~ ~~rules and forms, and such information is accumulated and communicated to~~ the ~~Company’s~~Original ~~management,~~2004 including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as the Company’s are designed to do, and management necessarily was required to apply its judgment in evaluating the cost10-~~benefit relationship of possible controls and procedures~~K.

AsImpact of March 30, 2005, an evaluation was performed under the supervision and with the participation of the Company’s management, including the CEO and CFO, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of March 30, 2005.Inflation

b)Inflationary ~~Changes~~factors such as increases in labor, ~~Internal~~food ~~Controls~~or ~~Over~~other ~~Financial~~operating ~~Reporting. In connection~~costs ~~with~~could ~~preparation~~adversely ofaffect the Company’s ~~2004 Annual Report, and in~~ ~~light~~operations. The ofCompany ~~the~~does ~~restatement~~not ofbelieve ~~all~~inflation ~~financial~~has ~~statements~~had ~~for~~a ~~all~~material impact ~~periods~~on ~~prior~~its tofinancial ~~September 29, 2004~~position ~~discussed~~or inresults ~~Note 3~~ of ~~Notes~~operations tofor ~~Consolidated~~the ~~Financial Statements included~~periods indiscussed ~~the~~above. Management ~~2004~~believes ~~Annual~~through ~~Report,~~ the ~~Company concluded~~proper aleveraging ~~material weakness~~of ~~existed~~purchasing insize, ~~the~~labor ~~Company’s~~scheduling, ~~internal control over financial reporting as it related to it lease accounting~~ and ~~lease~~restaurant ~~depreciation~~development ~~practices. In March 2005~~analysis, ainflation ~~review~~will ofnot ~~lease~~have ~~accounting~~a ~~practices~~material ~~was~~adverse ~~completed~~effect ~~and~~on ~~additional~~operations ~~controls~~during the ~~over~~foreseeable ~~lease accounting and lease depreciation practices were implemented~~future. There ~~were~~can be no ~~other~~assurance ~~changes~~inflation inwill ~~the Company’s~~not ~~internal control over financial reporting that occurred during the Company’s last fiscal quarter that have~~ materially ~~affected,~~adversely ~~or are reasonably likely to materially~~ affect, the Company~~’s internal control over financial reporting~~.

15Seasonality

~~PART II:~~The Company’s quarterly results of operations have ~~OTHER~~fluctuated ~~INFORMATION~~and are expected to continue to fluctuate depending on a variety of factors, including the timing of new restaurant openings and related pre-opening and other startup expenses, net sales contributed by new restaurants, increases or decreases in comparable restaurant sales, competition and overall economic conditions. The Company’s business is also subject to seasonal influences of consumer spending, dining out patterns and weather. As is the case with many restaurant companies, the Company typically experiences lower net sales and net income during the first and fourth quarters. Because of these fluctuations in net sales and net loss, the results of operations of any quarter are not necessarily indicative of the results that may be achieved for a full year or any future quarter.

~~Item 1. LEGAL~~Critical ~~PROCEEDINGS~~Accounting Policies and Estimates

The discussion and analysis of the Company’s isfinancial ~~involved~~condition and results of operations are based upon its consolidated financial statements, which have been prepared in ~~various~~accordance ~~legal~~with accounting ~~proceedings~~principles generally accepted in the United States of America. The preparation of these financial statements ~~from~~requires ~~time~~the Company to ~~time~~make ~~incidental~~estimates toand judgments affecting the ~~conduct~~reported amounts of ~~its~~assets, ~~business~~liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. InOn an ~~the~~on-going ~~opinion~~basis, estimates are evaluated, including those related to the impairment of ~~management~~long-lived assets, ~~any~~self-insurance, ~~ultimate~~and closed restaurant ~~liability~~reserves. ~~arising~~Estimates ~~out~~are based on historical experience and on various other assumptions believed to be reasonable under the circumstances, the results of which ~~such~~form ~~proceedings~~the ~~will~~basis for making judgments about the carrying values of assets and liabilities not ~~have~~readily aapparent ~~material~~from ~~adverse~~other sources. Actual results may ~~effect~~differ onfrom ~~the~~these ~~financial~~estimates ~~condition~~under different assumptions or ~~results~~conditions. ofFor ~~operations~~a discussion of how these and other factors may affect the Company’s business, see the “Forward-Looking Statements” above and other factors included in the Company’s other filings with the SEC.

~~Item~~The Company’s 2critical accounting policies affect the more significant judgments and estimates used in the preparation of the Company’s consolidated financial statements. ~~UNREGISTERED~~The ~~SALES~~Company OFbelieves ~~EQUITY~~its ~~SECURITIES~~critical ~~AND~~accounting ~~USE~~policies OFrelate ~~PROCEEDS~~to the impairment of long-lived assets, income tax valuation allowances, self-insurance and closed restaurant reserves. For a more detailed discussion of the Company’s critical accounting policies and estimates, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” contained in the 2004 Annual Report Amendment. There

During the first quarter of 2005, the Company issued an aggregate of 31,500 shares of its Common Stock as bonuses to two senior employees and several of its officers and independent directors. Each share of Common Stock was valued at $4.56. The Company recorded a $144,000 compensation charge in connection with the grant of these shares. In addition, the Company issued 750 shares of Common Stock to an officer as a bonus in the second quarter of 2005. Each grantee acknowledged in writing the transfer of his or her shares is subject to the provisions of a Stockholder Agreement discussed in Note 8 of the Notes to the Condensed Consolidated Financial Statements. If the grants of such shares are characterized as sales under Section 5 of the Securities Act of 1933, as amended (the “Act”), then the Company believes the grants were exempt from registration under the Act pursuant to the exemption provided by Section 4(2) of the Act. No commissions were paid to any underwriter in connection with the issuance of these shares.14

~~The~~have been ~~grants~~no ~~were~~material ~~issued~~changes asto the Company’s critical accounting policies and ~~follows:~~estimates from those disclosed in the 2004 Annual Report Amendment.

~~On March 1,~~Item ~~2005,~~3. ~~the~~QUANTITATIVE ~~Company issued 2,000~~AND ~~shares~~QUALITATIVE ofDISCLOSURE ~~Common~~ABOUT ~~Stock~~MARKET ~~to each of the three independent directors of the Company (6,000 total shares).~~RISK

~~On March 1,~~The ~~2005~~Company has no exposure to specific risks related to derivatives or other “hedging” types of financial instruments. In addition, the Company ~~issued a~~does ~~total~~not have operations outside of ~~25,500~~the ~~shares~~United States of ~~Common~~America ~~Stock~~which expose it to ~~two~~ ~~senior employees~~foreign currency risk and ~~certain~~substantially ~~officers~~all ~~(nine~~of ~~individuals)~~the Company’s outstanding debt has fixed interest rates.

~~On April 5,~~Item ~~2005,~~4. ~~the~~CONTROLS ~~Company issued 750~~AND ~~shares of Common Stock to an officer.~~PROCEDURES

~~Item~~Disclosure Controls 3and Procedures. ~~DEFAULTS~~The ~~UPON~~Company ~~SENIOR~~maintains ~~SECURITIES~~disclosure controls and procedures designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer (the “CEO”) and Chief Financial Officer (the “CFO”), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as the Company’s are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

~~None~~In connection with the preparation of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 28, 2005, the Company performed an evaluation under the supervision and with the participation of the Company’s management, including the CEO and CFO, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). In performing this evaluation, management became aware of errors in its detailed property and equipment records. These errors involved the calculation of depreciation expense on multiple property records and the related impact on income taxes during the Relevant Period.

~~Item~~Subsequent 4to the discovery of these errors, management conducted an investigation concerning the extent and magnitude of these errors. ~~SUBMISSION~~As OFa ~~MATTERS~~result TOof Athis ~~VOTE~~inquiry, OFon ~~SECURITY~~January 12, 2006 ~~HOLDERS~~the Audit Committee and management concluded that: (1) the Company’s depreciation and income tax expense accounting practices were not appropriate as of September 28, 2005; (2) aggregate additional depreciation expense of approximately $3.5 million needed to be recorded in its financial statements for the Relevant Period, and income tax expense was not properly adjusted in the Initial Restatement, and therefore, its financial statements relating to the Relevant Period were required to be restated; and (3) the Company needed to amend the Subject Filings and restate the financial statements contained therein and reflect the proper recording of depreciation and income tax expense for the periods reported therein (collectively, the “Subject Financial Statements”). See Note 3 of Notes to Condensed Consolidated Financial Statements. Based on the determination the Company’s depreciation and income tax expense accounting practices were not appropriate as of September 28, 2005, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective as of that date.

~~None~~Internal Control Over Financial Reporting. Based on the definition of “material weakness” in the Public Company Accounting Oversight Board’s Auditing Standard No. 2, (An Audit of Internal Control Over Financial Reporting Performed in Conjunction With an Audit of Financial Statements), restatement of the Subject Financial Statements is a strong indicator of the existence of a “material weakness” in the design or operation of internal control over financial reporting. Based on the evaluation of the Company’s controls and procedures, management concluded a material weakness existed in the Company’s internal control over financial reporting as it related to its depreciation expense accounting practices, and disclosed this to the Audit Committee and to the Company’s independent registered public accountants.

~~Item~~Remediation 5Steps to Address Material Weakness. ~~OTHER~~ To ~~INFORMATION~~remediate the material weakness in the Company’s internal control over financial reporting, the Company has re-performed all of the necessary calculations and added sufficient review and approval procedures to assure management the material weakness has been corrected.

AsChange ~~described~~ in Internal ~~Part~~Control Over Financial Reporting. ~~II,~~ There ~~Item~~were 2no ~~above,~~significant changes in the Company’s internal control over financial reporting that occurred during the Company’s ~~issued~~third anfiscal ~~aggregate~~quarter of: 2005 ~~(1) 31~~that materially affected,~~500~~ ~~shares~~or ofare ~~unregistered~~reasonably ~~Common~~likely to materially affect, ~~Stock~~the onCompany’s ~~March 1~~internal control over financial reporting. The Company did, ~~2005;~~however, ~~and~~make ~~(2) 750~~changes ~~shares~~to its internal control over financial reporting in the first fiscal quarter of ~~unregistered~~2006, by ~~Common~~making the changes to its depreciation and income tax expense accounting ~~Stock~~practices onset ~~April 5,~~forth ~~2005~~above.

1615

~~Item~~PART II: OTHER ~~6. EXHIBITS~~ INFORMATION

Exhibits
	31.1		Certification of Stephen V. Clark pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*).
	31.2		Certification of David G. Lloyd pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*).
	(*)	—	Included with this report.

Item 1. LEGAL PROCEEDINGS

~~SIGNATURES~~The Company is involved in various legal proceedings from time to time incidental to the conduct of its business. In the opinion of management, any ultimate liability arising out of such proceedings will not have a material adverse effect on the financial condition or results of operations of the Company.

~~Pursuant~~Item to2. UNREGISTERED ~~the~~SALES ~~requirements~~OF ofEQUITY ~~the~~SECURITIES ~~Securities Exchange~~AND ~~Act~~USE ~~of 1934, the registrant has duly caused this report to be signed~~OF ~~on its behalf by the undersigned thereunto duly authorized.~~PROCEEDS

	BERTUCCI’S CORPORATION
	(Registrant)
Date: May 11, 2005	By:	/s/ Stephen V. Clark
		Chief Executive Officer and Director
Date: May 11, 2005	By:	/s/ David G. Lloyd
		Chief Financial Officer

During the third quarter of 2005, the Company issued 5,250 shares of Common Stock to an officer and a senior employee as a bonus. The Company recorded a compensation charge of $25,905 in connection with the grant of these shares. Each grantee acknowledged in writing the transfer of their shares is subject to the provisions of a Stockholders’ Agreement, which is summarized in “Security Ownership of Certain Beneficial Owners and Management - Shareholders Agreement” in the Original 2004 10-K (“Stockholders’ Agreement”). If the grants of such shares are characterized as sales under Section 5 of the Securities Act of 1933, as amended (the “Act”), then the Company believes the grants were exempt from registration under the Act pursuant to the exemption provided by Section 4(2) of the Act. No commissions were paid to any underwriter in connection with the issuance of these shares.

17The grants were issued as follows:

On July 21, 2005, the Company issued 3,000 shares of Common Stock to an officer.

On August 18, 2005, the Company issued 2,250 shares of Common Stock to a senior employee.

In addition, on September 27, 2005 the Company sold 30,000 shares of Common Stock to each of Stephen V. Clark, a director and Chief Executive Officer of the Company, and David G. Lloyd, a director and President of the Company, for a purchase price of $6.66 per share. The price per share was the Company’s estimate of fair value at the time of the sale, and was approved by the Company’s Board of Directors. Each of Messrs. Clark and Lloyd acknowledged in writing the transfer of their shares is subject to the provisions of the Stockholders’ Agreement. These sales were exempt from registration under the Act pursuant to the exemption provided by Section 4(2) of the Act. No commissions were paid to any underwriter in connection with the sale of these shares.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

Item 5. OTHER INFORMATION

None

Item 6. EXHIBITS

Exhibits

	31.1	Certification of Stephen V. Clark pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*).

	31.2	Certification of David G. Lloyd pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*).

(*)

—

Included with this report.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BERTUCCI’S CORPORATION
	(Registrant)

Date: January 19, 2006	By:	/s/ Stephen V. Clark
		Chief Executive Officer and Director


Date: January 19, 2006	By:	/s/ David G. Lloyd
		Chief Financial Officer and Director

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