8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 15, 2012

Carmike Cinemas, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	000-14993	58-1469127
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)
1301 First Avenue, Columbus, Georgia		31901
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (706) 576-3400

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01. Completion of Acquisition or Disposition of Assets.

On November 15, 2012, Carmike Cinemas, Inc. (the “Corporation”) filed a Current Report on Form 8-K (the “Original 8-K”) reporting the completion of its acquisition (the “Acquisition”) of 16 entertainment complexes in seven U.S. states, pursuant to a Membership Interest Purchase Agreement with Rave Reviews Cinemas, L.L.C. and Rave Reviews Holdings, LLC, and stating that the financial statements and pro forma financial information required under Item 9.01 of Form 8-K would be filed within the time period specified in the instructions to Item 9.01 of Form 8-K. This amended Current Report on Form 8-K contains the required financial statements and pro forma financial information referenced in the Original 8-K.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired

The Rave Reviews Cinemas, L.L.C. and subsidiaries audited financial statements as of December 29, 2011 and December 30, 2010 and for the years ended December 29, 2011, December 30, 2010 and December 31, 2009 are attached as Exhibit 99.2 to this amended Current Report on Form 8-K and incorporated by reference herein.

The Rave Reviews Cinemas, L.L.C. and subsidiaries unaudited financial statements as of and for the nine months ended September 27, 2012 and September 29, 2011 are attached as Exhibit 99.3 to this amended Current Report on Form 8-K and incorporated by reference herein.

The consent of Montgomery Coscia Greilich, LLP, Rave Reviews Cinemas, L.L.C.’s independent public accounting firm, is attached as Exhibit 23.1 to this amended Current Report on Form 8-K.

(b) Pro Forma Financial Information

The following unaudited pro forma financial information related to the Acquisition is attached as Exhibit 99.1 to this amended Current Report on Form 8-K and incorporated by reference herein.

(i) Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2012; and

(ii) Unaudited Pro Forma Condensed Combined Statements of Operations for the year ended December 31, 2011 and the nine months ended September 30, 2012.

(d) Exhibits.

2.1 Membership Interest Purchase Agreement, dated as of September 28, 2012, by and among Carmike Cinemas, Inc., Rave Reviews Cinemas, L.L.C. and Rave Reviews Holdings, LLC (filed as Exhibit 2.1 to the Corporation’s Current Report on Form 8-K filed on October 1, 2012 and incorporated herein by reference). (Schedules and exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K. The Corporation agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request).

23.1 Consent of Montgomery Coscia Greilich, LLP.

99.1 Unaudited Pro Forma Financial Information.

99.2 Rave Reviews Cinemas, L.L.C. and subsidiaries audited financial statements as of December 29, 2011 and December 30, 2010 and for the years ended December 29, 2011, December 30, 2010 and December 31, 2009.

99.3 Rave Reviews Cinemas, L.L.C. and subsidiaries unaudited financial statements as of and for the nine months ended September 27, 2012 and September 29, 2011.

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 hereunto duly authorized.

	CARMIKE CINEMAS, INC.
Date: January 8, 2013	By:	/s/ Richard B. Hare
		Richard B. Hare
		Senior Vice President—Finance, Treasurer and Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
2.1	Membership Interest Purchase Agreement, dated as of September 28, 2012, by and among Carmike Cinemas, Inc., Rave Reviews Cinemas, L.L.C. and Rave Reviews Holdings, LLC (filed as Exhibit 2.1 to the Corporation’s Current Report on Form 8-K filed on October 1, 2012 and incorporated herein by reference). (Schedules and exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K. The Corporation agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request).
23.1	Consent of Montgomery Coscia Greilich, LLP.
99.1	Unaudited Pro Forma Financial Information.
99.2	Rave Reviews Cinemas, L.L.C. and subsidiaries audited financial statements as of December 29, 2011 and December 30, 2010 and for the years ended December 29, 2011, December 30, 2010 and December 31, 2009.
99.3	Rave Reviews Cinemas, L.L.C. and subsidiaries unaudited financial statements as of and for the nine months ended September 27, 2012 and September 29, 2011.

EX-23.1

Exhibit 23.1

Independent Auditors’ Consent

We consent to the incorporation by reference in Registration Statements No. 333-176201, 333-121940, 333-102765, 333-102764, and 333-85194 on Forms S-8 and No. 333-167383 on Form S-3 of Carmike Cinemas, Inc. and subsidiaries of our reports dated September 27, 2012 relating to the audited financial statements of Rave Reviews Cinemas, LLC and subsidiaries for the fiscal years ended December 29, 2011 (Restated), December 30, 2010 (Restated), and December 31, 2009 (Restated) and of our review report, dated December 13, 2012 relating to the reviews of the consolidated financial statements of Rave Reviews Cinemas, LLC and subsidiaries as of September 27, 2012 and September 29, 2011.

Montgomery Coscia Greilich, LLP

Plano, TX

January 4, 2013

EX-99.1

Exhibit 99.1

CARMIKE CINEMAS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

On November 15, 2012, Carmike Cinemas, Inc. (“Carmike” or the “Company”) completed its acquisition of 16 entertainment complexes in seven U.S. states (the “Theatres”) pursuant to the terms of the Membership Interest Purchase Agreement (the “Purchase Agreement”) with Rave Reviews Cinemas, L.L.C (“Rave”) and Rave Reviews Holdings, LLC (“Acquisition Sub”) dated September 28, 2012. Prior to consummation of the acquisition, Rave transferred to the Acquisition Sub the Theatres and certain related assets and certain assumed liabilities, including the leases, related to the Theatres. Carmike subsequently acquired all of the ownership interests of the Acquisition Sub (the “Acquisition”). In consideration for the Acquisition, Carmike paid $20.9 million in cash, including $1.9 million in working capital adjustments. In addition, the Company assumed approximately $110.2 million of capital leases and financing obligations. The purchase price was paid using cash on hand.

The following unaudited pro forma condensed combined balance sheet as of September 30, 2012 and the unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2012 and for the year ended December 31, 2011 are based on the historical financial statements of the Company, adjusted to give effect to the Acquisition, including the acquisition of all of the membership interests of the Acquisition Sub and substantially all of the assets of Rave. The Acquisition did not include four Rave theatres.

The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2012 and for the year ended December 31, 2011 give pro forma effect to the Acquisition as if it had occurred on January 1, 2011. The unaudited pro forma condensed combined balance sheet as of September 30, 2012 assumes that the transaction was effective on September 30, 2012.

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2011 was derived from the Company’s audited consolidated statement of operations for the year ended December 31, 2011 and from Rave’s audited consolidated statement of operations for the year ended December 29, 2011 (as restated).

The unaudited pro forma condensed combined balance sheet and statement of operations as of and for the nine months ended September 30, 2012 were derived from the Company’s unaudited condensed combined financial statements as of and for the nine months ended September 30, 2012 and from Rave’s unaudited condensed combined financial statements as of and for the nine months ended September 27, 2012.

The following unaudited pro forma condensed combined financial information is based on, and should be read in conjunction with:

• The historical audited financial statements of the Company included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2011, and filed with the Securities and Exchange Commission (“SEC”) on March 12, 2012;

• The historical unaudited interim financial statements of the Company included in its quarterly report on Form 10-Q for the three and nine months ended September 30, 2012, and filed with the SEC on November 1, 2012;

• The historical audited consolidated balance sheets of Rave as of December 29, 2011 and December 30, 2010, and the consolidated statements of operations and members’ deficit and cash flows for the years ended December 29, 2011, December 30, 2010 and December 31, 2009, all as restated, attached as Exhibit 99.2 to the current report on Form 8-K/A to which this unaudited pro forma combined condensed financial information is attached (the “Form 8-K/A”); and

• The historical unaudited consolidated balance sheet of Rave as of September 27, 2012 and the consolidated statements of operations and members’ deficit and cash flows of Rave for the nine months ended September 27, 2012 and September 26, 2011, attached as Exhibit 99.3 to the Form 8-K/A.

The unaudited pro forma condensed combined financial information has been prepared by the Company using the acquisition method of accounting in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. The acquisition accounting is dependent on certain valuation and other studies that have yet to progress to a stage where there is sufficient information for a definitive measurement. The assets and liabilities of Rave have been measured based on preliminary estimates using assumptions that the Company believes are reasonable. Differences between these estimates and the final acquisition accounting could occur, and those differences could have a material impact on the accompanying pro forma condensed combined financial statements. Carmike intends to complete the necessary valuation required to finalize the acquisition accounting as soon as practicable, but in no event later than one year following completion of the Acquisition.

The unaudited pro forma condensed combined financial information is presented for informational purposes only and is not necessarily indicative of the financial position or results of operations in future periods or the financial position or results of operations that actually would have been realized had the Company and Rave been a combined company during the specified periods. It also does not reflect any cost savings, operating synergies or revenue enhancements that the Company may achieve with respect to the combined company.

CARMIKE CINEMAS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF SEPTEMBER 30, 2012

	Carmike Historical			Rave Historical			Pro Forma Adjustments (Footnote 3)			Carmike Pro Forma Combined
	(In Thousands, Except Share and Per Share Amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	82,043		$	2,583		$	(23,447	) a	$	61,179
Restricted cash		58			—			—			58
Accounts receivable		4,706			813			(168	) b		5,351
Inventories		2,860			637			(147	) b		3,350
Prepaid expenses and other current assets		9,878			714			(413	) b, c		10,179
Total current assets		99,545			4,747			(24,175	)		80,117
Property and equipment:
Land		52,646			5,735			(5,735	) b		52,646
Buildings and building improvements		269,016			126,534			(48,814	) b, d		346,736
Leasehold improvements		121,853			—			—			121,853
Assets under capital leases		44,970			—			—			44,970
Equipment		220,801			49,669			(32,866	) b, d		237,604
Construction in progress		7,466			—			—			7,466
Total property and equipment		716,752			181,938			(87,415	)		811,275
Accumulated depreciation and amortization		(365,258	)		(85,995	)		85,995	d		(365,258	)
Property and equipment, net of accumulated depreciation		351,494			95,943			(1,420	)		446,017
Goodwill		8,087			—			51,511	e		59,598
Intangible assets, net of accumulated amortization		1,088			—			—			1,088
Investments in unconsolidated affiliates		7,960			—			—			7,960
Other assets		21,020			844			(398	) b, f		21,466
Total assets	$	489,194		$	101,534		$	25,518		$	616,246
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	20,075		$	4,797		$	(961	) b	$	23,911
Accrued expenses		36,671			7,586			(1,193	) b, h		43,064
Current maturities of long-term debt, capital leases and long-term financing obligations		2,216			4,673			(2,376	) g		4,513
Total current liabilities		58,962			17,056			(4,530	)		71,488
Long-term liabilities:
Deferred revenue		33,273			—			—			33,273
Long-term debt, less current maturities		209,530			—			—			209,530
Capital leases and long-term financing obligations, less current maturities		113,237			120,047			(12,101	) b, i		221,183
Other		17,024			8,545			(1,965	) j, k		23,604
Total long-term liabilities		373,064			128,592			(14,066	)		487,590
Commitments and contingencies
Stockholders’ equity:
Preferred Stock, $1.00 par value per share: 1,000,000 shares authorized, no shares issued		—			—			—			—
Common Stock, $0.03 par value per share: 35,000,000 shares authorized, 18,238,847 shares issued and 17,781,617 shares outstanding at September 30, 2012		539			—			—			539
Treasury stock, 457,230 shares at cost at September 30, 2012		(11,740	)		—			—			(11,740	)
Paid-in capital		349,046			67,711			(67,711	) l		349,046
Accumulated deficit		(280,677	)		(111,825	)		111,825	l		(280,677	)
Total stockholders’ equity		57,168			(44,114	)		44,114			57,168
Total liabilities and stockholders’ equity	$	489,194		$	101,534		$	25,518		$	616,246

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

CARMIKE CINEMAS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2011

	Carmike Historical			Rave Historical Restated			Pro Forma Adjustments (Footnote 3)			Carmike Pro Forma Combined
	(In Thousands, Except Per Share Amounts)
Revenues:
Admissions	$	309,782		$	82,500		$	(23,138	) m	$	369,144
Concessions and other		172,427			43,046			(13,310	) m		202,163
Total operating revenues		482,209			125,546			(36,448	)		571,307
Operating costs and expenses:
Film exhibition costs		167,385			45,020			(12,607	) m		199,798
Concession costs		19,895			5,131			(1,533	) m		23,493
Other theatre operating costs		203,012			42,038			(11,806	) m		233,244
General and administrative expenses		19,084			5,227			(5,227	) n		19,084
Severance agreement charges		845			—			—			845
Depreciation and amortization		32,258			10,180			(1,298	) o		41,140
Loss on sale of property and equipment		333			—			—			333
Write-off of note receivable		750			—			—			750
Impairment of long-lived assets		3,489			539			—			4,028
Total operating costs and expenses		447,051			108,135			(32,471	)		522,715
Operating income		35,158			17,411			(3,977	)		48,592
Interest expense		34,113			21,425			(4,935	) q		50,603
Other expense		—			190			—			190
Income (loss) from continuing operations before income tax and income from unconsolidated affiliates		1,045			(4,204	)		958			(2,201	)
Income tax expense (benefit)		10,375			—			(1,282	) r		9,093
Income from unconsolidated affiliates		1,797			—			—			1,797
Loss from continuing operations	$	(7,533	)	$	(4,204	)	$	2,240		$	(9,497	)
Weighted average shares outstanding:
Basic		12,807									12,807
Diluted		12,807									12,807
Net loss per common share (Basic and Diluted):
Net loss per common share	$	(0.59	)							$	(0.74	)

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

CARMIKE CINEMAS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

	Carmike Historical		Rave Historical			Pro Forma Adjustments (Footnote 3)			Carmike Pro Forma Combined
	(In Thousands, Except Per Share Amounts)
Revenues:
Admissions	$	250,423	$	66,423		$	(18,486	) m	$	298,360
Concessions and other		143,888		34,927			(10,381	) m		168,434
Total operating revenues		394,311		101,350			(28,867	)		466,794
Operating costs and expenses:
Film exhibition costs		136,126		36,552			(10,092	) m		162,586
Concession costs		16,863		4,468			(1,299	) m		20,032
Other theatre operating costs		158,465		32,536			(9,050	) m		181,951
General and administrative expenses		15,826		4,129			(5,009	) n, p		14,946
Severance agreement charges		588		—			—			588
Depreciation and amortization		24,028		7,409			(747	) o		30,690
Loss on sale of property and equipment		948		—			—			948
Impairment of long-lived assets		3,371		607			—			3,978
Total operating costs and expenses		356,215		85,701			(26,197	)		415,719
Operating income		38,096		15,649			(2,670	)		51,075
Interest expense		25,478		15,774			(4,861	) q		36,391
Loss on extinguishment of debt		4,961		—			—			4,961
Other expense		—		62			—			62
Income (loss) from continuing operations before income tax		7,657		(187	)		2,191			9,661
Income tax expense		3,822		—			792	r		4,614
Income from unconsolidated affiliates		958		—			—			958
Income (loss) from continuing operations	$	4,793	$	(187	)	$	1,399		$	6,005
Weighted average shares outstanding:
Basic		15,775					—			15,775
Diluted		16,061					—			16,061
Net income per common share (Basic)	$	0.30							$	0.38
Net income per common share (Diluted)	$	0.30							$	0.37

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

CARMIKE CINEMAS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1. Basis of Presentation

The historical financial information is derived from the historical consolidated financial statements of Carmike and the historical consolidated financial statements of Rave. The unaudited pro forma condensed combined balance sheet as of September 30, 2012 has been prepared as if the Acquisition had occurred on September 30, 2012 and combines the historical balance sheet of Carmike as of September 30, 2012 and the historical balance sheet of Rave as of September 27, 2012. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2011 and the nine months ended September 30, 2012 have been prepared as if the Acquisition had occurred on January 1, 2011 and combine the historical results for Carmike, for the year ended December 31, 2011 and for the nine months ended September 30, 2012, and Rave, for the year ended December 29, 2011 and for the nine months ended September 27, 2012.

The unaudited pro forma condensed combined financial information has been prepared by the Company using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. The acquisition accounting is dependent on certain valuation and other studies that have yet to progress to a stage where there is sufficient information for a definitive measurement. The assets and liabilities of Rave have been measured based on preliminary estimates using assumptions that the Company believes are reasonable. Differences between these estimates and the final acquisition accounting could occur, and those differences could have a material impact on the accompanying pro forma condensed combined financial statements. Carmike intends to complete the necessary valuation required to finalize the acquisition accounting as soon as practicable, but in no event later than one year following completion of the Acquisition.

2. Assets Acquired and Liabilities Assumed at Fair Value

The Company prepared the allocation of the fair values of the assets acquired and liabilities assumed in the September 30, 2012 pro forma condensed combined balance sheet based on management’s best estimates of the fair value of assets acquired and liabilities assumed.

The following table summarizes the purchase price and purchase price allocation based on the fair value of net assets acquired (amounts in thousands):

Cash	$	19,000
Leases and financing obligations assumed		110,243
Purchase price		129,243
Working capital adjustment		1,864
Total purchase price	$	131,107
Accounts receivable	$	645
Inventory		490
Other current assets		301
Property and equipment		94,523
Other assets		446
Current liabilities		(10,229	)
Other liabilities		(6,580	)
Net assets acquired		79,596
Goodwill		51,511
Total	$	131,107

For the purpose of these pro forma condensed combined financial statements, the carrying value of all assets acquired, except for property and equipment and goodwill, and all liabilities assumed, approximates fair value.

3. Pro Forma Adjustments

The pro forma financial information does not give effect to any synergies that may be realized as a result of the Acquisition. The unaudited pro forma combined balance sheets and statements of operations reflect the effect of the following pro forma adjustments:

(a) Adjustment to reflect the $20,864, inclusive of preliminary working capital adjustment, paid by the Company in connection with the Acquisition and cash balances totaling $2,583 held by Rave as of the closing date not included in the Acquisition.

(b) Adjustment to reflect the net book value of assets and liabilities associated with the four Rave theatres not acquired.

(c) Adjustment to reflect the note receivable of $348 due from one of Rave’s former officers which was not included in the Acquisition.

(d) Adjustment to increase the net book value of buildings and building improvements and equipment by $26,000 and $800, respectively, to reflect the acquisition date fair value and to reset accumulated depreciation to $0.

(e) Adjustment to reflect the excess of purchase price over the estimated fair value of the net assets acquired.

Total purchase price				$	131,107
Accounts receivable	$	645
Inventory		490
Prepaid and other assets		301
Property and equipment		94,523
Other assets		446
Accounts payable		(3,836	)
Accrued expenses		(6,393	)
Other liabilities		(6,580	)
Net assets acquired				$	79,596
Goodwill				$	51,511

(f) Adjustment to reflect the elimination of deferred financing fees of $359 as a result of fair value accounting.

(g) Adjustment to reflect the elimination of Rave debt of $1,000 that was settled in conjunction with the Acquisition and the elimination of the current portion of accrued straight-line and deferred rent credits of $1,376 as a result of fair value accounting.

(h) Adjustment to reflect the accrual of acquisition-related expenses of $1,200 incurred in connection with and contingent upon the closing of the Acquisition and the elimination of $997 of Rave deferred revenue.

(i) Adjustment to reflect the increase in the fair value of capital leases and long-term financing obligations of $9,536.

(j) Adjustment to reflect the elimination of straight-line and deferred rent credits of $8,545 as a result of fair value accounting.

(k) Adjustment to record the fair value of $6,580 associated with an unfavorable operating lease acquired in the Acquisition.

(l) Adjustment to reflect the elimination of Rave stockholders’ equity.

(m) Adjustment to reflect corporate revenues and expenses associated with the four Rave theatres not acquired.

(n) Adjustment to reflect the elimination of Rave’s corporate general and administrative expenses as the Acquisition only included the assets, employees and operations of the 16 acquired theatres and none of Rave’s corporate assets or management personnel or functions. The Company does not expect to incur any incremental future operating costs of significance to incorporate these theatres into its circuit.

(o) Adjustment to reflect depreciation expense for the adjusted asset base and depreciable lives as determined per the fair value assessment. Depreciable lives range from three to twenty years.

(p) Adjustment to reflect the elimination of $880 of acquisition-related expenses incurred by Carmike during the nine months ended September 30, 2012. The Company has removed these expenses from the unaudited pro forma combined condensed statement of income for the nine months ended September 30, 2012 on the basis that they are non-recurring. No adjustment was made for the twelve months ended December 31, 2011 as there were no such costs incurred prior to January 1, 2012.

(q) Adjustment to reflect the elimination of interest expense of $424 and $240 for the year ended December 31, 2011 and nine months ended September 30, respectively, related to Rave debt settled in conjunction with the Acquisition. Also, the adjustment to reflect the reduction of interest expense of $4,511 and $4,621 for the year ended December 31, 2011 and nine months ended September 30, 2012, respectively, as a result of fair value accounting for assumed capital leases and financing obligations.

(r) Adjustment to reflect the tax (benefit) expense that would have been incurred with respect to the Rave theatres. Pro forma tax expense was calculated using a rate of 39.5%. We do not expect a significant difference between pre-tax book income and taxable income. Furthermore, the acquisition of Rave would not have caused us to conclude that a full valuation allowance upon our deferred tax assets was no longer required.

EX-99.2

Exhibit 99.2

RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Restated Consolidated Financial Statements

December 29, 2011, December 30, 2010, and December 31, 2009

MONTGOMERY COSCIA GREILICH LLP

Certified Public Accountants

2500 Dallas Parkway, Suite 300

Plano, Texas 75093

972.748.0300 p

972.748.0700 f

Thomas A. Montgomery, CPA	Rene E. Balli, CPA
Matthew R. Coscia, CPA	Erica D. Rogers, CPA
Paul E. Greilich, CPA	Dustin W. Shaffer, CPA
Jeanette A. Musacchio	Gary W. Boyd, CPA
James M. Lyngholm	Michal L. Gayler, CPA
Christopher C. Johnson, CPA	Gregory S. Norkiewicz, CPA
J. Brian Simpson, CPA	Karen R. Soefje, CPA

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Managers

Rave Reviews Cinemas, L.L.C.

We have audited the accompanying consolidated balance sheets of Rave Reviews Cinemas, L.L.C. and subsidiaries (the “Company”) as of December 29, 2011 (Restated) and December 30, 2010 (Restated), and the related statements of operations, and members’ deficit, and cash flows for the fiscal years ended December 29, 2011 (Restated), December 30, 2010 (Restated), and December 31, 2009 (Restated). These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America as established by the American Institute of Certified Public Accountants. 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Rave Reviews Cinemas, L.L.C. as of December 29, 2011 (Restated), December 30, 2010 (Restated) and the results of its operations and its cash flows for the fiscal years ended December 29, 2011 (Restated), December 30, 2010 (Restated) and December 31, 2009 (Restated) in conformity with accounting principles generally accepted in the United States of America.

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MONTGOMERY COSCIA GREILICH LLP

Certified Public Accountants

As described in Note 2 to the consolidated financial statements, the accompanying consolidated financial statements of Rave Reviews Cinemas, LLC and its subsidiaries as of December 29, 2011, December 30, 2010, and December 31, 2009 have been restated. We therefore withdraw our previous reports dated April 25, 2012, April 15, 2011 and April 15, 2010 on those consolidated financial statements, as originally issued.

Montgomery Coscia Greilich LLP

Plano, Texas

September 27, 2012

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Consolidated Balance Sheets

(dollars in thousands)

	December 29, 2011 (Restated)			December 30, 2010 (Restated)
Assets
Current assets
Cash and cash equivalents	$	4,129		$	4,996
Accounts receivable		1,335			1,690
Inventories		643			429
Related party receivable		341			—
Prepaids and other current assets		1,712			1,355
Total current assets		8,160			8,470
Property and equipment
Furniture and equipment		47,751			46,472
Buildings and leasehold improvements		127,858			127,416
Land		5,735			5,735
		181,344			179,623
Less: Accumulated depreciation and amortization		(78,608	)		(68,459	)
Property and equipment, net		102,736			111,164
Other long-term assets		1,018			990
Related party receivable		—			332
Total assets	$	111,914		$	120,956
Liabilities and Members’ Deficit
Current liabilities
Accounts payable	$	8,957		$	10,695
Accrued expenses		6,568			6,326
Deferred revenue		2,880			3,171
Senior credit facility		2,000			1,500
Current portion of long-term lease liabilities		2,966			2,360
Current portion of accrued straight-line rent and deferred rent credits		1,375			1,376
Total current liabilities		24,746			25,428
Long-term lease liabilities		121,675			124,640
Accrued straight-line rent and deferred rent credits		9,420			10,611
Total liabilities		155,841			160,679
Commitments and contingencies (note 8)
Members’ deficit
Paid-in capital, net		67,711			67,711
Accumulated deficit		(111,638	)		(107,434	)
Total members’ deficit		(43,927	)		(39,723	)
Total liabilities and members’ deficit	$	111,914		$	120,956

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

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Consolidated Statements of Operations and Members’ Deficit

(dollars in thousands)

	December 29, 2011 (Restated)			December 30, 2010 (Restated)			December 31, 2009 (Restated)
Revenue
Admissions	$	82,500		$	85,257		$	91,931
Concessions		38,562			38,362			41,598
Other		4,484			3,726			6,276
Total revenue		125,546			127,345			139,805
Costs and expenses
Film rental		45,020			46,369			49,845
Concession cost of sales		5,131			5,494			6,007
Theater operating expenses		42,038			41,507			42,495
General and administrative expenses		5,227			5,762			8,627
Depreciation and amortization		10,180			10,350			11,210
Fixed asset impairment		539			865			111
Total costs and expenses		108,135			110,347			118,295
Operating income		17,411			16,998			21,510
Interest expense
Cash interest		(21,219	)		(22,151	)		(28,265	)
Deferred financing cost amortization		(206	)		(396	)		(461	)
Write-off of deferred debt cost		—			—			(1,283	)
Other income/(expense)		(190	)		14,214			126
Net income/(loss) before discontinued operations		(4,204	)		8,665			(8,373	)
Discontinued operations, including loss on disposal of $493 in 2010 and gain on disposal of $45,509 in 2009		—			(1,393	)		49,169
Net income/(loss)	$	(4,204	)	$	7,272		$	40,796
Paid-in capital, beginning of year	$	67,711		$	67,996		$	67,996
Members’ redemptions, net		—			(285	)		—
Paid-in capital		67,711			67,711			67,996
Accumulated deficit, beginning of year		(107,436	)		(114,634	)		(155,430	)
Net income/(loss)		(4,204	)		7,272			40,796
Members’ redemptions in excess of contributed capital		—			(74	)		—
Accumulated deficit, end of year		(111,640	)		(107,436	)		(114,634	)
Members’ deficit, end of year	$	(43,929	)	$	(39,725	)	$	(46,638	)

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

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Consolidated Statements of Cash Flows

(dollars in thousands)

	December  29, 2011 (Restated)			December  30, 2010 (Restated)			December  31, 2009 (Restated)
Cash flows from operating activities
Net income/(loss)	$	(4,204	)	$	7,272		$	40,796
Adjustments to reconcile net income(loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		10,180			11,037			15,064
Fixed asset impairment		539			865			111
Deferred rent credit amortization		(1,221	)		(1,220	)		(1,890	)
Accrued straight-line rent amortization		29			95			435
Amortization of deferred financing costs		568			448			1,744
Loss(gain) on sale of theater assets		—			493			(45,509	)
Loss(gain) on lease amendment		—			(14,557	)		(151	)
Changes in assets and liabilities:
Accounts receivable		355			969			955
Inventories		(214	)		265			224
Prepaids and other current assets		(784	)		562			(3,141	)
Accounts payable		(1,738	)		(1,017	)		(273	)
Accrued expenses		242			(2,845	)		3,197
Deferred revenue		(291	)		(1,400	)		2,626
Other long-term liabilities		—			(915	)		177
Net cash provided by operating activities		3,461			52			14,365
Cash flows from investing activities
Purchase of furniture and equipment		(2,260	)		(3,179	)		(1,012	)
Proceeds from sale of theater assets		—			—			48,779
Loan to related party		(9	)		(18	)		(57	)
Net cash provided by/(used in) investing activities		(2,269	)		(3,197	)		47,710
Cash flows from financing activities
Financing costs		(200	)		(201	)		(992	)
Repayments of long-term lease liability		(2,359	)		(1,439	)		180
Repayments under senior credit agreements		(9,000	)		(11,500	)		(58,293	)
Borrowings under senior credit agreements		9,500			13,000			2,563
Net cash used in financing activities		(2,059	)		(140	)		(56,542	)
Net increase/(decrease) in cash and cash equivalents		(867	)		(3,285	)		5,533
Cash and cash equivalents, beginning of year		4,996			8,281			2,748
Cash and cash equivalents, end of year	$	4,129		$	4,996		$	8,281
Supplemental disclosure of cash flow information:
Cash paid for interest	$	21,148		$	23,056		$	28,325
Non-cash financing transactions:
Repurchase of members’ units	$	—		$	359		$	—

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

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Notes to Restated Consolidated Financial Statements

Fiscal Years Ended December 29, 2011, December 30, 2010 and December 31, 2009

(dollars in thousands)

(1) Organization and Summary of Significant Accounting Policies

As of December 29, 2011, Rave Reviews Cinemas, L.L.C., a Delaware limited liability company, currently operates 21 stadium-seated megaplex theaters with a total of 326 screens through its wholly owned subsidiaries, comprised primarily of its theater assets (collectively, the Company) located in Alabama (7), Florida (5), Indiana (2), Louisiana (2), Illinois, Michigan, Pennsylvania, Tennessee, and Texas.

(a) Fiscal Year

The Company has adopted a 52/53-week fiscal year ending on the last Thursday in December. Fiscal years 2011, 2010 and 2009 were comprised of 52, 52 and 53 weeks, respectively.

(b) Principles of Consolidation

The restated consolidated financial statements of the Company include the accounts of Rave and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

(c) Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. Significant estimates include the theater level valuation analyses that were used to assess the recoverability of the related assets.

(d) Cash and cash equivalents

For purposes of the restated consolidated statements of cash flows, the Company considers all demand deposits, money market accounts and highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

For cash management purposes, the Company concentrates its cash holdings in a limited number of accounts. At times, the balances in these accounts may exceed the federally insured limit.

(e) Revenue Recognition and Film Rental Costs

Revenues are generated when admissions and concessions occur. Other operating revenues consist primarily of product advertising (including vendor marketing programs), and other ancillary revenues which are recognized as income in the period earned. Proceeds received from advance ticket sales and gift certificates are recorded as deferred revenue. The Company recognizes revenue associated with gift certificates and advanced ticket sales at such time as the items are redeemed. Film rental costs are recorded based on the applicable admission sales pursuant to the terms of the film licenses.

(f) Income Taxes

Rave is a limited liability company; therefore, income taxes accrue to the individual holders of the membership units. As such no provision or credit for federal income taxes has been recorded in the accompanying restated consolidated statement of operations and members’ deficit. The Company is subject to state income taxes as applicable.

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Notes to Restated Consolidated Financial Statements (Continued)

(1) Organization and Summary of Significant Accounting Policies, continued

(g) Fair Values of Financial Instruments

Fair values of financial instruments are estimated using available market information and other valuation methods, including using a discounted cash flow approach based on the interest rates currently available for similar debt. The fair value of financial instruments (including cash and cash equivalents, account receivable, accounts payable, accrued expenses, and variable rate long-term debt) is estimated to approximate the related recorded values as of December 29, 2011, December 30, 2010 and December 31, 2009.

(h) Inventories

Concession inventories are stated at the lower of cost (first-in, first-out method) or market.

(i) Property and Equipment

Property and equipment are stated at cost. The Company uses the straight-line method in computing depreciation for financial reporting purposes. Leasehold improvements are amortized over the shorter of the initial lease term or the estimated useful life. The estimated useful lives of the property and equipment range as follows:

Furniture and equipment	3 to 10 years
Buildings and leasehold improvements	5 to 20 years

Expenditures for additions, major renewals, and betterments are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation and amortization was $10,180, $10,350 and $11,210 for the fiscal years 2011, 2010 and 2009, respectively.

As of December 29, 2011, included in property and equipment is $91,217 of assets accounted for under capital leases, net of accumulated depreciation of $62,778. As of December 30, 2010, included in property and equipment is $98,378 of assets accounted for under capital leases, net of accumulated depreciation of $54,479.

(j) Other Long-Term Assets

Other long-term assets include deferred financing costs incurred in connection with the completion of certain financing transactions related to the long-term lease liabilities and the senior credit facility and are amortized over the term of the related financing using the effective interest method. Deferred financing costs, net of accumulated amortization of $9, were $191 at December 29, 2011. For the fiscal year ended December 29, 2011, amortization expense of $205 and $363 is included in depreciation and amortization expense and interest expense, respectively. Deferred financing costs, net of accumulated amortization of $403, were $189 at December 30, 2010. For the fiscal year ended December 30, 2010, amortization expense of $43 and $395 is included in depreciation and amortization expense and interest expense, respectively. Deferred Financing costs, net of accumulated amortization of $8, were $397 at December 31, 2009. For the fiscal year ended December 31, 2009, amortization expense of $43 and $461 is included in depreciation and amortization and in interest expense, respectively, in the accompanying restated consolidated statement of operations and members’ deficit.

(k) Theater Pre-Opening Operating Costs

Costs incurred prior to the opening of a new theater (including advertising and payroll) are expensed as incurred. No theaters were opened during the fiscal years ended December 29, 2011, December 30, 2010 and December 31, 2009.

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Notes to Restated Consolidated Financial Statements (Continued)

(1) Organization and Summary of Significant Accounting Policies, continued

(l) Impairment of Long-Lived Assets

Management reviews long-lived assets for impairment on an annual basis in connection with its budgeting process and whenever events or circumstances indicate that the carrying amount of the assets may not be fully realizable. This includes periodic reviews of internal management reports and monitoring current and potential future competition in its markets for indicators of changes in events or circumstances that indicate impairment of individual theater assets. Theaters are evaluated for impairment on an individual basis, which management believes is the lowest level for which there are identifiable cash flows. Theaters are evaluated using historical and projected data of theater level cash flow as the primary indicator of potential impairment. If the estimated fair value computed using future theater cash flow is less than the carrying amount of the asset, an impairment loss is recognized for the amount by which the carrying value of the asset exceeds its estimated fair value. For fiscal years ended December 29, 2011, December 30, 2010 and December 31, 2009 impairment losses of $539, $865, and $111, respectively, were recognized for long-lived assets recorded in the restatement.

(m) Deferred Revenue

Deferred revenue relates primarily to vendor programs, gift certificates and advance ticket sales, and is recognized as revenue as described in note 1(e) Revenue Recognition and Film Rental Costs.

(n) Accrued Straight-Line Rent and Deferred Rent Credits

Most of the Company’s operating leases contain rent escalations at various periods during the applicable lease term. The Company recognizes rental expense for minimum lease payments for these leases on a straight-line basis over the base term of the lease. Accrued straight-line rent totaling $3,135 and $3,106 is included in accrued straight-line rent and deferred rent credits in the accompanying restated consolidated balance sheets as of December 29, 2011 and December 30, 2010, respectively. For both the fiscal years ended December 29, 2011 and December 30, 2010, rent credits of $1,221 were recorded against theater operating expenses. For the fiscal year ended December 31, 2009, rent credits of $1,888 were recorded against operating expenses. For fiscal years ended December 29, 2011, December 30, 2010 and December 31, 2009, straight line rent expense of $29, $94 and $434, respectively, were recorded against theater operating expenses.

The Company conducts the majority of its business in leased properties whereby it constructs its theaters on leased land and receives reimbursement, in the form of an allowance, from the landlord for some portion of the cost of the building including interest. During the construction period, Rave is considered the accounting owner of the theater because of its unlimited obligation to cover costs exceeding the landlord’s allowance. The construction cost of the theater consists of both structural elements and normal tenant improvements. Amounts received from the lessor in the form of tenant allowances is reflected as financing from the landlord for the structural elements and normal tenant improvements during the construction period.

Upon completion of the structural elements, determined by the Company to be one month prior to the store opening, a deemed sale-leaseback of the structural elements is effectuated. Those amounts received from the landlord in the form of tenant allowances for the structural elements are treated as sale proceeds. Since the Company has no prohibited form of continuing involvement as described in FASB Accounting Standards Codification (“ASC”) 976 Real Estate – Retail Land, and ASC 840 Leases, the amounts received from the landlord in respect of the structural elements are removed from the Company’s books. No gain or loss is recorded upon de-recognition of the asset and the related liability.

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Notes to Restated Consolidated Financial Statements (Continued)

(1) Organization and Summary of Significant Accounting Policies, continued

(n) Accrued Straight-Line Rent and Deferred Rent Credits, continued

Upon the derecognition of the structural elements, the Company evaluates the terms of the leaseback to determine if the lease should be classified as an operating or capital lease under the provisions of ASC 840 Leases.

Any allowances from the landlord used for normal (i.e., nonstructural) tenant improvements and/or furniture, fixtures and equipment are reflected as property and equipment with a corresponding credit to deferred rent credits on the accompanying restated consolidated balance sheets. Amounts recorded to normal tenant improvements and/or furniture, fixtures and equipment are depreciated in accordance with the Company’s depreciation policies, while the corresponding amount credited as deferred rent is amortized as a credit to rent expense over the initial lease term in the accompanying restated consolidated statement of operations and members’ deficit. As of December 29, 2011 and December 30, 2010, net long-term deferred rent credits totaling $7,659 and $8,880, respectively, are included in accrued straight-line rent and deferred rent credits in the restated consolidated balance sheets.

(o) Advertising Costs

Advertising costs are expensed as incurred. Advertising costs were $804, $581 and $1,016 for the fiscal years ended December 29, 2011, December 30, 2010 and December 31, 2009, respectively, and are included in the theater operating expenses in the restated consolidated statement of operations.

(p) Discontinued Operations

For purposes of determining discontinued operations, the Company has determined that the theater level is a component of the entity within the context of ASC 360, Property, Plant and Equipment. A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the Company. The Company routinely monitors the results of operations of its theaters to determine whether it’s advantageous to close or sell a theater. The Company evaluates the results of operations of these closed or sold theaters both qualitatively and quantitatively to determine if it is appropriate for reporting as discontinued operations.

On December 18, 2009, the Company sold the assets of its Little Rock, Columbus, Fort Worth and Fort Worth II subsidiaries for $48,779 in cash resulting in a gain on sale of $45,509, net of transaction expenses of $1,854. On December 10, 2010, the Company sold the assets of its Hickory Creek subsidiary (as part of the 2009 asset sale) resulting in a loss on sale of $493. The Company had no discontinued operations during the year ended December 29, 2011.

(2) Restatement of Previously Issued Consolidated Financial Statements

Following a review of the Company’s lease accounting practices in 2012, the Company corrected its method of accounting for certain theater leases where the Company was considered the owner during the construction period. The correction led to a review of the long-lived assets for impairment and resulted in the Company impairing the assets of six theaters as part of the restatement (see Note 1(l)). To reflect the corrections, the Company restated its consolidated financial statements beginning in fiscal 2008.

Historically, when accounting for certain leases where the Company was considered the owner during the construction period, the Company recorded the lease using sale-leaseback accounting after the construction

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Notes to Restated Consolidated Financial Statements (Continued)

(2) Restatement of Previously Issued Consolidated Financial Statements, continued

was completed. During review the Company determined it had continuing involvement related to the renewal options at a fixed rental rate. This form of continuing involvement precluded sale-leaseback accounting. The Company revised its accounting to capitalize certain theater leases previously recorded as operating leases.

When evaluating the lease term, the Company had previously considered the base lease term only for those leases with a fixed rental rate. For the leases with renewal options at a fixed rental rate, the Company revised the lease analysis to include the extended lease term.

The correction of changing the accounting of certain leases to capital leases required the Company to consider impairment of the theater assets, including the capitalized leases. The review followed the processes described in Note 1(l) Impairment of Long-Lived Assets, and resulted in impairment losses of long-lived assets at six theaters.

The consolidated balance sheets as of December 29, 2011 and December 30, 2010, and the related consolidated statements of operations and members’ equity/(deficit) and cash flows for the fiscal years ended December 29, 2011, December 30, 2010 and December 31, 2009 have been restated for the identified corrections. The effects of the restatements are as follows:

	As of and for the Year Ended December 29, 2011
	As  Previously Reported			Adjustments			As Restated
Consolidated Balance Sheet
Property and equipment, net	$	121,875		$	(19,139	)	$	102,736
Total assets		131,053			(19,139	)		111,914
Current portion of long-term lease liabilities		158			2,808			2,966
Current portion of accrued straight-line rent and deferred rent credits		5,016			(3,641	)		1,375
Total current liabilities		25,579			(833	)		24,746
Long-term lease liabilities		24,960			96,715			121,675
Accrued straight-line rent and deferred rent credits		62,613			(53,193	)		9,420
Total liabilities		113,152			42,689			155,841
Accumulated deficit		(49,810	)		(61,828	)		(111,638	)
Total members’ equity		17,901			(61,828	)		(43,927	)
Consolidated Statement of Operations
Theater operating expenses	$	58,737		$	(16,699	)	$	42,038
Depreciation and amortization		12,555			(2,375	)		10,180
Fixed asset impairment		—			539			539
Operating income/(loss)		(1,124	)		18,535			17,411
Cash interest expense		(3,922	)		(17,297	)		(21,219	)
Net loss		(5,442	)		1,238			(4,204	)

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Notes to Restated Consolidated Financial Statements (Continued)

(2) Restatement of Previously Issued Consolidated Financial Statements, continued

	As of and for the Year Ended December 30, 2010
	As  Previously Reported			Adjustments			As Restated
Consolidated Balance Sheet
Property and equipment, net	$	132,139		$	(20,975	)	$	111,164
Total assets		141,931			(20,975	)		120,956
Current portion of long-term lease liabilities		141			2,219			2,360
Current portion of accrued straight-line rent and deferred rent credits		5,175			(3,799	)		1,376
Total current liabilities		27,008			(1,580	)		25,428
Long-term lease liabilities		25,117			99,523			124,640
Accrued straight-line rent and deferred rent credits		66,463			(55,852	)		10,611
Total liabilities		118,588			42,091			160,679
Accumulated deficit		(44,368	)		(63,066	)		(107,434	)
Total members’ equity		23,343			(63,066	)		(39,723	)
Consolidated Statement of Operations
Theater operating expenses	$	58,431		$	(16,924	)	$	41,507
Depreciation and amortization		12,816			(2,466	)		10,350
Fixed asset impairment		—			865			865
Operating income/(loss)		(1,527	)		18,525			16,998
Cash interest expense		(4,915	)		(17,236	)		(22,151	)
Other income/(expense)		(343	)		14,557			14,214
Net income/(loss) before discontinued operations		(7,181	)		15,846			8,665
Discontinued operations		(489	)		(904	)		(1,393	)
Net income/(loss)		(7,670	)		14,942			7,272

	As of and for the Year Ended December 31, 2009
	As Previously Reported			Adjustments			As Restated
Consolidated Statement of Operations
Theater operating expenses	$	60,936		$	(18,441	)	$	42,495
Depreciation and amortization		13,753			(2,543	)		11,210
Fixed asset impairment		—			111			111
Operating income		637			20,873			21,510
Cash interest expense		(9,245	)		(19,020	)		(28,265	)
Other income/(expense)		(25	)		151			126
Net loss before discontinued operations		(10,377	)		2,004			(8,373	)
Discontinued operations		47,773			1,396			49,169
Net income		37,396			3,400			40,796

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Notes to Restated Consolidated Financial Statements (Continued)

(3) Related Party Receivable

The Company has a $341 and $332 note receivable due from one of its former officers at December 29, 2011 and December 30, 2010, respectively. The former officer’s interest in Company stock is pledged as a security interest for the note. The note receivable accrues interest. Interest accumulated during the fiscal years ended December 29, 2011 and December 30, 2010 was $9 and $18, respectively. In April 2010, the Company entered into an amended note with the former officer where the former officer redeemed 285 Class A member units valued at $359, which was applied against the note receivable, and the due date was extended to March 31, 2015. In fiscal year 2011, the note receivable was in default due to a failure to pay scheduled principal payments and the note receivable is due and payable on demand and therefore classified as current.

(4) Lease Liabilities

The Company leases seventeen of its theaters from unrelated parties under the terms of sale leaseback agreements accounted for as financing arrangements. Under the agreements, Rave has recorded these amounts as lease liabilities and has retained the related property and equipment in the accompanying restated consolidated balance sheets. The principal is amortized over the initial lease term of 20 years to reduce the net amount borrowed to equal the estimated net book value of the related theater assets at the end of the initial lease term. Upon expiration of the leases, the lessors retain title to the buildings, leasehold improvements, certain equipment and, as applicable, land; therefore, no lump sum cash payments are expected at the end of the lease terms.

During fiscal year 2010, the Company amended the capital leases of its Kalamazoo, Lee Branch, Daphne, and Vestavia Hills subsidiaries. The terms of these amendments resulted in a gain on extinguishment of capital lease liabilities of $14,557, which is included in other income/(expense) on the restated consolidated statement of operations and members’ deficit.

For the fiscal years ended December 29, 2011, December 30, 2010 and December 31, 2009, a total of $21,001, $21,811 and $23,531, respectively, were charged to interest expense in the accompanying restated consolidated statements of operations and members’ deficit for these financing transactions.

Future minimum annual payments of principal and interest for the seventeen financing transactions as of December 29, 2011 are as follows:

	Principal		Interest		Total
Fiscal year:
2012	$	2,966	$	19,774	$	22,740
2013		1,627		19,411		21,038
2014		2,131		19,115		21,246
2015		2,990		18,695		21,685
2016		3,678		18,153		21,831
Thereafter		111,249		96,035		207,284
	$	124,641	$	191,183	$	315,824

12

RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Notes to Restated Consolidated Financial Statements (Continued)

(5) Senior Credit Facility

On December 20, 2006, the Company entered into a credit agreement with General Electric Credit Capital Corporation, as agent (the “Credit Agreement”).

The Credit Agreement includes the following:

• Loan Commitments – The Credit Agreement initially was comprised of a $35 million revolving loan commitment, a $30 million term commitment, and a $5 million liquidity loan commitment. The commitments may be permanently reduced if certain events occur (as defined in the Credit Agreement) or at the Company’s option. The Company permanently reduced the commitment in 2007 by $3 million and in 2009 by $55 million. On December 8, 2010 the credit agreement was amended to extend the termination date to December 17, 2011 and reduce the commitment by $2 million. On December 13, 2011 a second amendment was signed to extend the termination date to December 17, 2012, reduce the commitment by $4 million to a $6 million revolving loan.

• Commitment and Ticking Fees – The Company is required to pay a 1% per annum fee on the average unused amount of the Credit Agreement.

• Guarantee, Collateral, and Financial Covenants – The Company’s obligations under the Credit Agreement are guaranteed by all of its subsidiaries. Such guarantees are secured by a pledge by Rave of all of the capital stock of the subsidiaries as well as a security interest in substantially all of the subsidiaries’ assets.

In addition to the above guarantees and security interests, the Credit Agreement also contains certain covenants that, among others, restrict incurring additional indebtedness, liens on property, merger or consolidation, capital expenditures, investments and transactions in the capital accounts of Rave and its subsidiaries.

Amounts borrowed under the Credit Agreement bear interest at rates based upon an Index Rate (as defined in the Credit Agreement) plus an applicable margin rate predicated upon meeting certain covenant ratios. The average effective interest rate under the Credit Agreements during the fiscal years ended December 29, 2011, December 30, 2010, and December 31, 2009 was 5.25%, 6.20%, and 8.0% respectively. The balance of the Credit Agreement at December 29, 2011 and December 30, 2010 was $2,000 and $1,500, respectively and borrowing availability at December 29, 2011 and December 30, 2010 was $4,000, and $8,500, respectively.

13

RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Notes to Restated Consolidated Financial Statements (Continued)

(6) Operating Leases

The Company leases theaters under non-cancelable operating leases with initial lease terms of 10 to 20 years. In addition to the minimum annual lease payment, the leases require the payment of taxes, insurance, and other costs applicable to the property. Certain leases also provide for contingent rentals based on operating results and include renewal options for additional periods up to 20 years. Rent expense for the fiscal year 2011 totaled $6,750 (net of deferred rent credit amortization of $1,221) and is included in theater operating expenses. Rent expense for the fiscal year 2010 totaled $7,624 (net of deferred rent credit amortization of $1,221) and is included in theater operating expenses. Rent expense for the fiscal year 2009 totaled $11,651 (net of deferred rent credit amortization of $1,888) and is included in theater operating expenses. For fiscal year 2009, contingent rentals totaled $226. There were no contingent rentals in fiscal years 2010 and 2011.

Future minimum payments under operating leases as of December 29, 2011 are as follows:

Fiscal Year
2012	$	5,606
2013		5,685
2014		5,711
2015		5,748
2016		6,078
Thereafter		28,846
Total	$	57,674

(7) Members’ Deficit

Members’ deficit is comprised of seven classes of units – Class A, A-1, B, B-1, B-2, C, and D Units. The A Units and A-1 Units, issued for $1 per unit, and majority owned by Boston Ventures Limited Partnerships V and VI, have all of the voting rights, including the ability to elect the board of managers, and certain preferences over other classes of units as it relates to return of invested capital, among others. B Units, issued to members of the Company’s senior management at the date of issuance, have preference over A, C, and D units as it relates to distributions of cash or property after certain levels of investment returns have been achieved by Boston Ventures Limited Partnership V. The B Units and B-1 Units are subject to forfeiture under certain circumstances. Certain nonvoting A Units, and C and D Units issued to unrelated parties in connection with the Company’s initial capitalization and subsequent financings are also eligible to participate in distributions of cash or property once Boston Ventures Limited Partnership V has achieved a certain level of return on its investment. The B, B-1, B-2, C, and D units were issued for $0 per unit. No value was assigned to the B, C, and D Units upon issuance in the accompanying restated consolidated balance sheet since the Company was unable to estimate the probability of achieving the investment returns of Boston Ventures Limited Partnership V. Management continually evaluates the likelihood of Boston Ventures Limited Partnership V achieving the above noted investment returns and continues to be unable to estimate the related probability at December 29, 2011.

14

RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Notes to Restated Consolidated Financial Statements (Continued)

(7) Members’ Deficit, continued

The units issued and outstanding consist of the following:

Class	December 29, 2011		December 30, 2010		December 31, 2009
A		52,138		52,138		52,145
A-1		21,426		21,426		20,500
B		8,800		8,800		8,800
B-1		10,000		10,000		10,000
B-2		12		12		—
C		100		100		100
D		100		100		100
Total		92,576		92,576		91,645

(8) Commitments and Contingencies

The Company is involved in various legal actions arising in the ordinary course of business. In the opinion of management, the ultimate liability, if any, resulting from such legal actions will not have a material adverse effect on the Company’s restated consolidated financial position or results of operations.

(9) Subsequent Events

Management has evaluated subsequent events through September 27, 2012, which is the date the restated consolidated financial statements were available to be issued. As of September 27, 2012, no significant events require recognition or disclosure.

15

EX-99.3

Exhibit 99.3

RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Restated Consolidated Financial Statements

and Related Independent Accountant’s Review Report

For the 39-Weeks Ended September 27, 2012 and September 29, 2011

MONTGOMERY COSCIA GREILICH LLP

Certified Public Accountants

2500 Dallas Parkway, Suite 300

Plano, Texas 75093

972.748.0300 p

972.748.0700 f

Thomas A. Montgomery, CPA	Rene E. Balli, CPA
Matthew R. Coscia, CPA	Erica D. Rogers, CPA
Paul E. Greilich, CPA	Dustin W. Shaffer, CPA
Jeanette A. Musacchio	Gary W. Boyd, CPA
James M. Lyngholm	Michal L. Gayler, CPA
Christopher C. Johnson, CPA	Gregory S. Norkiewicz, CPA
J. Brian Simpson, CPA	Karen R. Soefje, CPA

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Managers

Rave Reviews Cinemas, L.L.C.

We have reviewed the accompanying consolidated balance sheets of Rave Reviews Cinemas, L.L.C. (the “Company” or “Rave”) as of September 27, 2012 and September 29, 2011 and the related statements of operations and members’ deficit and cash flows for the periods then ended. A review includes primarily applying analytical procedures to management’s financial data and making inquiries of Company management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion.

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements.

Our responsibility is to conduct the review in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. We believe that the results of our procedures provide a reasonable basis for our report.

Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America.

Montgomery Coscia Greilich LLP

Plano, Texas

December 13, 2012

1

RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Consolidated Balance Sheets

(dollars in thousands)

	September 27, 2012			September 29, 2011 (Restated)
Assets
Current assets
Cash and cash equivalents	$	2,583		$	3,160
Accounts receivable		813			351
Inventories		637			504
Related party receivable		348			338
Prepaids and other current assets		366			2,907
Total current assets		4,747			7,260
Property and equipment
Furniture and equipment		49,669			48,815
Buildings and leasehold improvements		126,534			126,024
Land		5,735			5,735
		181,938			180,574
Less: Accumulated depreciation and amortization		(85,995	)		(76,056	)
Property and equipment, net		95,943			104,518
Other long-term assets		844			729
Total assets	$	101,534		$	112,507
Liabilities and Members’ Deficit
Current liabilities
Accounts payable	$	4,797		$	7,708
Accrued expenses		4,887			5,643
Deferred revenue		2,699			2,968
Senior credit facility		1,000			1,000
Current portion of long-term lease liabilities		2,297			2,815
Current portion of accrued straight-line rent and deferred rent credits		1,376			1,375
Total current liabilities		17,056			21,509
Long-term lease liabilities		120,047			122,549
Accrued straight-line rent and deferred rent credits		8,545			9,712
Total liabilities		145,648			153,770
Commitments and contingencies (Note 6)
Members’ deficit
Paid-in capital, net		67,711			67,711
Accumulated deficit		(111,825	)		(108,974	)
Total members’ deficit		(44,114	)		(41,263	)
Total liabilities and members’ deficit	$	101,534		$	112,507

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

2

RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Consolidated Statements of Operations and Members’ Deficit

(dollars in thousands)

	September 27, 2012			September 29, 2011 (Restated)
Revenue
Admissions	$	66,423		$	64,562
Concessions		32,317			29,931
Other		2,610			3,601
Total revenue		101,350			98,094
Costs and expenses
Film rental		36,552			35,305
Concession cost of sales		4,468			4,155
Theater operating expenses		32,536			31,810
General and administrative expenses		4,129			4,136
Depreciation and amortization		7,409			7,620
Fixed asset impairment		607			419
Total costs and expenses		85,701			83,445
Operating income		15,649			14,649
Interest expense
Cash interest		(15,626	)		(15,885	)
Deferred financing cost amortization		(148	)		(153	)
Other expense		(62	)		(149	)
Net loss	$	(187	)	$	(1,538	)
Paid-in capital, beginning of year	$	67,711		$	67,711
Members’ redemptions, net		—			—
Paid-in capital		67,711			67,711
Accumulated deficit, beginning of year		(111,638	)		(107,436	)
Net loss		(187	)		(1,538	)
Accumulated deficit, end of period		(111,825	)		(108,974	)
Members’ deficit, end of period	$	(44,114	)	$	(41,263	)

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

3

RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(dollars in thousands)

	September 27, 2012			September 29, 2011 (Restated)
Cash flows from operating activities
Net loss	$	(187	)	$	(1,538	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		7,368			7,620
Fixed asset impairment		589			419
Deferred rent credit amortization		(1,443	)		(1,730	)
Accrued straight-line rent amortization		569			828
Amortization of deferred financing costs		124			150
Changes in assets and liabilities:
Accounts receivable		515			1,001
Inventories		6			(74	)
Prepaids and other current assets		1,396			(1,122	)
Accounts payable		(4,160	)		(2,987	)
Accrued expenses		(1,681	)		(686	)
Deferred revenue		(181	)		(203	)
Net cash provided by operating activities		2,915			1,678
Cash flows from investing activities
Purchase of furniture and equipment		(1,164	)		(1,370	)
Loan to related party		—			(8	)
Net cash used in investing activities		(1,164	)		(1,378	)
Cash flows from financing activities
Repayments of long-term lease liability		(2,297	)		(1,636	)
Repayments under senior credit agreements		(12,000	)		(6,500	)
Borrowings under senior credit agreements		11,000			6,000
Net cash used in financing activities		(3,297	)		(2,136	)
Net decrease in cash and cash equivalents		(1,546	)		(1,836	)
Cash and cash equivalents, beginning of year		4,129			4,996
Cash and cash equivalents, end of period	$	2,583		$	3,160
Supplemental disclosure of cash flow information:
Cash paid for interest	$	15,644			15,893

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

4

RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Notes to Restated Consolidated Financial Statements

(dollars in thousands)

(1) Organization and Summary of Significant Accounting Policies

As of September 27, 2012, Rave Reviews Cinemas, L.L.C., a Delaware limited liability company, currently operates 21 stadium-seated megaplex theaters with a total of 326 screens through its wholly owned subsidiaries, comprised primarily of its theater assets (collectively, the “Company” or “Rave”) located in Alabama (7), Florida (5), Indiana (2), Louisiana (2), Illinois, Michigan, Pennsylvania, Tennessee, and Texas.

(a) Fiscal Quarters

The nine month periods ended September 27, 2012 and September 29, 2011 were comprised of 39 weeks each.

(b) Principles of Consolidation

The restated consolidated financial statements of the Company include the accounts of Rave and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

(c) Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. Significant estimates include the theater level valuation analyses that were used to assess the recoverability of the related assets.

(d) Cash and cash equivalents

For purposes of the restated consolidated statements of cash flows, the Company considers all demand deposits, money market accounts and highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

For cash management purposes, the Company concentrates its cash holdings in a limited number of accounts. At times, the balances in these accounts may exceed the federally insured limit.

(e) Revenue Recognition and Film Rental Costs

Revenues are generated when admissions and concessions occur. Other operating revenues consist primarily of product advertising (including vendor marketing programs), and other ancillary revenues which are recognized as income in the period earned. Proceeds received from advance ticket sales and gift certificates are recorded as deferred revenue. The Company recognizes revenue associated with gift certificates and advanced ticket sales at such time as the items are redeemed. Film rental costs are recorded based on the applicable admission sales pursuant to the terms of the film licenses.

(f) Income Taxes

Rave is a limited liability company; therefore, income taxes accrue to the individual holders of the membership units. As such no provision or credit for federal income taxes has been recorded in the accompanying restated consolidated statements of operations and members’ deficit. The Company is subject to state income taxes as applicable.

5

RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Notes to Restated Consolidated Financial Statements (Continued)

(1) Organization and Summary of Significant Accounting Policies, continued

(g) Fair Values of Financial Instruments

Fair values of financial instruments are estimated using available market information and other valuation methods, including using a discounted cash flow approach based on the interest rates currently available for similar debt. The fair value of financial instruments (including cash and cash equivalents, account receivable, accounts payable, accrued expenses, and variable rate long-term debt) is estimated to approximate the related recorded values as of September 27, 2012 and September 29, 2011.

(h) Inventories

Concession inventories are stated at the lower of cost (first-in, first-out method) or market.

(i) Other Long-Term Assets

Other long-term assets include deferred financing costs incurred in connection with the completion of certain financing transactions related to the long-term lease liabilities and the senior credit facility and are amortized over the term of the related financing using the effective interest method. Deferred financing costs, net of accumulated amortization of $157, were $44 at September 27, 2012. For the nine months ended September 27, 2012, amortization expense of $23 and $148 is included in depreciation and amortization expense and interest expense, respectively. Deferred financing costs, net of accumulated amortization of $556, were $44 at September 29, 2011. For the nine months ended September 29, 2011, amortization expense of $23 and $153 is included in depreciation and amortization expense and interest expense, respectively.

(j) Theater Pre-Opening Operating Costs

Costs incurred prior to the opening of a new theater (including advertising and payroll) are expensed as incurred. No theaters were opened during the nine months ended September 27, 2012 and September 29, 2011.

(k) Impairment of Long-Lived Assets

Management reviews long-lived assets for impairment on an annual basis in connection with its budgeting process and whenever events or circumstances indicate that the carrying amount of the assets may not be fully realizable. This includes periodic reviews of internal management reports and monitoring current and potential future competition in its markets for indicators of changes in events or circumstances that indicate impairment of individual theater assets. Theaters are evaluated for impairment on an individual basis, which management believes is the lowest level for which there are identifiable cash flows. Theaters are evaluated using historical and projected data of theater level cash flow as the primary indicator of potential impairment. If the estimated fair value computed using future theater cash flow is less than the carrying amount of the asset, an impairment loss is recognized for the amount by which the carrying value of the asset exceeds its estimated fair value. For the nine months ended September 27, 2012 and September 29, 2011, impairment losses of $607 and $419, respectively, were recognized for long-lived assets.

6

RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Notes to Restated Consolidated Financial Statements (Continued)

(1) Organization and Summary of Significant Accounting Policies, continued

(l) Deferred Revenue

Deferred revenue relates primarily to vendor programs, gift certificates and advance ticket sales, and is recognized as revenue as described in note 1(e) Revenue Recognition and Film Rental Costs.

(m) Accrued Straight-Line Rent and Deferred Rent Credits

Most of the Company’s operating leases contain rent escalations at various periods during the applicable lease term. The Company recognizes rental expense for minimum lease payments for these leases on a straight-line basis over the base term of the lease.

The Company conducts the majority of its business in leased properties whereby it constructs its theaters on leased land and receives reimbursement, in the form of an allowance, from the landlord for some portion of the cost of the building, including interest. During the construction period, Rave is considered the accounting owner of the theater because of its unlimited obligation to cover costs exceeding the landlord’s allowance. The construction cost of the theater consists of both structural elements and normal tenant improvements. Amounts received from the lessor in the form of tenant allowances is reflected as financing from the landlord for the structural elements and normal tenant improvements during the construction period.

Upon completion of the structural elements, determined by the Company to be one month prior to the store opening, a deemed sale-leaseback of the structural elements is effectuated. Those amounts received from the landlord in the form of tenant allowances for the structural elements are treated as sale proceeds. Since the Company has no prohibited form of continuing involvement as described in FASB Accounting Standards Codification (“ASC”) 976 Real Estate – Retail Land, and ASC 840 Leases, the amounts received from the landlord in respect of the structural elements are removed from the Company’s books. No gain or loss is recorded upon de-recognition of the asset and the related liability.

Upon the derecognition of the structural elements, the Company evaluates the terms of the leaseback to determine if the lease should be classified as an operating or capital lease under the provisions of ASC 840 Leases.

Any allowances from the landlord used for normal (i.e., nonstructural) tenant improvements and/or furniture, fixtures and equipment are reflected as property and equipment with a corresponding credit to deferred rent credits on the accompanying consolidated balance sheets. Amounts recorded to leasehold improvements and/or furniture and equipment are depreciated in accordance with the Company’s depreciation policies, while the corresponding amount credited as deferred rent is amortized as a credit to rent expense over the initial lease term.

7

RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Notes to Restated Consolidated Financial Statements (Continued)

(1) Organization and Summary of Significant Accounting Policies, continued

(n) Lease Liabilities and Operating Leases

The Company leases three of its theaters from an unrelated party under the terms of sale leaseback agreements accounted for as financing arrangements. Under the agreements, Rave has recorded these amounts as lease liabilities and has retained the related property and equipment in the accompanying restated consolidated balance sheets. The principal is amortized over the initial lease term of 20 years to reduce the net amount borrowed to equal the estimated net book value of the related theater assets at the end of the initial lease term. Upon expiration of the lease, the lessor retains title to the land, building, leasehold improvements, and equipment; therefore, no lump sum cash payment is expected at the end of the lease.

The Company leases theaters under non-cancelable operating leases with initial lease terms of 10 to 20 years. In addition to the minimum annual lease payment, the leases require the payment of taxes, insurance, and other costs applicable to the property. Certain leases also provide for contingent rentals based on operating results and include renewal options for additional periods up to 20 years.

(o) Advertising Costs

Advertising costs are expensed as incurred. Advertising costs were $610 and $660 for the nine months ended September 27, 2012 and September 29, 2011, respectively, and are included in the theater operating expenses in the restated consolidated statements of operations.

(2) Restatement of Previously Issued Consolidated Financial Statements

Following a review of the Company’s lease accounting practices in 2012, the Company corrected its method of accounting for certain theater leases where the Company was considered the owner during the construction period. The correction led to a review of the long-lived assets for impairment and resulted in the Company impairing the assets of six theaters as part of the restatement (see Note 1(k)).

Historically, when accounting for certain leases where the Company was considered the owner during the construction period, the Company recorded the lease using sale-leaseback accounting after the construction was completed. During review the Company determined it had continuing involvement related to the renewal options at a fixed rental rate. This form of continuing involvement precluded sale-leaseback accounting. The Company revised its accounting to capitalize certain theater leases previously recorded as operating leases.

When evaluating the lease term, the Company had previously considered the base lease term only for those leases with a fixed rental rate. For the leases with renewal options at a fixed rental rate, the Company revised the lease analysis to include the extended lease term.

The correction of changing the accounting of certain leases to capital leases required the Company to consider impairment of the theater assets, including the capitalized leases. The review followed the processes described in Note 1(k) Impairment of Long-Lived Assets, and resulted in impairment losses of long-lived assets at six theaters.

The consolidated balance sheet as of September 29, 2011 and the related consolidated statements of operations and members’ deficit and cash flows for the period then ended have been restated for the identified corrections.

8

RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Notes to Restated Consolidated Financial Statements (Continued)

(2) Restatement of Previously Issued Consolidated Financial Statements, continued

	As of and for the Period Ended September 29, 2011
	As Previously Reported			Adjustments			As Restated
Consolidated Balance Sheet
Property and equipment, net	$	124,119		$	(19,601	)	$	104,518
Total assets		132,108			(19,601	)		112,507
Current portion of long-term lease liabilities		1,957			858			2,815
Current portion of accrued straight-line rent and deferred rent credits		4,700			(3,325	)		1,375
Total current liabilities		23,670			(2,161	)		21,509
Long-term lease liabilities		23,197			99,352			122,549
Accrued straight-line rent and deferred rent credits		63,942			(54,230	)		9,712
Total liabilities		110,809			42,961			153,770
Accumulated deficit		(46,412	)		(62,562	)		(108,974	)
Total members’ equity		21,299			(62,562	)		(41,263	)
Consolidated Statement of Operations
Theater operating expenses	$	49,931		$	(18,121	)	$	31,810
Depreciation and amortization		9,413			(1,793	)		7,620
Fixed asset impairment		—			419			419
Operating income		1,154			13,495			14,649
Cash interest expense		(2,896	)		(12,989	)		(15,885	)
Net loss		(2,044	)		506			(1,538	)

(3) Related Party Receivable

The Company has a $348 and $338 note receivable due from one of its former officers at September 27, 2012 and September 29, 2011, respectively. The former officer’s interest in Company stock is pledged as a security interest for the note. The note receivable accrues interest. Interest accumulated during the nine months ended September 27, 2012 and September 29, 2011 was $7 and $6, respectively. In April 2010, the Company entered into an amended note with the former officer where the former officer redeemed 285 Class A member units valued at $359, which was applied against the note receivable, and the due date was extended to March 31, 2015. In fiscal year 2011 the note receivable was in default due to a failure to pay scheduled principal payments and the note receivable is due and payable on demand and therefore classified as current.

9

RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Notes to Restated Consolidated Financial Statements (Continued)

(4) Senior Credit Facility

On December 20, 2006, the Company entered into a credit agreement with General Electric Credit Capital Corporation, as agent (the “Credit Agreement”).

The Credit Agreement includes the following:

• Loan Commitments – The Credit Agreement initially was comprised of a $35 million revolving loan commitment, a $30 million term commitment, and a $5 million liquidity loan commitment. The commitments may be permanently reduced if certain events occur (as defined in the Credit Agreement) or at the Company’s option. The Company permanently reduced the commitment in 2007 by $3 million and in 2009 by $55 million. On December 8, 2010 the credit agreement was amended to extend the termination date to December 17, 2011 and reduce the commitment by $2 million. On December 13, 2011 a second amendment was signed to extend the termination date to December 17, 2012, reduce the commitment by $4 million to a $6 million revolving loan.

• Commitment and Ticking Fees – The Company is required to pay a 1% per annum fee on the average unused amount of the Credit Agreement.

• Guarantee, Collateral, and Financial Covenants – The Company’s obligations under the Credit Agreement are guaranteed by all of its subsidiaries. Such guarantees are secured by a pledge by Rave of all of the capital stock of the subsidiaries as well as a security interest in substantially all of the subsidiaries’ assets.

In addition to the above guarantees and security interests, the Credit Agreement also contains certain covenants that, among others, restrict incurring additional indebtedness, liens on property, merger or consolidation, capital expenditures, investments and transactions in the capital accounts of Rave and its subsidiaries.

Amounts borrowed under the Credit Agreement bear interest at rates based upon an Index Rate (as defined in the Credit Agreement) plus an applicable margin rate predicated upon meeting certain covenant ratios. The average effective interest rate under the Credit Agreements during the nine months ended September 27, 2012 and September 29, 2011 was 5.25% for both periods. The balance of the Credit Agreement at September 27, 2012 and September 29, 2011 was $1,000 and $1,000, respectively and borrowing availability at September 27, 2012 and September 29, 2011 was $5,000, and $9,000, respectively.

10

RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Notes to Restated Consolidated Financial Statements (Continued)

(5) Members’ Deficit

Members’ deficit is comprised of seven classes of units – Class A, A-1, B, B-1, B-2, C, and D Units. The A Units and A-1 Units, issued for $1 per unit, and majority owned by Boston Ventures Limited Partnerships V and VI, have all of the voting rights, including the ability to elect the board of managers, and certain preferences over other classes of units as it relates to return of invested capital, among others. B Units, issued to members of the Company’s senior management at the date of issuance, have preference over A, C, and D units as it relates to distributions of cash or property after certain levels of investment returns have been achieved by Boston Ventures Limited Partnership V. The B Units and B-1 Units are subject to forfeiture under certain circumstances. Certain nonvoting A Units, and C and D Units issued to unrelated parties in connection with the Company’s initial capitalization and subsequent financings are also eligible to participate in distributions of cash or property once Boston Ventures Limited Partnership V has achieved a certain level of return on its investment. The B, B-1, B-2, C, and D units were issued for $0 per unit. No value was assigned to the B, C, and D Units upon issuance in the accompanying restated Restatement of Previously Issued consolidated balance sheets since the Company was unable to estimate the probability of achieving the investment returns of Boston Ventures Limited Partnership V. Management continually evaluates the likelihood of Boston Ventures Limited Partnership V achieving the above noted investment returns and continues to be unable to estimate the related probability at September 27, 2012.

The units issued and outstanding consist of the following:

Class	September 27, 2012		September 29, 2011
A		52,138		52,138
A-1		21,426		21,426
B		8,800		8,800
B-1		10,000		10,000
B-2		12		12
C		100		100
D		100		100
Total		92,576		92,576

(6) Commitments and Contingencies

The Company is involved in various legal actions arising in the ordinary course of business. In the opinion of management, the ultimate liability, if any, resulting from such legal actions will not have a material adverse effect on the Company’s consolidated financial position or results of operations.

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RAVE REVIEWS CINEMAS, L.L.C.

AND SUBSIDIARIES

Notes to Restated Consolidated Financial Statements (Continued)

(7) Subsequent Events

Management has evaluated all material subsequent events or transactions that occurred after September 27, 2012 through December 13, 2012, the date these restated consolidated financial statements were available to be issued, and determined no such events or transactions that would impact these consolidated financial statements, except as follows:

On September 28, 2012, the Company entered into an agreement with Carmike Cinemas, Inc. to sell the membership interests of a wholly-owned holding company comprised of sixteen subsidiaries, which operates sixteen theater locations with a total of 251 screens. This transaction closed on November 15, 2012. The purchase price consisted of $19 million of cash, subject to customary working capital adjustments, and $100.4 million of assumed lease obligations. Simultaneous with the closing of this transaction, the Company paid off all borrowings under the Credit Agreement with General Electric Credit Capital Corporation and terminated the Credit Agreement effective as of November 15, 2012.

On November 21, 2012, the Company entered into an agreement with American Multi-Cinema, Inc. to sell the membership interests of a wholly owned holding company consisting of the four remaining operating subsidiaries, which operates four theaters with a total of 61 screens. This transaction is subject to normal closing conditions and is expected to close in the fourth quarter of 2012.

On November 30, 2012, the Company ceased operations at its 14-screen theater located in Michigan.

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