−Removed: Risk Factors.
−Removed: Risks Related to a Health Emergency
−Removed: Health emergencies may adversely impact our business.
−Removed: Government responses to health emergencies have significantly impacted the economy.
−Removed: Although our business did not experience significant adverse effects during the peak of COVID-19, its variants or another virus could negatively affect our business.
−Removed: Possible outcomes include declines in customer traffic at our restaurants, our inability to staff our restaurants fully, and, in more severe cases, a temporary restaurant closure, difficulty in our ability to obtain supplies, and increased commodity costs, possibly for prolonged periods of time.
−Removed: The impact of health emergencies on our business, markets, supply chain, customers, and workforce is contingent upon unpredictable future developments, which may significantly influence our business operations, liquidity, financial condition, and overall performance.
+Added: An investment in our securities involves a high degree of risk.
+Added: You should carefully consider the risks described below, together with the other information in this Annual Report.
+Added: The risks described are not the only risks we face, and additional risks not presently known or that we currently deem immaterial may also impair our business.
+Added: If any of the following risks occur, our business, financial condition, results of operations, and cash flow could be materially adversely affected, and the market price of our common stock and warrants could decline.
+Added: Risks Related to the Proposed Business Combination with Aero Velocity
+Added: The proposed Merger with Aero Velocity may not be completed on the anticipated terms or timeline, or at all.
+Added: The proposed business combination with Aero Velocity Inc.
+Added: (“Aero”) is subject to numerous conditions, including stockholder approval, the effectiveness of required registration statements, regulatory and exchange approvals, and the satisfaction or waiver of customary closing conditions.
+Added: There can be no assurance that these conditions will be satisfied or waived.
+Added: Regulatory review, SEC comments, financing conditions, or other factors could delay or prevent completion.
+Added: If the transaction is not completed, we may incur substantial legal, accounting, advisory, and other transaction-related expenses without realizing anticipated benefits.
+Added: The pendency of the transaction may also create operational disruption, harm relationships with employees and business partners, and adversely affect our stock price.
+Added: The proposed Merger will fundamentally change the nature of our business, and our historical results will not be indicative of future performance.
+Added: If completed, the combined company is expected to focus primarily on unmanned aerial vehicle manufacturing and related services rather than restaurant operations.
+Added: Our historical financial statements reflect restaurant operations and will not be indicative of the future performance, financial condition, or risk profile of the combined company.
+Added: The transaction represents a significant strategic shift into an industry with different capital requirements, regulatory frameworks, operational risks, and competitive dynamics.
+Added: Investors who purchased our securities based on our historical restaurant operations will own securities in a company operating in a different industry.
+Added: If the combined company fails to execute its business plan, the value of our securities could decline materially.
+Added: If the proposed Merger is completed, our existing stockholders will experience substantial dilution and reduced voting power, and Aero stockholders are expected to obtain control of the combined company.
+Added: Upon completion of the proposed business combination, our existing stockholders are expected to hold a minority ownership interest in the combined company.
+Added: The transaction contemplates the issuance of a significant amount of convertible preferred stock to Aero stockholders.
+Added: A certain series of this preferred stock is expected to carry voting rights that are disproportionate to its economic ownership, including enhanced voting rights on an as-converted basis.
+Added: As a result, Aero stockholders are expected to control the election of directors and the outcome of matters submitted to a stockholder vote.
+Added: Our existing common stockholders will have limited ability to influence corporate governance, strategic decisions, or other significant matters, and the market price of our common stock could be adversely affected.
+Added: In addition, conversion of the preferred stock into common stock at the stated conversion price could result in substantial dilution to existing stockholders, particularly if the market price of our common stock is below or near the conversion price at the time of conversion.
+Added: The proposed spin-off of BT Group, Inc.
+Added: is not expected to qualify as a tax-free transaction and may result in taxable income to our stockholders.
+Added: The contemplated spin-off of BT Group, Inc.
+Added: is not expected to qualify as a tax-free transaction for U.S.
+Added: federal income tax purposes.
+Added: As a result, stockholders may recognize taxable income upon the distribution of BT Group shares, potentially without receiving cash to satisfy the resulting tax liabilities.
+Added: The tax treatment of the spin-off may vary depending on individual circumstances, and we do not currently intend to seek an IRS ruling regarding its tax consequences.
+Added: Any taxable treatment could reduce the value received by stockholders and adversely affect trading prices.
+Added: We may not realize the anticipated benefits of the proposed business combination, and the merged company may face significant operational, financial, and strategic challenges.
+Added: Even if the proposed business combination is completed, there can be no assurance that the combined company will achieve the anticipated benefits of the transaction.
+Added: Realizing those benefits will depend, among other things, on the combined company’s ability to execute its business plan, attract and retain key personnel, obtain financing on acceptable terms, manage its capital structure, comply with applicable regulatory and listing requirements, and respond effectively to competitive and market conditions.
+Added: The combined company may also face unanticipated costs, liabilities, or challenges, and management’s attention may be diverted toward integration, reporting, and strategic matters following the transaction, which could adversely affect operating performance.
+Added: The proposed spin-off of BT Group, Inc., may not be completed, may be delayed, or may not achieve its intended objectives.
+Added: The proposed business combination with Aero contemplates a spin-off of BT Group, Inc., which would hold our restaurant operations and related assets and liabilities.
+Added: The spin-off is subject to various conditions and approvals and may be delayed, not completed on the anticipated terms or timeline, or not completed at all.
+Added: Even if completed, there can be no assurance that BT Group, Inc.
+Added: will achieve a public listing, operate successfully as a standalone company, or deliver value to our stockholders.
+Added: Failure to complete the spin-off as contemplated, or adverse market or regulatory conditions affecting BT Group, Inc., could negatively affect the overall structure and anticipated benefits of the proposed transaction.
+Added: The proposed business combination could expose us to litigation, regulatory scrutiny, and stockholder claims.
+Added: Transactions of the type contemplated by the proposed business combination frequently result in litigation, including stockholder lawsuits challenging the transaction, the consideration to be received, or the disclosure provided in connection with the transaction.
+Added: Defending such actions could be costly, time-consuming, and distracting to management, regardless of the outcome, and could result in significant liability or settlement costs.
+Added: In addition, regulatory authorities, including the SEC and Nasdaq, may review aspects of the proposed transaction, which could result in delays, additional disclosure requirements, or conditions to completion.
+Added: The combined company may face risks related to continued listing standards and market acceptance following the transaction.
+Added: Following completion of the proposed business combination, the combined company will remain subject to the continued listing requirements of The Nasdaq Stock Market, including requirements relating to stock price, market capitalization, stockholders’ equity, governance, and public float.
+Added: There is no assurance that the combined company will be able to meet these requirements.
+Added: Any failure to satisfy applicable listing standards could result in delisting, which would reduce the liquidity of the combined company’s securities, limit access to capital, and adversely affect the market price of our common stock.
Risks Related to Our Growth Strategy
−Removed: Acquiring or opening new restaurants is subject to risks and challenges.
−Removed: We expect to face challenges if we acquire or open new restaurants;
−Removed: many of these challenges pose risks that are beyond our control, including, but not limited to, our ability to acquire locations at a favorable cost, the expense and other factors involved in remodeling or updating locations, hiring managerial personnel and our lack of familiarity with local regulations.
−Removed: Any of these challenges, as well as others we may have yet to identify, could result in significant unanticipated costs being incurred.
−Removed: As discussed throughout this Annual Report, difficulties of integration include coordinating and consolidating geographically separated systems and facilities, integrating the management and personnel of the acquired brands, maintaining employee morale and retaining key employees, implementing our management information systems and financial accounting and reporting systems, establishing and maintaining effective internal control over financial reporting, and implementing operational procedures and disciplines to control costs and increase profitability.
−Removed: In addition, we must have the liquidity to nurture our acquisitions financially.
−Removed: Given the numerous factors involved, we may not be able to identify and secure attractive restaurant acquisitions successfully, and following an acquisition, we may not be able to successfully operate the acquired business, which could have a material adverse effect on our business, financial condition, and results of operations.
−Removed: If we acquire additional restaurant businesses, the integration and operation of acquisitions may place significant demands on our management, adversely affecting our ability to manage our existing restaurants.
−Removed: In addition, we may be required to obtain additional financing to fund future acquisitions, and there can be no assurance that we can acquire additional financing on acceptable terms or at all.
−Removed: There are numerous factors involved in identifying, evaluating, and securing restaurant acquisition, including:
−Removed: evaluating traffic patterns and infrastructure that will drive customer traffic and sales;
−Removed: competition in new markets, including competition for restaurant sites;
−Removed: obtaining licenses or permits for development projects on a timely basis;
−Removed: the proximity of potential restaurant sites to existing restaurants;
−Removed: anticipated infrastructure development near the potential restaurant site and
−Removed: availability of acceptable acquisition or lease terms and arrangements.
−Removed: The acquisition of existing restaurants is risky and could negatively impact our financial results.
−Removed: We are evaluating our strategy of expanding our business by acquiring existing restaurant businesses.
−Removed: In the event we make restaurant acquisitions in the future, any such business may be in geographic regions in which we have not operated and may offer food concepts significantly different from our existing business.
−Removed: Our strategy to pursue expansion through the acquisition of existing restaurant businesses is subject to risks and uncertainties, including all the risks of our current operations as outlined in this Annual Report and other factors, including:
−Removed: investigating a potential acquisition, including negotiating and drafting agreements and documents, requires substantial management time and costs.
−Removed: If we do not complete a target acquisition, the costs incurred likely would not be recoverable;
−Removed: a target business may be a privately held company with very information available;
−Removed: the business that we acquire may be financially unstable;
−Removed: we may not be able to retain the management or other key personnel of the business that we acquire;
−Removed: our corporate culture could differ from the corporate culture of the business that we acquire, making the integration of the acquired target business difficult;
−Removed: our ability to assess the management of a target business may be limited;
−Removed: we may experience impairment of acquired tangible and intangible assets and goodwill;
−Removed: the target business may have unknown liabilities;
−Removed: we may incur debt to complete an acquisition, and debt could have a variety of adverse effects, including:
−Removed: foreclosure on our assets if our operating revenues are insufficient to repay our debt obligations;
−Removed: immediate payment of all principal and accrued interest if the debt security is payable on demand;
−Removed: such debt may include covenants that prohibit us from paying dividends on our common stock;
−Removed: using a substantial portion of our cash flow to pay principal and interest on our debt, reducing funds available for dividends on our common stock, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate purposes;
−Removed: limitations on our flexibility in planning for changes in our business and the industry;
−Removed: increased vulnerability to adverse changes in general economic and competitive conditions and adverse changes in government regulation;
−Removed: such debt may include covenants that limit our ability to borrow additional amounts:
−Removed: other disadvantages compared to competitors with lower leverage.
−Removed: These factors, among the many other risks and uncertainties typically associated with acquisitions of existing businesses, could negatively impact our Company, which would have a material adverse effect on our business, financial condition, and results of operations.
−Removed: Acquisitions may have unanticipated consequences that could harm our business and our financial condition.
−Removed: Any acquisition that we pursue, whether completed or not, involves risks, including:
−Removed: material adverse effects on our operating results, particularly in the quarters immediately following the acquisition, as the acquired restaurants are integrated into our operations;
−Removed: potential impairment of tangible and intangible assets and goodwill acquired in the acquisition;
−Removed: potential unknown liabilities;
−Removed: difficulties of integration and failure to realize anticipated synergies;
−Removed: disruption of our ongoing business, including the diversion of management’s attention.
−Removed: Future acquisitions may be through a cash purchase transaction, the issuance of our equity securities, or a combination of both, which could result in potentially dilutive issuances of our equity securities.
−Removed: Alternatively, we may incur debt and assume contingent liabilities, which could harm our business and financial condition.
−Removed: Failure to manage new restaurants properly could negatively impact our operations and deplete our capital resources.
−Removed: Though we expect to retain key personnel of any existing restaurant group to assist with managing the restaurants, we may not be able to retain such personnel for any meaningful period.
−Removed: Moreover, even if we retain management from the acquired business, our executive officers may not manage the new restaurants profitably for numerous reasons, including our inability to predict consumer preferences and trends that drive the success of these types of restaurants.
−Removed: Any failure to effectively manage the restaurants comprising an acquired restaurant group could, among other negative effects, adversely impact our operations and deplete our capital resources, affecting our financial condition and the market price for our common stock.
−Removed: Our growth strategy requires substantial additional capital to execute, which may not be available.
−Removed: Our growth depends principally on acquiring new restaurants and operating those restaurants on a profitable basis.
−Removed: The cost of acquiring a business will be based on several factors, including the number of restaurants comprising the group and their profitability, and we may not have the resources to fund desirable acquisitions.
−Removed: If we require additional capital to continue our growth plans, we may seek to raise capital through equity or debt financing.
−Removed: If we raise additional funds through issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock.
−Removed: Any future debt financing secured by us could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, making it more difficult for us to obtain additional capital and pursue business opportunities, including making further attractive acquisitions or opening new restaurants.
−Removed: Moreover, if we issue debt securities, the debt holders would have rights senior to common stockholders to make claims on our assets.
−Removed: In addition, we might not be able to obtain additional financing on terms favorable to us, if at all.
−Removed: If we cannot obtain adequate financing on satisfactory terms, our ability to support our business growth and respond to business challenges could be significantly limited.
−Removed: Rising interest rates could negatively impact our performance and acquisition plans.
−Removed: Rising interest rates could significantly increase our borrowing costs or make it difficult or impossible for us to obtain financing in the future.
−Removed: An increased cost of borrowing would make it more expensive for us to borrow funds to acquire new businesses and negatively impact our results of operations.
−Removed: If we cannot obtain financing in the future, our growth could be affected.
−Removed: Our growth strategy may divert management’s attention from operating our existing restaurants.
−Removed: As we grow, management will be focused on the numerous complex and time-consuming activities required to acquire or open new restaurants and to integrate and operate an existing restaurant group.
−Removed: These activities may divert management’s attention from our existing restaurants, and our existing restaurants may suffer.
−Removed: Implementing our growth strategies may reduce the time available to manage our current restaurants, potentially harming our revenue, business, financial condition, and operations.
−Removed: We may enter into additional long-term, non-cancellable leases.
−Removed: In connection with acquired restaurants, we have entered into long-term, non-cancelable leases for the space in which such restaurants operate.
−Removed: Further, future acquisitions may be subject to long-term, non-cancelable leases.
−Removed: Under non-cancelable leases, we may be required to pay all or a portion of the real estate taxes, insurance, common area maintenance charges, and other operating costs associated with the property.
−Removed: In addition, non-cancelable leases may provide contingent rental payments based on sales thresholds.
−Removed: If acquired restaurants are subject to long-term non-cancelable leases or we enter into such leases when we acquire a restaurant and such restaurants are not profitable, and we decide to close one or more of them, we may nonetheless be committed to perform our obligations under the applicable leases including, among other things, paying the base rent and other expenses that we agreed to pay for the balance of the lease term.
−Removed: In addition, as leases for our restaurants expire, we may need to negotiate renewals, which could cause us to pay increased occupancy costs or close restaurants in desirable locations.
−Removed: These payments and costs, as well as the failure to negotiate new leases for restaurants, could have a material adverse effect on our business, financial condition, and results of operations.
−Removed: Difficulties managing our growth could adversely affect operations.
−Removed: If we experience rapid and substantial growth, it will strain our administrative infrastructure and our managerial and financial resources.
−Removed: To manage the significant growth of our operations, we will be required to:
−Removed: implement new, operational, financial and management controls, reporting systems and procedures;
−Removed: install enhanced management information systems;
−Removed: hire, train, motivate, manage, and retain our employees.
−Removed: We may be unable to install adequate management information and control systems efficiently and timely.
−Removed: Our current or planned personnel, systems, procedures, and controls may need to be revised to support our future operations.
−Removed: Our business could be seriously harmed if we cannot manage growth effectively.
−Removed: Risks Related to the Nature of Our Business and Operating in the Restaurant Industry
−Removed: Our inability to compete effectively may affect sales and restaurant-level profit margins, adversely affecting our results of operations.
−Removed: The restaurant industry is intensely competitive, with many well-established companies competing directly and indirectly with us.
−Removed: We compete with national, regional, locally owned, quick-service, casual, and full-service restaurants.
−Removed: Many of our competitors have significantly greater financial, marketing, personnel, and other resources than we do.
−Removed: Many of our competitors are well-established in markets where we have existing restaurants or may acquire new ones.
−Removed: In addition, many of our competitors have greater name recognition nationally.
−Removed: The failure to successfully compete with the restaurants in our markets could result in declining customer traffic and may prevent us from increasing or sustaining our revenues and profitability.
−Removed: Success in the restaurant industry is based on various factors, including changes in consumer tastes, nutritional and dietary trends, consumer spending, traffic patterns, and the type, number, and location of competing restaurants often affect the restaurant.
−Removed: Our competitors may react more efficiently and effectively to those conditions.
−Removed: Further, we face growing competition from the supermarket industry, with improvements in meal preparation and delivery alternatives.
−Removed: Additionally, there is increased competition from limited-service and fast-casual restaurants that are aggressively pursuing delivery and “to-go” programs.
−Removed: Meal kit delivery companies and other eat-at-home options also compete with traditional restaurants.
−Removed: In addition, our competitors in the past have offered and promoted price discounts on specific menu offerings, and they may continue to do so in the future.
−Removed: If we cannot continue to compete effectively, our traffic, sales and restaurant-level profit margins could decline, and our business, financial condition and results of operations would be adversely affected.
−Removed: Our inability to raise menu prices could result in a decline in profitability.
−Removed: We seek to increase menu prices to help offset costs, including the increased cost for commodities, minimum wages, employee benefits, insurance arrangements, construction, utilities, and other essential operating costs resulting from general inflation.
−Removed: If consumers do not accept menu price increases, resulting in reduced guest traffic, our financial results would be negatively affected.
−Removed: Public attitudes regarding diet and health could result in new regulations influencing consumers.
−Removed: Changes in diet attitudes, health information, or government regulations could affect consumer habits and impact our business, finances, and operations.
−Removed: While currently exempt from requirements, changes in laws and regulations may require us to disclose the nutritional content of our food offerings.
−Removed: We may be unable to effectively respond to changes in consumer health perceptions, successfully implement the nutrient content disclosure requirements, and adapt our menu offerings to eating habits.
−Removed: The imposition of menu labeling laws and an inability to keep up with consumer eating habits could materially affect our business, financial condition, results of operations, and position within the restaurant industry.
−Removed: Unfavorable publicity could reduce sales at our restaurants.
−Removed: We may face negative publicity, including comments on social media relating to aspects of our business.
−Removed: Public comments may address, among others, food quality, public health concerns, restaurant facilities, customer complaints or litigation alleging illness or injury, health inspection scores, the integrity of our suppliers’ food processing and other policies, practices and procedures, employee relationships or other matters at one or more of our restaurants.
−Removed: Negative publicity regarding our restaurants may adversely affect us, regardless of whether the comments are valid.
−Removed: In addition, the negative impact of adverse publicity relating to one restaurant may extend beyond the restaurant involved to affect our other restaurants.
−Removed: A similar risk exists concerning food service businesses that are unrelated to us if customers mistakenly associate such businesses with our operations.
−Removed: Employee claims against us based on, among other things, wage and hour violations, discrimination, harassment, or wrongful termination may also create not only legal and financial liability but also negative publicity that could adversely affect us and divert our financial and management resources that would otherwise be exerted in favor of our operations.
−Removed: These risks are amplified because of the prevalence of social media.
−Removed: Adverse social media comments and negative publicity could materially adversely affect our business, financial condition, results of operations and cash flows.
−Removed: Food safety concerns could harm our business by reducing demand and increasing costs.
−Removed: The occurrence or reports of food-borne illnesses and food safety issues have occurred in the food industry and could occur in the future.
−Removed: Any report or publicity linking us to food-borne illness or other food safety issues, including food tampering or contamination, could adversely affect our brand, reputation, revenues, and profits.
−Removed: In addition, food-borne illness, food tampering, or food contamination at our competitors’ restaurants could result in negative publicity about the food service industry and adversely impact our sales.
−Removed: Furthermore, our reliance on external food suppliers and distributors increases the risk that factors outside our control could cause food-borne illness incidents and that multiple locations would be affected rather than a single restaurant.
−Removed: We cannot ensure that all food items are properly maintained during transport throughout the supply chain and that our employees will identify all products that may be spoiled or contaminated.
−Removed: Food-borne illnesses could result in temporary restaurant closings.
−Removed: Furthermore, any instances of food contamination, whether or not at our restaurants, could subject our suppliers or us to a food advisory, recall or withdrawal under the Food Safety Modernization Act.
−Removed: Risks Related to Inflation, Labor and Supply Chain
−Removed: Increased commodity, energy and other costs could decrease our restaurant-level profit margins.
−Removed: Our profitability depends in part on our ability to anticipate and react to changes in the price and availability of food commodities, including, among other things, beef, poultry, grains, dairy, and produce.
−Removed: Prices may be affected due to market changes, increased competition, public health issues, inflation, shortages, or interruptions in supply due to weather, disease, or other conditions beyond our control, or other reasons.
−Removed: Other events could increase commodity prices or cause shortages that could affect the cost and quality of the items we buy or require us to raise prices or limit our menu options.
−Removed: These events and general economic and demographic conditions may impact our pricing and adversely affect our sales and restaurant-level profit margins.
−Removed: We do not enter into forward pricing arrangements with our suppliers, making us more susceptible to changes in commodity prices.
−Removed: Our profitability is also adversely affected by increases in the price of utilities, such as natural gas, whether due to inflation, shortages, interruptions in supply, or otherwise.
−Removed: Our profitability is also affected by insurance, labor, marketing, taxes, and real estate costs, which could increase due to inflation, changes in laws, competition, or other events beyond our control.
−Removed: Our ability to respond to and react to such increases and other more general economic and demographic conditions will depend on various factors, including the responses of our competitors and customers.
−Removed: Competition and other factors may constrain our ability to respond to increasing costs by raising menu prices.
−Removed: All these things may be difficult to predict and beyond our control.
−Removed: In this manner, increased costs could adversely affect our performance.
−Removed: Shortages or interruptions in the supply or delivery of fresh food products could adversely affect our operating results.
−Removed: We depend on frequent deliveries of fresh food products that meet our specifications.
−Removed: Shortages or interruptions in the supply of fresh food products caused by problems in production or distribution, inclement weather, unanticipated demand, or other conditions could adversely affect the availability, quality, and cost of ingredients, adversely affecting our operating results.
−Removed: We rely on certain suppliers and distributors for all our supplies.
−Removed: During 2024, we purchased approximately 30% of our food, paper, packaging, and related supplies from Sysco Corporation, the nation’s largest distributor of food products.
−Removed: In July 2024, we entered into a new primary supplier relationship for BTND with Performance Food Service, a Sysco competitor.
−Removed: We continue to utilize Sysco in certain locations, including PIE.
−Removed: In addition, for BTND, we purchase beverages other than coffee, tea, or milk from PepsiCo and its affiliated bottlers.
−Removed: These entities are also responsible for delivering these products to us.
−Removed: Our reliance on these vendors exclusively provides us with our entire inventory at reasonable prices, presenting certain risks.
−Removed: We do not control the businesses of our vendors, and our efforts to specify and monitor the standards under which they perform may not be successful.
−Removed: If our current vendors are unable to support our expansion into new markets, or if we are unable to find vendors to meet our supply specifications or service needs as we expand, we could likewise encounter supply shortages and incur higher costs to secure adequate supplies, which would have a material adverse effect on our business, financial condition, and results of operations.
−Removed: We rely on the services of our Chief Executive Officer and Chief Operating Officer to operate our business.
−Removed: We rely on Gary Copperud, our Chief Executive Officer, and Kenneth Brimmer, our Chief Operating Officer, to make all key decisions relating to our operations and finances.
−Removed: The unexpected loss of Messrs.
−Removed: Copperud or Brimmer’s services would adversely affect our business and plans for future growth.
−Removed: Further, neither of these individuals devotes full-time efforts to the Company, as further described under the heading “Management.”
−Removed: The inability to attract, train and retain personnel could adversely impact our business and financial results.
−Removed: Our success depends on our ability to attract, motivate, and retain qualified managers and the services of skilled personnel.
−Removed: Qualified individuals may be in short supply in some communities.
−Removed: Competition for qualified staff and improvement in regional or national economic conditions could increase the difficulty of attracting and retaining skilled individuals, resulting in higher costs.
−Removed: Our inability to attract and retain staff could adversely affect our business, including restaurant operating hours.
−Removed: We believe managers are the critical component of our business.
−Removed: We devote resources to recruiting and training our restaurant managers and staff.
−Removed: We attempt to reduce employee turnover in our restaurants.
−Removed: Employee turnover may hurt our operating results by increasing training costs and making it more difficult to deliver outstanding customer service, adversely affecting our financial results.
−Removed: Challenges in retaining or recruiting qualified employees and increased costs associated with those activities could adversely affect our business and the results of operations.
−Removed: Unionization activities or labor disputes could disrupt our operations and affect our profitability.
−Removed: Although none of our employees are currently covered under collective bargaining agreements, our employees may elect to be represented by labor unions in the future.
−Removed: If a substantial number of our employees were to become unionized and collective bargaining agreement terms were significantly different from our current compensation arrangements, it could adversely affect our business, financial condition, or results of operations.
−Removed: In addition, a labor dispute involving some or all of our employees may harm our reputation, disrupt our operations, and reduce our revenues.
−Removed: The resolution of disputes may increase our costs.
−Removed: Also, as an employer, we may be subject to employment-related claims, such as individual or class actions or government enforcement actions relating to alleged employment discrimination, employee classification and related withholding, wage-hour, labor standards or healthcare and benefits issues.
−Removed: Such actions, if brought against us and successful in whole or in part, may affect our ability to compete or could adversely affect our business, financial condition, or results of operations.
−Removed: Risks Related to Information Technology Systems, Cybersecurity and Data Privacy
−Removed: System failures or network security breaches could interrupt our operations and adversely affect our business.
−Removed: We rely on our computer systems and network infrastructure across our operations, including point-of-sale processing at our restaurants.
−Removed: Our operations are supported and administered by third-party vendors’ ability to protect our computer equipment and systems against damage from physical theft, fire, power loss, telecommunications failure, or other catastrophic events, as well as from internal and external security breaches, viruses, and other disruptive problems.
−Removed: Damage or failure of third-party provider computer systems or network infrastructure that causes an interruption in our operations could have a material adverse effect on our business and subject us to litigation or actions by regulatory authorities.
−Removed: In addition, an increasing number of transactions are processed through our mobile application.
−Removed: Disruptions, failures, or other performance issues with technology systems could impair the benefits such systems provide to our business and negatively impact our relationship with our customers.
−Removed: Security breaches of customer information due to cyber-attacks may adversely affect our business.
−Removed: Any intentional cyber-attack or unintentional event that results in unauthorized access to systems to disrupt operations, corrupt data or steal or expose confidential information or intellectual property that compromises the information of our customers or employees could result in negative publicity, damage to our reputation, a loss of customers, disruption of our business and legal liabilities.
−Removed: As our reliance on technology has grown, the scope and severity of risks posed to our systems from cyber threats have increased.
−Removed: The techniques and sophistication used to conduct cyber-attacks and breaches of information technology systems, as well as the sources and targets of these attacks, change frequently and are only recognized once attacks are launched or have been in place for some time.
−Removed: We continuously monitor our information technology networks and infrastructure to prevent, detect, address, and mitigate the risk of unauthorized access, misuse, malware, and other events that could have a security impact;
−Removed: however, there can be no assurance that these or any measures will be effective.
−Removed: Additionally, the majority of our sales are by credit or debit cards, which are processed by third-party organizations completely independent of us.
−Removed: In terms of credit and debit card processing, we do not retain any customer information.
−Removed: Other restaurants and retailers have experienced security breaches in which their customers’ credit and debit card information has been compromised.
−Removed: In the event of a data breach, we may become subject to lawsuits or other proceedings for purportedly fraudulent transactions arising from the actual or alleged theft of confidential or personal information and credit or debit card information.
−Removed: Any security breach or other material interruption in the information technology systems we rely on, particularly those required for point-of-sale payment processing in our stores, such as cybersecurity attacks, may adversely affect our business, operating results and financial condition.
−Removed: Failure to effectively manage social media could adversely impact our business.
−Removed: The use of social media platforms has increased significantly.
−Removed: This includes blogs, chat platforms, social media websites, and other Internet-based communications, enabling individuals to reach a broad audience of consumers.
−Removed: The rising popularity of social media and other consumer-oriented technologies has increased the speed and accessibility of information dissemination.
−Removed: Many social media platforms immediately publish the content their subscribers and participants post, often without filters or checks on the accuracy of the content posted.
−Removed: Information posted on such platforms at any time may be adverse to our interests or inaccurate.
−Removed: The dissemination of information via social media could harm our business, reputation, financial condition, and results of operations, regardless of the information’s accuracy.
−Removed: The damage may be immediate without us having an opportunity for redress or correction.
−Removed: In addition, we may use social media to communicate with our customers and the general public.
−Removed: Failure by us to use social media effectively or appropriately, particularly as compared to our brands’ respective competitors, could lead to a decline in brand value, customer visits and revenue.
−Removed: Other risks associated with the use of social media include improper disclosure of proprietary information, negative comments about our brands, exposure of personally identifiable information, fraud, hoaxes, or malicious dissemination of false information.
−Removed: Our customers’ or employees’ inappropriate use of social media could increase our costs, lead to litigation, or result in negative publicity that could damage our reputation and adversely affect our business.
+Added: If our proposed merger with Aero Velocity does not close, or if the related spin-off of our restaurant operations is not completed, our growth strategy and business outlook may change.
+Added: The Merger Agreement with Aero Velocity contemplates a spin-off of our existing restaurant operations into a new company.
+Added: If either the merger or the spin-off is delayed, renegotiated, or fails to close, we may incur transaction-related costs, experience operational disruption, or be required to reassess our strategic focus.
+Added: Uncertainty surrounding the Merger may also affect investor perception, employee retention, and partner relationships.
+Added: We may not be able to integrate, operate, or improve acquired businesses effectively.
+Added: The integration and operation of an acquired business may be difficult and may impose significant demands on management and our administrative and financial resources.
+Added: Integration risks include, among others, implementing consistent operating standards;
+Added: consolidating systems, procedures, and vendors;
+Added: integrating management and personnel;
+Added: retaining key employees;
+Added: maintaining employee morale;
+Added: adapting marketing strategies to local markets;
+Added: and establishing or enhancing financial reporting systems and internal control over financial reporting.
+Added: These challenges may be more pronounced if we acquire or invest in businesses outside the restaurant industry, given our management team’s limited operational experience in those markets.
+Added: If we are unable to successfully integrate or operate acquired restaurants, our business, results of operations, and cash flows could be materially adversely affected.
+Added: Acquisitions may expose us to unknown liabilities, impairment charges, and other unanticipated consequences.
+Added: Acquired businesses may have liabilities that are not identified during due diligence, including employment, tax, food safety, lease, insurance, vendor, litigation, or regulatory matters.
+Added: Acquired assets, including goodwill, tradenames, other intangibles, and long-lived assets, may be subject to impairment if performance does not meet expectations or market conditions deteriorate.
+Added: Acquisitions outside our traditional restaurant operations may expose us to additional or different risks, including industry‑specific regulatory regimes, contractual obligations, or operational liabilities that are more difficult to identify or quantify.
+Added: In addition, acquisitions may disrupt our existing operations and divert management attention, particularly in the periods immediately following a transaction.
+Added: Our growth strategy may require additional capital that may not be available on acceptable terms, or at all, and rising interest rates could increase our borrowing costs.
+Added: Our ability to pursue acquisitions and growth initiatives depends in part on our access to capital.
+Added: Market conditions, our operating performance, our stock price, and other factors may limit our ability to raise funds when needed, on acceptable terms, or at all.
+Added: If we raise capital through equity or convertible securities, existing stockholders may experience dilution, and new securities may have rights senior to our common stock.
+Added: If we incur debt, we may be subject to restrictive covenants, collateral requirements, and increased debt service obligations, which could limit financial flexibility and adversely affect our results of operations.
+Added: Higher interest rates may increase borrowing costs and reduce the availability of financing for acquisitions or other corporate purposes.
+Added: Non‑restaurant acquisitions or strategic transactions may require additional or different forms of financing and could increase our capital needs and financial risk.
+Added: Our growth strategy may divert management’s attention from our existing operations .
+Added: Pursuing acquisitions, restaurant openings, and expansion requires significant management time and resources and could reduce attention available for operating and improving our existing restaurants.
+Added: Any resulting decline in operational focus could adversely affect sales, margins, service quality, employee retention, and overall operating performance.
+Added: Long-term leases and real estate commitments may create fixed obligations that could adversely affect our financial performance.
+Added: Certain acquired restaurants may be subject to long-term, non-cancellable leases and other contractual obligations that require us to pay rent, common area charges, taxes, insurance, maintenance, and other occupancy costs regardless of the restaurant’s performance.
+Added: If we close or underperform in leased locations, we may remain obligated under the lease and may incur additional costs to exit, assign, or sublease.
+Added: Lease renewals may also result in higher occupancy costs or the loss of desirable locations, any of which could materially adversely affect our financial condition and results of operations.
+Added: While this risk is most pronounced in restaurant operations, other acquired businesses may also involve fixed contractual or capital commitments that reduce financial flexibility.
+Added: If we grow rapidly, we may not be able to manage that growth effectively.
+Added: Significant growth could strain our managerial, administrative, operational, and financial resources.
+Added: To manage growth effectively, we must enhance operational and financial controls, improve information systems and reporting capabilities, and hire, train, and retain qualified personnel.
+Added: Growth through acquisitions or strategic transactions outside the restaurant industry may increase these challenges due to differing business models, systems, or regulatory requirements.
+Added: If we are unable to do so, our business could be harmed, and we may be unable to execute our strategy effectively.
+Added: We rely on key executives to operate our business.
+Added: We rely on Gary Copperud, our Chief Executive Officer, and Kenneth Brimmer, our Chief Operating Officer and Chief Financial Officer, to make key decisions relating to our operations and finances.
+Added: The loss of either executive could adversely affect our business.
+Added: In addition, neither individual devotes full-time efforts to the Company, as described under “Management.” Our reliance on a limited management team may be further heightened as we evaluate and pursue growth opportunities outside our traditional areas of operation.
+Added: Our evaluation of growth opportunities outside the restaurant industry may expose us to additional risks and uncertainties that could adversely affect our business.
+Added: In addition to growth within the restaurant and food service sector, management is evaluating strategic transactions and other growth opportunities that may involve businesses outside our historical areas of operation.
+Added: Pursuing opportunities in new industries involves risks and uncertainties that may be difficult to identify or evaluate in advance, including our limited experience operating non-restaurant businesses, challenges in assessing industry-specific risks, unanticipated regulatory or compliance requirements, and difficulties integrating new operations into our existing management structure.
+Added: These efforts may also divert management time and resources, increase professional fees and transaction costs, and create operational distractions, whether or not the transaction is ultimately completed.
+Added: There can be no assurance that any such opportunity will be successfully identified, consummated, or managed, or that any anticipated benefits will be realized.
+Added: If we are unable to evaluate, integrate, or operate businesses outside the restaurant industry effectively, our results of operations, cash flows, and financial condition could be materially adversely affected.
+Added: Risks Related to Operating in the Restaurant Industry
+Added: We face intense competition, and our inability to compete effectively could adversely affect sales and margins.
+Added: The restaurant industry is highly competitive across price, service, location, and quality.
+Added: Many competitors have greater financial, marketing, and operational resources and stronger brand recognition than we do.
+Added: Increased competition, including from delivery-focused restaurants, supermarkets and prepared meals, meal kits, and other at-home dining alternatives, could reduce traffic and profitability.
+Added: Competitive discounting may further pressure margins.
+Added: Cost increases could adversely affect our operating margins and financial performance.
+Added: We are exposed to increases in food and beverage costs, paper and packaging, labor, utilities, insurance, maintenance, rent, and other operating expenses.
+Added: Inflation, supply chain disruptions, adverse weather, public health matters, and other factors beyond our control may increase costs.
+Added: Our ability to offset cost increases through menu price increases or operational initiatives may be limited by competitive conditions and customer price sensitivity.
+Added: If we cannot offset cost increases, our margins and results of operations could be adversely affected.
+Added: Labor shortages, wage inflation, and changes in employment laws could increase costs and disrupt operations.
+Added: Our business is labor-intensive and depends on our ability to hire, train, and retain sufficient qualified employees.
+Added: Labor shortages, higher turnover, or an inability to staff restaurants adequately could adversely affect service levels and operating efficiency.
+Added: In addition, changes in minimum wage, overtime, paid leave, scheduling, healthcare, and other employment laws could increase labor costs and compliance burdens.
+Added: If we are unable to effectively manage these labor-related challenges, our profitability and ability to operate efficiently could be materially adversely affected.
+Added: Food safety incidents or perceived food safety issues could harm our brand and the results of our operations.
+Added: Any foodborne illness, contamination, tampering, or other food safety incident involving our restaurants or suppliers, or involving the broader restaurant industry, could harm our reputation, reduce demand for our products, result in temporary closures, and lead to litigation, regulatory actions, and increased costs.
+Added: Any such event could materially reduce customer traffic, increase our costs, and negatively affect our financial performance.
+Added: Unfavorable publicity, including through social media, could harm our brands and reduce customer traffic.
+Added: Negative publicity, including online reviews regarding food quality, customer experience, inspections, employee matters, or other issues—whether or not accurate—could harm our reputation and reduce sales.
+Added: Social media can amplify these risks and lead to rapid, widespread dissemination of adverse information.
+Added: Loss of customer trust and reduced traffic may significantly affect our sales, profitability, brand image, and future growth.
+Added: Risks Related to Health Emergencies
+Added: Health emergencies, including the resurgence of COVID-19 variants or other outbreaks, could reduce customer traffic, disrupt staffing, increase commodity costs, and cause supply disruptions, resulting in temporary closures or other operational constraints.
+Added: If any such health emergency occurs, it could materially adversely affect our revenues, operating margins, and overall financial condition.
+Added: Risks Related to Information Technology, Cybersecurity, and Data Privacy
+Added: Technological disruptions or failures could interrupt operations and adversely affect our business.
+Added: We rely on technology systems, including point-of-sale systems and other systems operated and supported by third-party vendors.
+Added: System failures, telecommunications disruptions, or service provider outages could disrupt operations, degrade customer experience, and incur costs or liabilities.
+Added: Any prolonged or significant disruption could impair our ability to operate our restaurants efficiently and could materially adversely affect our results of operations.
+Added: Cybersecurity incidents could result in operational disruption, reputational harm, and liability .
+Added: Although we rely on third-party providers for payment processing and certain employee-related systems and we generally do not store customer payment card information, cybersecurity incidents affecting our vendors or us could result in unauthorized access to data, system disruptions, reputational harm, regulatory investigations, litigation, and remediation costs.
+Added: Cybersecurity threats continue to evolve, and our controls may not prevent all incidents.
+Added: Any such incident could result in significant costs, operational disruption, and reputational damage, materially adversely affecting our business and financial results.
+Added: Failure to manage social media effectively could harm our reputation and the results of our operations .
+Added: Information on social media may be inaccurate or adverse to our interests and can spread quickly.
+Added: In addition, ineffective or inappropriate use of social media by us, our customers, or employees could lead to reputational harm, litigation, increased costs, or reduced customer traffic.
+Added: If these risks materialize, they could negatively affect customer perception, reduce traffic to our restaurants, and materially affect our revenues.
Legal and Regulatory Risks
−Removed: The display of nutritional information could affect consumer preferences and negatively impact the results of our operations.
−Removed: Government regulation and changes in consumer eating habits resulting from shifting attitudes regarding diet and health or the latest information regarding changes in the health effects of consuming our menu offerings may impact our business.
−Removed: In general, because of our size, we have been exempted from regulations related to disclosing nutritional information.
−Removed: However, as we grow, parts of our business will likely be required to comply with state and local regulations relating to the disclosure of ingredients and nutritional information.
−Removed: We anticipate that laws and regulations requiring disclosure of our menu’s ingredients and nutritional content will continue to increase.
−Removed: We cannot guarantee our ability to effectively respond to changes in consumer health perceptions, successfully implement the nutrient content disclosure requirements, or adapt our menu offerings.
−Removed: The imposition of menu-labeling laws could adversely affect our results of operations and financial position and the restaurant industry in general.
−Removed: New information or attitudes regarding diet and health could result in changes in regulations and consumer eating habits that could adversely affect our revenues.
−Removed: Regulations and consumer preferences may change because of new information or attitudes regarding diet and health.
−Removed: These changes may include regulations impacting menu item ingredients and nutritional content.
−Removed: For example, many states, counties, and cities have enacted menu-labeling laws requiring multi-unit restaurant operators to make nutritional information available to guests or restrict the sale of certain ingredients in restaurants.
−Removed: The success of our restaurant operations is dependent, in part, upon our ability to respond effectively to changes in consumer health and disclosure regulations and to adapt our menu offerings to trends in eating habits.
−Removed: If consumer health regulations or consumer eating habits change significantly, we may be required to modify or delete specific menu items.
−Removed: If we cannot adjust our menu offerings appropriately, regulations may adversely impact customer demand and our revenues.
−Removed: We are subject to many federal, state, and local laws and compliance is costly and complex.
−Removed: The restaurant industry is subject to extensive federal, state, and local laws and regulations, including those relating to the preparation and sale of food, licensing and regulation by state and local authorities relating to health, sanitation, safety, and fire standards.
−Removed: Our relationships with employees (including the Fair Labor Standards Act of 1938, the Immigration Reform and Control Act of 1986, and applicable requirements concerning the minimum wage, overtime, family leave, working conditions, safety standards, immigration status, unemployment tax rates, workers’ compensation rates and state and local payroll taxes) and federal and state laws which prohibit discrimination.
−Removed: Our ability to respond to labor cost increases by raising menu prices will depend on the responses of our competitors and customers.
−Removed: Higher wage costs, benefit standards, and compliance costs could also affect our distributors and suppliers, resulting in higher costs.
−Removed: We are subject to the ADA, which, among other things, requires our restaurants to meet federally mandated requirements for disabled people.
−Removed: The ADA prohibits discrimination in employment and public accommodations based on disability.
−Removed: Under the ADA, we could be required to expend funds to modify our restaurants to provide service to or make reasonable accommodations for the employment of disabled persons.
−Removed: In addition, our employment practices are subject to the requirements of the Immigration and Naturalization Service relating to citizenship and residency.
−Removed: Government regulations could also affect and change the items we procure for resale.
−Removed: The impact of current laws and regulations, the effect of future changes in laws or regulations that impose additional requirements and the consequences of litigation relating to current or future laws and regulations, or our inability to respond effectively to significant regulatory or public policy issues, could increase our compliance and other costs of doing business and, therefore, hurt our results of operations.
−Removed: Failure to comply with the laws and regulatory requirements of federal, state, and local authorities could result in, among other things, revocation of required licenses, administrative enforcement actions, fines, and civil and criminal liability.
−Removed: In addition, certain laws, including the ADA, could require us to expend significant funds.
−Removed: Failure to comply with regulations could result in losing our food service licenses, harming our business.
−Removed: Under various federal, state, and local government regulations, restaurants are required to obtain and maintain licenses, permits and approvals to operate their businesses.
−Removed: Such regulations are subject to change from time to time.
−Removed: We must keep these licenses, permits, and approvals for our operation.
−Removed: Typically, licenses must be renewed annually and may be revoked, suspended, or denied renewal for cause at any time if governmental authorities determine that our conduct violates applicable regulations.
−Removed: Difficulties or failures to maintain or obtain the required licenses and approvals could adversely affect our existing restaurants and delay or result in our decision to cancel the opening of new restaurants, adversely affecting our business.
−Removed: Restaurant companies have been the target of allegations of violations of employment laws.
−Removed: Our business is subject to the risk of litigation by employees, consumers, suppliers, stockholders or others through private actions, class actions, administrative proceedings, regulatory actions, or other litigation.
−Removed: The outcome of litigation, particularly class action and regulatory actions, is difficult to assess or quantify.
−Removed: In recent years, restaurant companies have been subject to lawsuits, including class action lawsuits, alleging violations of federal and state laws regarding workplace and employment matters, discrimination, and similar matters.
−Removed: A customer may file complaints or lawsuits against us alleging that we are responsible for some illness or injury they suffered at or after a visit to one of our restaurants, including actions seeking damages resulting from food-borne illness or accidents in our restaurants.
−Removed: We are also subject to various other claims from third parties arising in the ordinary course of our business, including contract claims.
−Removed: The restaurant industry has also been subject to a growing number of claims that the menus and actions of restaurant chains have led to the obesity of specific customers.
−Removed: The Company may also be subject to lawsuits from our employees, the U.S.
−Removed: Equal Employment Opportunity Commission, or others alleging violations of federal and state laws regarding workplace and employment matters, discrimination, and similar matters.
−Removed: Regardless of whether any claims against us are valid or whether we are liable, claims may be expensive to defend and may divert time and money away from our operations.
−Removed: In addition, they may generate adverse publicity, which could reduce customer traffic and sales.
−Removed: Although we maintain what we believe to be adequate levels of insurance, insurance may not be available at all or in sufficient amounts to cover any liabilities with respect to these or other matters.
−Removed: A judgment or other liability in excess of our insurance coverage for any claims or any adverse publicity resulting from claims could adversely affect our business.
−Removed: We may not be able to adequately protect our intellectual property, which could harm the value of our brands.
−Removed: Our ability to successfully implement our business plan depends on our ability to build brand recognition using our existing trademarks, service marks, and other proprietary intellectual property, as well as intellectual property that we may develop in the future.
−Removed: We have registered or applied to register a number of our trademarks.
−Removed: We cannot assure you that our trademark applications will be approved.
−Removed: Third parties may also oppose our trademark applications or otherwise challenge our use of the trademarks.
−Removed: If our trademarks are successfully challenged, we could be forced to rebrand our goods and services, which could result in a loss of brand recognition and require us to devote resources to advertising and marketing.
−Removed: If our efforts to register, maintain and protect our intellectual property are inadequate, or if any third party misappropriates, dilutes, or infringes on our intellectual property, the value of our brands may be harmed, which could have an material adverse effect on our business and might prevent our brands from achieving or maintaining market acceptance.
−Removed: We may also face the risk of claims that we have infringed third parties’ property rights.
−Removed: If third parties claim that we infringe upon their intellectual property rights, our operating profits could be adversely affected.
−Removed: Any claims of intellectual property infringement, even those without merit, could be expensive and time-consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resources or require us to enter into royalty or license agreement to obtain the right to use a third party’s intellectual property.
+Added: Litigation and regulatory proceedings could be costly and could adversely affect our business.
+Added: We may be subject to claims by employees, customers, suppliers, stockholders, and others, including wage-and-hour, discrimination, harassment, wrongful termination, premises liability, food-related claims, and other matters.
+Added: Litigation and regulatory proceedings can be costly, time-consuming, disruptive, and may result in adverse publicity.
+Added: Insurance may not be available on commercially reasonable terms or in amounts sufficient to cover all liabilities.
+Added: An adverse outcome in any such proceeding could result in significant monetary damages, operational restrictions, or reputational harm, materially adversely affecting our business and financial condition.
+Added: Regulatory changes and shifting consumer health preferences could require updates to menu disclosures and adversely affect demand.
+Added: As we grow, we may be subject to additional federal, state, or local requirements, including menu labeling and other nutritional disclosures.
+Added: New regulations or shifts in consumer preferences could require adjustments to menu items or disclosures, adversely affect demand, or increase compliance costs.
+Added: These changes could increase operating costs, reduce customer demand for certain menu offerings, and materially adversely affect our operating results.
+Added: We are subject to extensive federal, state, and local regulation, and compliance is costly and complex.
+Added: Our operations are subject to numerous laws and regulations, including those relating to food safety, sanitation, health and fire standards, alcohol service (where applicable), employment practices, wage and hour compliance, immigration verification, and accessibility requirements under the ADA.
+Added: Failure to comply could result in fines, enforcement actions, litigation, or the loss of required licenses and permits.
+Added: Any failure to comply with laws and regulations could disrupt our operations, increase costs, and materially adversely affect our business and results of operations.
+Added: Failure to maintain required licenses and permits could harm our business.
+Added: Restaurants must obtain and renew various licenses, permits, and approvals.
+Added: If we are unable to obtain or maintain required licenses or approvals, we could be required to modify operations, delay openings, or close locations.
+Added: Such outcomes could reduce revenues and profitability and materially adversely affect our financial condition.
+Added: We may not be able to adequately protect our intellectual property, which could reduce brand value.
+Added: Our business depends in part on trademarks and other intellectual property.
+Added: Third-party infringement, misappropriation, challenges to our rights, or claims that we have infringed others’ rights could be costly and adversely affect our brands and operations.
+Added: Any impairment of our intellectual property rights could diminish brand recognition and customer loyalty and materially adversely affect our business.
General Risk Factors
−Removed: Economic conditions in the United States could materially affect our business, financial condition, and results of operations.
−Removed: The restaurant industry depends on consumer discretionary spending.
−Removed: During periods of economic downturn, continuing disruptions in the overall economy, including the impacts of high unemployment and financial market volatility and unpredictability, may cause a related reduction in consumer confidence, which could negatively affect customer traffic and sales throughout our industry.
−Removed: These factors, as well as national, regional, and local regulatory and economic conditions, gasoline prices, and disposable consumer income, affect discretionary consumer spending.
−Removed: If economic conditions worsen and our customers choose to dine out less frequently or reduce the amount they spend on meals while dining out, customer traffic could be adversely impacted.
−Removed: If adverse economic conditions persist for a period of time or become pervasive, consumer changes to their discretionary spending behavior, including the frequency with which they dine out, could be more permanent.
−Removed: They will likely be affected by many national and international factors beyond our control.
−Removed: If sales decrease, our profitability could decline as we spread fixed costs across a lower level of sales.
−Removed: Prolonged negative trends in restaurant sales could cause us to, among other things, reduce the number and frequency of new restaurant openings, close restaurants, delay the remodeling of our existing restaurants, or take asset impairment charges.
−Removed: We are susceptible to regional economic developments.
−Removed: Our financial performance depends on restaurants in Minnesota, North Dakota, South Dakota, Michigan, and Florida, comprising all but one of our restaurants as of December 29, 2024.
−Removed: As a result, adverse economic conditions in any of these areas could have a material adverse effect on our overall results of operations.
−Removed: In addition, given our geographic concentrations, negative publicity regarding any of our restaurants in these areas could adversely affect our business, as could other regional occurrences such as local strikes, terrorist attacks, increases in energy prices, or natural or other disasters.
−Removed: Damage to our reputation could negatively impact our business, financial condition, and the results of operations.
−Removed: We have built our reputation on the high quality of our food, service, and staff, and we must protect and grow the value of our brands to continue to succeed.
−Removed: Any incident that erodes consumer affinity for our brands could significantly reduce their value and damage our business.
−Removed: For example, one brand’s value could suffer, and our business could be adversely affected if customers perceive a reduction in the quality of our food, service or staff, or an adverse change in our culture or ambiance, or otherwise believe we have failed to deliver a consistently positive experience.
−Removed: We may be adversely affected by news reports or other negative publicity (regardless of their accuracy) regarding food quality issues, public health concerns, illness, safety, injury or government or industry findings concerning our restaurants, restaurants operated by other food service providers, or others across the food industry supply chain.
−Removed: The risks associated with such negative publicity may materially harm our operations and damage our brand.
−Removed: Our marketing programs may not be successful.
−Removed: We intend to continue investing in marketing efforts to attract and retain customers.
−Removed: These initiatives may not be successful, resulting in expenses incurred without the benefit of higher revenues.
−Removed: If these initiatives are unsuccessful, we may engage in additional promotional activities to attract and retain customers, including buy-one-get-one offers and other offers for free or discounted food.
−Removed: Any such additional promotional activities could adversely impact the results of our operations.
−Removed: We plan to continue emphasizing mobile and other digital ordering, delivery, and pick-up orders.
−Removed: These efforts may fail or result in unexpected operational challenges that adversely impact our costs.
−Removed: We may also introduce new menu items that may not achieve the expected sales levels.
−Removed: Additionally, some of our competitors have greater financial resources, which enable them to spend significantly more on marketing and advertising than we can.
−Removed: Should our competitors increase spending on marketing and advertising, or should our advertising and promotions be less effective than our competitors, there could be a material adverse effect on our results of operations and financial condition.
+Added: Economic conditions and reduced consumer discretionary spending could adversely affect our business.
+Added: Our performance depends on consumer discretionary spending.
+Added: Economic downturns, inflation, financial market volatility, and reductions in consumer confidence may reduce restaurant traffic and sales.
+Added: If sales decline, profitability may be adversely affected, and we may take actions such as delaying remodels, closing locations, or recording impairment charges.
+Added: Sustained adverse economic conditions could materially adversely affect our revenues, margins, and cash flows.
+Added: Regional economic conditions and events could adversely affect our results due to geographic concentration.
+Added: A significant portion of our operations is concentrated in a limited number of states.
+Added: Adverse regional economic conditions, severe weather, natural disasters, or other local events could adversely affect our results of operations and financial condition.
+Added: Because of this concentration, adverse events in these regions could disproportionately impact our business and financial results.
+Added: Damage to our reputation could adversely affect our business and our results of operations.
+Added: Our success depends in part on consumer perception of our brands.
+Added: Any event that harms consumer trust or perception—including incidents involving food quality, service, safety, or employee conduct—could reduce brand value and customer traffic and materially adversely affect our business.
+Added: A sustained loss of consumer confidence could materially adversely affect our revenues and long-term growth prospects.
Our business is subject to seasonal fluctuations due to weather and other factors.
−Removed: Historically, customer spending patterns for our midwestern restaurants are lowest in the first and fourth quarters of the year due to holidays, consumer habits, and adverse weather.
−Removed: Likewise, our restaurants in Florida may experience declines in customer spending during the summer, when Florida has fewer tourists.
+Added: Historically, customer spending at our midwestern restaurants is lowest in the first and fourth quarters, driven by holidays, consumer habits, and adverse weather.
+Added: Likewise, our restaurants in Florida experience declines in customer spending during the summer, when fewer tourists visit.
Our restaurant in Woods Hole, Massachusetts, experiences reduced customer traffic outside the summer months.
Therefore, our quarterly results will continue to be affected by seasonality.
−Removed: Because of these and other factors, our financial results for any quarter may not be indicative of the results that may be achieved for a full fiscal year.
+Added: Because of these and other factors, our financial results for any quarter may not be indicative of the results achieved for a full fiscal year.
+Added: Seasonal fluctuations may cause volatility in our quarterly operating results and cash flows, complicating planning and adversely affecting our financial performance in certain periods.
If we cannot offset rising labor costs with price increases, our financial performance could be adversely affected.
Increases in hourly labor costs and minimum tip credit wages, extensions of personal and other leave policies, other governmental regulations affecting labor costs and a diminishing pool of potential staff members when the unemployment rate falls and legal immigration is restricted, especially in certain localities, could increase our labor costs and make it more difficult to fully staff our restaurants, any of which could materially adversely affect our financial performance.
−Removed: The federal government may significantly increase the federal minimum wage and tip credit wage (or eliminate the tip credit wage) and require substantially more mandated benefits than is currently required under federal law.
−Removed: In addition to increasing the overall wages paid to our minimum wage and tip credit wage earners, these increases could create pressure to increase salaries and other benefits paid to other staff members who, in recognition of their tenure, performance, job responsibilities and other similar considerations, historically received a rate of pay exceeding the applicable minimum wage or minimum tip credit wage.
−Removed: Because we employ a large workforce, any wage increase, or expansion of benefits could significantly impact our labor costs and negatively affect our operations results.
−Removed: Our vendors, contractors and business partners are similarly impacted by wage and benefit cost inflation.
−Removed: Many have increased prices for goods and services to offset their increasing labor costs.
+Added: If labor cost increases exceed our ability to adjust pricing or improve productivity, our margins and profitability could be materially adversely affected.
Failure of our internal control over financial reporting could adversely affect our business and financial results.
Our management is responsible for establishing and maintaining effective internal control over financial reporting.
−Removed: Internal control over financial reporting is a process that provides reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with GAAP.
+Added: Internal control over financial reporting is a process is designed to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with GAAP.
Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that we will prevent or detect a misstatement of our financial statements or fraud.
Any failure to maintain an effective system of internal control over financial reporting could limit our ability to report our financial results accurately and in a timely manner or to detect and prevent fraud.
−Removed: The identification of a material weakness could indicate a lack of controls adequate to generate accurate financial statements that, in turn, could cause a loss of investor confidence and a decline in the market price of our common stock.
−Removed: We cannot assure you that we will be able to remediate any material weaknesses that may be identified in future periods in a timely manner or maintain all of the controls necessary for continued compliance.
−Removed: Likewise, we cannot assure you that we will be able to retain sufficiently skilled finance and accounting personnel, especially in light of the increased demand for such personnel among publicly traded companies.
+Added: The identification of a material weakness could indicate a lack of controls adequate to produce accurate financial statements, which, in turn, could cause a loss of investor confidence and a decline in the market price of our common stock.
+Added: We cannot assure you that we will be able to remediate any material weaknesses that may be identified in future periods in a timely manner, or that we will maintain all necessary controls to maintain continued compliance.
+Added: Likewise, we cannot guarantee we will be able to retain sufficiently skilled finance and accounting personnel, particularly given the increased demand for such personnel among publicly traded companies.
+Added: Any failure to maintain effective internal controls could result in financial reporting errors, loss of investor confidence, regulatory scrutiny, and a decline in the market price of our common stock.
Risks Related to Ownership of Our Common Stock
−Removed: Our business could be negatively affected by the actions of activist stockholders.
−Removed: The Company may be subject to proposals by stockholders urging us to take certain corporate action.
−Removed: If activist stockholder activities ensue, our business could be adversely impacted because:
−Removed: responding to actions by activist stockholders can be costly and time-consuming:
−Removed: perceived uncertainties as to our future direction may result in the loss of potential business opportunities and make it challenging to attract and retain qualified personnel and business partners and
−Removed: pursuit of an activist stockholder’s agenda may adversely affect our ability to implement our strategy effectively.
−Removed: Any litigation could result in substantial costs and divert management’s attention and resources, potentially harming our business.
−Removed: You may be unable to resell your shares at or above the price you paid.
−Removed: Volatility in the market price of our common stock may prevent you from being able to sell your shares at or above the price you paid for your shares.
−Removed: The stock market, in general, has been highly volatile, which may be especially true for our common stock, given our growth strategy and stage of development.
−Removed: As a result, the market price of our common stock is likely to be similarly volatile.
−Removed: You may experience a decrease, which could be substantial in the value of your stock, including decreases unrelated to our operating performance or prospects and could lose part or all of your investment.
−Removed: The price of our common stock could be subject to wide fluctuations in response to several factors, including those described elsewhere in this Annual Report and others, such as:
+Added: Activist stockholders could adversely affect our business and results of operations.
+Added: From time to time, stockholders may propose or seek to influence corporate actions or strategic decisions.
+Added: Activist stockholder activity, whether successful or not, could be costly and time-consuming, diverting management’s attention and resources from operating our business.
+Added: In addition, activist activity may create perceived uncertainty regarding our strategy or future direction, which could adversely affect our ability to attract and retain employees, customers, suppliers, and other business partners, and could hinder our ability to execute our business plan.
+Added: Activist activity could also lead to litigation or other disputes, which may be costly and disruptive, regardless of the outcome.
+Added: These activities could distract management, increase costs, and create uncertainty that could adversely affect our business and stock price.
+Added: The market price of our common stock may be volatile, and you may lose all or part of your investment.
+Added: The trading price of our common stock may fluctuate significantly, and you may not be able to sell your shares at or above the price you paid.
+Added: The stock market has experienced, and may continue to experience, significant volatility, and our stock price may be particularly volatile due to, among other things, our operating results, strategic initiatives, merger-related developments and announcements, and general market conditions.
+Added: As a result, the market price of our common stock may decline substantially, including for reasons unrelated to our operating performance.
+Added: As a result of this volatility, investors may experience significant losses, and our ability to access capital markets could be adversely affected.
+Added: Factors that may cause our stock price to fluctuate include, among others:
actual or anticipated fluctuations in our quarterly or annual operating results;
−Removed: publication of research reports by securities analysts about us, our competitors, or our industry;
+Added: analyst reports or changes analysts’ estimates or recommendations;
our failure to meet analysts’ projections or guidance;
−Removed: additions and departures of key personnel;
−Removed: sales, or anticipated sales, our stock or shares held by significant stockholders, directors, or executive officers;
−Removed: strategic decisions such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments, or changes in business strategy;
+Added: changes in management or key personnel;
+Added: sales, or anticipated sales of shares held by significant stockholders, directors, or executive officers;
+Added: strategic transactions or investments, or changes in business strategy;
the passage of legislation or other regulatory developments affecting us or our industry;
−Removed: speculation, whether or not correct, involving us, our suppliers, or our competitors;
−Removed: changes in accounting principles;
litigation and governmental investigations;
−Removed: publicity (regardless of their accuracy), including on social media platforms, negatively impacting our reputation;
+Added: publicity (regardless of accuracy), including on social media platforms;
terrorist acts, acts of war or periods of widespread civil unrest;
−Removed: a foodborne illness outbreak;
+Added: a foodborne illness outbreak, national health emergency or a pandemic;
severe weather, natural disasters, and other calamities;
1 unchanged sentence
Our articles of incorporation, bylaws and Wyoming law may discourage a change of control of our Company and depress the price of our stock.
−Removed: Our articles of incorporation and by-laws include certain provisions that could have the effect of discouraging, delaying, or preventing a change of control of our company or changes in our management, including, among other things:
+Added: Our articles of incorporation and bylaws include certain provisions that could have the effect of discouraging, delaying, or preventing a change of control of our company or changes in our management, including, among other things:
advance notice requirements applicable to stockholders for matters to be brought before a meeting of stockholders and requirements as to the form and content of a stockholder’s notice;
2 unchanged sentences
limiting the persons that can call special meetings of our stockholders to our board of directors, the chairperson of our board of directors, the chief executive officer, or the president (in the absence of a chief executive officer).
+Added: These provisions could limit strategic alternatives and reduce the value of stockholders, and may be realized in a change‑of‑control transaction.
We have no plans to pay cash dividends on our common stock.
−Removed: We likely will retain future earnings, if any, for future operations, expansion, and debt repayment, and we have no plans to pay any cash dividends in the foreseeable future.
−Removed: Any decision to declare and pay dividends in the future will be made at the discretion of our board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions, and other factors that our board of directors may deem relevant.
−Removed: In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness our subsidiaries or we incur, including our credit facility.
+Added: We will likely retain any future earnings for operations, expansion, and debt repayment, and we have no plans to pay any cash dividends in the foreseeable future.
+Added: Any decision to declare and pay dividends in the future will be at the discretion of our board of directors and will depend, among other things, on our results of operations, financial condition, cash requirements, contractual restrictions, and other factors that our board of directors may deem relevant.
+Added: In addition, our ability to pay dividends may be limited by covenants in any existing or future indebtedness of our subsidiaries or us, including a credit facility.
As a result, you may not receive any return on an investment in our common stock for a price greater than that you paid.
+Added: As a result, investors may need to rely on stock price appreciation to achieve a return on their investment.
Raising additional equity capital may be more challenging while the warrants are outstanding.
−Removed: While the warrants issued in our IPO are outstanding, the holders of such warrants will be able to profit from a rise in the market price of our common stock.
+Added: While the warrants issued in our IPO remain outstanding, the holders of such warrants will be able to profit from an increase in the market price of our common stock.
However, we may find it more difficult to raise additional equity capital.
At the same time, the warrants are outstanding, and we may not have the capital to fund our expansion and growth plans or for other corporate purposes.
−Removed: Our board of directors is authorized to issue preferred stock without obtaining stockholder approval.
+Added: If we are unable to raise capital on acceptable terms, our ability to fund growth initiatives and operations could be materially adversely affected.
+Added: Our board has broad authority to issue preferred stock, which could adversely affect holders of our common stock and could discourage or delay a change in control.
Our articles of incorporation authorize the issuance of up to 2,000,000 shares of preferred stock with designations, rights and preferences that may be determined from time to time by the board of directors.
−Removed: Our board of directors is empowered, without stockholder approval, to create and issue a series of preferred stock with dividend, liquidation, conversion, voting, or other rights that could adversely affect the voting power or other rights of the holders of the common stock.
−Removed: In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying, or preventing a change in control.
−Removed: Although we have no present intention to issue any shares of preferred stock, there can be no assurance that we will not do so in the future.
+Added: Subject to applicable law, our certificate of incorporation and bylaws, and applicable stock exchange requirements, our board of directors has the authority to create and issue one or more series of preferred stock with dividend, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of our common stock.
+Added: In connection with the proposed business combination, we are seeking stockholder approval for the issuance of Series A-1 and Series A-2 Convertible Preferred Stock.
+Added: In addition, our board may in the future authorize the issuance of additional shares or series of preferred stock on terms that could dilute the interests of common stockholders, adversely affect the market price of our common stock, or be used, under certain circumstances, as a method of discouraging, delaying, or preventing a change in control of our company or a change in our management.
+Added: These provisions could adversely affect the voting power of holders of common stock and limit the price investors may be willing to pay for our common stock in the future.
These provisions might discourage, delay, or prevent a change in control of our company or a change in our management.
−Removed: These provisions could adversely affect the voting power of holders of common stock and limit the price that investors might be willing to pay in the future for shares of our common stock.
−Removed: Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims.
+Added: These provisions could adversely affect the voting power of holders of common stock and limit the price investors may be willing to pay for our common stock in the future.
+Added: Claims for indemnification by our directors and officers may reduce available funds to satisfy successful third-party claims.
Our articles of incorporation and bylaws provide that the Company will indemnify our directors and officers, in each case, to the fullest extent permitted by Wyoming law.
4 unchanged sentences
we are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that the individual is not entitled to indemnification;
−Removed: we will not be obligated pursuant to our bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnitees, except with respect to proceedings authorized by our board of directors or brought to enforce a right to indemnification,
+Added: we are not obligated pursuant to our bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnitees, except with respect to proceedings authorized by our board of directors or brought to enforce a right to indemnification.
The rights conferred in our bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees, and agents and to obtain insurance to indemnify such persons, and
−Removed: we may not retroactively amend our bylaw provisions to reduce our indemnification obligations to directors, officers, employees, and agents.
+Added: we may not retroactively amend our bylaws to reduce our indemnification obligations to directors, officers, employees, and agents.
Reduced disclosure requirements may make our common stock less attractive to investors.
−Removed: We are a “smaller reporting company.” Specifically, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting;
−Removed: and have certain other decreased disclosure obligations in their SEC filings.
−Removed: Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.
−Removed: We cannot predict if investors will find our common stock less attractive because we may rely on th ese exemptions.
−Removed: If some investors find our common stock less attractive, there may be a less active trading market for our common stock, and our stock price may be more volatile.
+Added: Reduced disclosure requirements applicable to us as a smaller reporting company may make our common stock less attractive to investors.
+Added: We qualify as a “smaller reporting company” under SEC rules.
+Added: As a result, we are permitted to provide scaled disclosures in our SEC filings, including reduced executive compensation disclosure, and we are exempt from the requirement under Section 404(b) of the Sarbanes-Oxley Act that our independent registered public accounting firm attests to the effectiveness of our internal control over financial reporting.
+Added: We may also be eligible to rely on other disclosure accommodations available to smaller reporting companies and, if applicable, emerging growth companies.
+Added: If we use these accommodations, investors may find our common stock less attractive because they may receive less information than they would from companies that do not qualify for, or elect not to use, scaled disclosure.
+Added: Any such perception could reduce trading volume, increase price volatility, and adversely affect the market price of our common stock.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.