What changed in this filing

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Item 1. Financial Statements

2022-05-06 compared with 2022-02-04 · 63 added, 68 removed, 358 unchanged (27% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

December 26 ,

December 27 ,

December 26 ,

December 27 ,

Nine Months Ended

COSTS AND EXPENSES:

2 unchanged sentences

Franchise expenses

Gain on sale of assets

Impairment of long-lived assets and other lease charges

Bad debt expense

Bad debt expense (recovery)

Interest expense

9 unchanged sentences

RAVE RESTAURANT GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED

(In thousands , except share amounts)

December 26 ,

CURRENT ASSETS

42 unchanged sentences

RAVE RESTAURANT GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS'

(In thousands)

6 unchanged sentences

Balance, December 27, 2020

Stock compensation expense

Equity issue costs - ATM offering

Balance, March 28 , 2021

Treasury Stock

4 unchanged sentences

Balance, December 26, 2021

Stock compensation expense

Balance, March 27 , 2022

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

RAVE RESTAURANT GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

CONDENSED CONSOLIDATED STATEMENTS OF

(In thousands )

Six Months Ended

December 26 ,

December 27 ,

Nine Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net income to cash used in operating activities:

Adjustments to reconcile net income to cash provided by/(used in) operating activities:

Impairment of long-lived assets and other lease charges

4 unchanged sentences

Amortization of debt issue costs

Gain on the sale of assets

Provision for bad debt

Changes in operating assets and liabilities:

Restricted cash

Accounts receivable

8 unchanged sentences

Deferred revenue

Other long-term liabilities

Cash provided by/(used in) operating activities

7 unchanged sentences

Equity issuance costs - ATM offering

Payment of Convertible Notes

Short term loan, current

Cash (used in)/provided by financing activities

Net (decrease)/increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

Cash, cash equivalents and restricted cash, end of period

Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents and restricted cash

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

11 unchanged sentences

The accompanying condensed consolidated financial statements of Rave Restaurant Group, Inc.

have been prepared without audit pursuant

to the rules and regulations of the Securities and Exchange Commission (“SEC”).

have been prepared without audit pursuant to

the rules and regulations of the Securities and Exchange Commission (“SEC”).

Certain information and footnote disclosures normally included in the financial statements have been omitted pursuant to such rules and regulations.

14 unchanged sentences

Fiscal Quarters

The three and six month periods ended December 26, 2021 and December 27, 2020 each contained 13 weeks and 26 weeks, respectively.

The three and nine month periods ended March 27, 2022 and March 28, 2021 each contained 13 weeks and 39 weeks, respectively.

Use of Management Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the

Company’s management to make estimates and assumptions that affect its reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent liabilities.

The Company bases its estimates on historical experience and

other various assumptions that it believes are reasonable under the circumstances.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the Company’s

management to make estimates and assumptions that affect its reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent liabilities.

The Company bases its estimates on historical experience and other

various assumptions that it believes are reasonable under the circumstances.

Estimates and assumptions are reviewed periodically, and actual results could differ materially from estimates.

21 unchanged sentences

The adoption of Topic 606 revised the determination of whether these arrangements are considered principal versus agent.

For Pie Five, we have determined that we are the principal

in these arrangements, and advertising fund contributions and expenditures are, therefore, reported on a gross basis in the Condensed Consolidated Statements of Income.

In general, we expect such advertising fund contributions and

expenditures to be largely offsetting and, therefore, do not expect a significant impact on our reported income before income taxes.

For Pie Five, we have determined that we are the principal in

these arrangements, and advertising fund contributions and expenditures are, therefore, reported on a gross basis in the Condensed Consolidated Statements of Income.

In general, we expect such advertising fund contributions and expenditures to

be largely offsetting and, therefore, do not expect a significant impact on our reported income before income taxes.

Our obligation related to these funds is to develop and conduct advertising activities.

Pie Five marketing

fund contributions are billed and collected weekly.

Pie Five marketing fund contributions

are billed and collected weekly.

Supplier convention funds are deferred until the obligations of the agreement are met and the event takes place.

2 unchanged sentences

The Company’s two subleases have terms that end in 2023 and 2025.

The sublease agreements are noncancelable through the end of the term and both parties have substantive rights to terminate the

lease when the term is complete.

The sublease agreements are noncancelable through the end of the term and both parties have substantive rights to terminate the lease

when the term is complete.

Sublease agreements are not capitalized and the amounts the Company receives are recorded as rental income in the period that rent is received.

6 unchanged sentences

Advertising funds

Supplier convention funds

Rental income

Six Months Ended

Nine Months Ended

Franchise royalties

7 unchanged sentences

The Company accounts for stock options using the fair value recognition provisions of the authoritative guidance on share-based payments.

The Company uses the Black-Scholes formula to estimate the value of stock-based compensation for options granted to employees and directors and expects to continue to use this acceptable option valuation model in the future.

Company uses the Black-Scholes formula to estimate the value of stock-based compensation for options granted to employees and directors and expects to continue to use this acceptable option valuation model in the future.

The authoritative

28 unchanged sentences

Restaurant Space Agreements

As of December 26, 2021, the Company had no

As of March 27, 2022, the Company had no

Company-owned restaurants.

2 unchanged sentences

The Company has

concluded that its restaurant agreements represent operating leases with a lease term that equals the primary non-cancelable contract term.

Upon completion of the primary term, both parties have substantive rights to terminate the lease.

result, enforceable rights and obligations do not exist under the rental agreements subsequent to the primary term.

concluded that its restaurant space agreements represent operating leases with a lease term that equals the primary non-cancelable contract term.

Upon completion of the primary term, both parties have substantive rights to terminate the

As a result, enforceable rights and obligations do not exist under the rental agreements subsequent to the primary term.

The Company also subleases some of its restaurant space to third parties.

20 unchanged sentences

remainder of the term.

If the Company does not expect to assign the abandoned lease to a new franchisee within 12 months, the lease will be considered an operating lease and a right-of-use asset and liability will be recognized.

If the Company does not expect to assign the abandoned lease to a new franchisee within 12 months, the lease will then be considered an operating lease and a right-of-use asset and liability will be recognized.

Practical Expedients and Accounting Policy Elections

9 unchanged sentences

variable lease payments, the Company recognizes those payments in the accompanying condensed consolidated statement of income in the period in which the obligation for those payments is incurred.

The components of total lease expense for the six months ended December 26, 2021, t he

The components of total lease expense for the nine months ended March 27, 2022, t he

majority of which is included in general and administrative expense, are as follows (in thousands):

Six Months Ended

December 26, 2021

Nine Months Ended

March 27, 2022

Operating lease cost

2 unchanged sentences

Supplemental cash flow information related to operating leases is included in the table below (in thousands):

Six Months Ended

December 26, 2021

Nine Months Ended

March 27, 2022

Cash paid for amounts included in the measurement of lease liabilities

Weighted average remaining lease term and weighted average discount rate for operating leases are as follows:

December 26, 2021

March 27, 2022

Weighted average remaining lease term

15 unchanged sentences

The 2007 Stock Purchase Plan does not have an expiration date.

There were no stock purchases in the fiscal quarters ended December 26, 2021 or December 27, 2020.

There were no stock purchases in the fiscal quarters ended March 27, 2022 or March 28, 2021.

Note D - Commitments and Contingencies

5 unchanged sentences

Stock Options:

For the fiscal quarters ended December 26, 2021 and December 27, 2020, the Company did no t recognize any stock-based compensation expense related to stock options.

As of December 26, 2021, there was no unamortized stock-based compensation expense related to stock options.

For the fiscal quarters ended March 27, 2022 and March 28, 2021, the Company did no t recognize any stock-based compensation expense related to stock options.

As of March 27, 2022, there was no unamortized stock-based compensation expense related to stock options.

The following table summarizes the number of shares of the Company’s common stock subject to outstanding stock options:

Six Months Ended

Nine Months Ended

Outstanding at beginning of year

3 unchanged sentences

Restricted Stock Units:

For the three months ended December 26, 2021 and December 27, 2020, the Company had stock-based compensation expense of $ 43 thousand and zero ,

For the three months ended March 27, 2022 and March 28, 2021, the Company had stock-based compensation expense of $ 42 thousand and $ 39 thousand,

respectively, related to RSUs.

As of December 26, 2021, there was no unamortized stock-based compensation expense related to

A summary of the status of restricted stock units as of December 26, 2021, and changes during the six months then ended is presented

As of March 27, 2022, there was no unamortized stock-based compensation expense related to RSUs.

A summary of the status of restricted stock units as of March 27, 2022, and changes during the nine months then ended is presented below:

Unvested at June 27 , 2021

Unvested at December 26 ,

Unvested at March 27 , 2022

Note F - Earnings per Share (EPS)

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Net income available to common stockholders

6 unchanged sentences

Net income per common share

For the three and six months ended December 26, 2021, options to purchase 166,750 shares of common stock at exercise prices from $ 3.11

For the three and nine months ended March 27, 2022, options to purchase 166,750 shares of common stock at exercise prices from $ 3.11

to $ 13.11 were excluded from the computation of diluted EPS because their inclusion would have been anti-dilutive.

For the three and six months ended December 27, 2020, options to purchase 206,750

shares of common stock at exercise prices ranging from $ 2.71 to $ 13.11 were excluded from the computation of diluted EPS because their inclusion would have been anti-dilutive.

For the three and nine months ended March 28, 2021, options to purchase 206,750 shares of common stock at exercise prices ranging from $ 2.71 to $ 13.11 were excluded from the computation of diluted EPS because their inclusion would have been anti-dilutive.

Note G - Income Taxes

For the three and six months ended December 26, 2021, the Company recorded an income tax expense of $ 4 thousand and $ 7 thousand,

For the three and nine months ended March 27, 2022, the Company recorded an income tax expense of $ 3 thousand and $ 10 thousand,

respectively, all of which is attributable to current state taxes.

The Company utilized net operating losses to offset federal taxes.

The Company utilized net operating losses to offset federal income taxes.

The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable

3 unchanged sentences

Future sources of taxable income are also considered in determining the amount of the recorded valuation allowance.

As of December 26, 2021, the Company had established a full valuation allowance of $ 6.2 million against its deferred tax assets.

As of March 27, 2022, the Company had established a full valuation allowance of $ 6.1 million against its deferred tax assets.

The Company will continue to review the need for an adjustment to the valuation allowance.

21 unchanged sentences

Summarized in the following table are net sales and operating revenues, depreciation and amortization expense, and income before taxes,

for the Company’s reportable segments as of the three months and six months ended December 26, 2021 and December 27, 2020 (in thousands):

for the Company’s reportable segments as of the three months and nine months ended March 27, 2022 and March 28, 2021 (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

Net sales and operating revenues:

18 unchanged sentences

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.

What changed 10-Q

Item 1. Financial Statements