What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-05-06 · 173 added, 170 removed, 251 unchanged (58% of the section changed)

1 unchanged sentence

RAVE RESTAURANT GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands , except per share amounts)

Three Months Ended

Nine Months Ended

September 25 ,

September 26 ,

COSTS AND EXPENSES:

Cost of sales

General and administrative expenses

Franchise expenses

Gain on sale of assets

Impairment of long-lived assets and other lease charges

Bad debt expense (recovery)

Bad debt expense

Interest expense

11 unchanged sentences

(In thousands , except share amounts)

September 25 ,

CURRENT ASSETS

11 unchanged sentences

Notes receivable, net of current portion

Deferred tax asset, net

Deferred contract charges, net of current portion

6 unchanged sentences

Short term loan, current

Convertible notes short term, net of unamortized debt issuance costs and discounts

Deferred revenues, current

12 unchanged sentences

Additional paid-in capital

Accumulated deficit

Retained earnings

Treasury stock at cost

5 unchanged sentences

RAVE RESTAURANT GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS'

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands )

1 unchanged sentence

Balance, June 27, 2021

Equity issue costs - ATM offering

Stock-based compensation expense

Balance, September 26, 2021

Issuance of Common Stock

Equity issue costs - ATM offering

Balance, December 27, 2020

Stock compensation expense

Equity issue costs - ATM offering

Balance, March 28 , 2021

Treasury Stock

Balance, June 26, 2022

Stock compensation expense

Stock-based compensation expense

Purchase of Treasury Stock

Balance, September 25, 2022

Stock compensation expense

Balance, December 26, 2021

Stock compensation expense

Balance, March 27 , 2022

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands )

Nine Months Ended

Three Months Ended

September 25 ,

September 26 ,

CASH FLOWS FROM OPERATING ACTIVITIES:

1 unchanged sentence

Impairment of long-lived assets and other lease charges

Stock compensation expense

Stock-based compensation expense

Depreciation and amortization

2 unchanged sentences

Amortization of debt issue costs

Gain on the sale of assets

Provision for bad debt

Allowance for bad debts

Changes in operating assets and liabilities:

3 unchanged sentences

Prepaid expenses and other

Deposits and other

Accounts payable - trade

Accounts payable - lease termination impairments

Accrued expenses

Operating lease liability

Deferred revenue

Other long-term liabilities

Deferred revenues

Cash provided by/(used in) operating activities

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Purchase of property, plant and equipment

Cash provided by investing activities

Cash (used in)/provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from sale of stock

Equity issuance costs - ATM offering

Payment of Convertible Notes

Purchase of stock

Short term loan, current

Cash (used in)/provided by financing activities

Cash (used in) financing activities

Net (decrease)/increase in cash and cash equivalents

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CASH PAID FOR:

Non-cash activities:

Conversion of notes to common shares

Operating lease right of use assets at adoption

Operating lease liability at adoption

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

Rave Restaurant Group, Inc., through its subsidiaries (collectively, the “Company” or “we,” “us” or “our”), franchises pizza buffet (“Buffet

Units”), delivery/carry-out (“Delco Units”) and express (“Express Units”) restaurants under the trademark “Pizza Inn” and franchises fast casual pizza restaurants (“Pie Five Units”) under the trademarks “Pie Five Pizza Company” or “Pie Five”.

Units”), delivery/carry-out (“Delco Units”) and express (“Express Units”) restaurants under the trademark “Pizza Inn” and franchises fast casual pizza

restaurants (“Pie Five Units”) under the trademarks “Pie Five Pizza Company” or “Pie Five”.

The Company also licenses Pizza Inn Express, or PIE, kiosks (“PIE Units”) under the trademark “Pizza Inn”.

We facilitate food, equipment and supply

distribution to our domestic and international system of restaurants through agreements with third party distributors.

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”).

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

The unaudited

condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 27,

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

The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the

fiscal year ended June 26, 2022.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the

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Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned.

All appropriate intercompany

balances and transactions have been eliminated.

The consolidated financial statements include the accounts of Rave Restaurant Group, Inc.

and its subsidiaries, all of which are wholly owned.

All appropriate

inter-company balances and transactions have been eliminated.

Cash and Cash Equivalents

1 unchanged sentence

Fiscal Quarters

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

The three month periods ended September 25, 2022 and September 26, 2021 each contained 13 weeks.

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

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

1 unchanged sentence

various assumptions that it believes are reasonable under the circumstances.

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

Estimates and assumptions are reviewed periodically.

Actual results could differ materially from estimates.

Revenue Recognition

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Franchise license fees are typically billed upon execution of the franchise agreement and amortized over the term of the franchise agreement

which can range from five to 20

which can range from five to 20 years .

Fees received for renewal periods are amortized over the life of the renewal period.

1 unchanged sentence

master license agreements.

Area development exclusivity fees are included in deferred revenue in the Condensed Consolidated Balance Sheets and allocated on a pro rata basis to all stores opened under that specific development agreement.

development exclusivity fees that include rights to subfranchise are amortized as revenue over the term of the contract.

Advertising fund contributions for Pie Five units represent contributions collected where we have control over the activities of the fund.

Area development exclusivity fees are included in deferred revenue in the accompanying Condensed Consolidated Balance Sheets and allocated on a pro rata basis to all stores opened under that specific development

Area development exclusivity fees that include rights to sub-franchise are amortized as revenue over the term of the contract.

Advertising fund contributions for Pie Five and Pizza Inn units represent contributions collected where we have control over the activities

Contributions are based on a percentage of net retail sales.

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.

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.

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

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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.

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

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 are recorded as rental income in the period that rent is received.

Total revenues consist of the following (in thousands):

Three Months Ended

Franchise royalties

Supplier and distributor incentive revenues

Franchise license fees

Area development fees and foreign master license fees

Advertising funds

Rental income

Nine Months Ended

September 25,

September 26,

Franchise royalties

1 unchanged sentence

Franchise license fees

Area development fees and foreign master license fees

Advertising funds

Area development exclusivity fees and foreign master license fees

Advertising funds contributions

Supplier convention funds

2 unchanged sentences

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

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 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

guidance also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow.

Compensation cost for restricted stock units (“RSUs”) is measured as an amount equal to the fair value of the RSU’s on the date of grant and

is expensed over the vesting period if achievement of the performance criteria is deemed probable, with the amount of the expense recognized based on the best estimate of the ultimate achievement level.

stock units (“RSUs”) represent the right to receive shares of common stock upon the satisfaction of vesting requirements, performance criteria and other terms and conditions.

Compensation cost for RSUs is measured as an amount equal to the

fair value of the RSUs on the date of grant and is expensed over the vesting period if achievement of the performance criteria is deemed probable, with the amount of the expense recognized based on the best estimate of the ultimate

achievement level.

Note B - Leases

The Company determines if an arrangement is a lease at inception of the arrangement.

To the extent that it can be determined that an

arrangement represents a lease, it is classified as either an operating lease or a finance lease.

The Company does not currently have any finance leases.

The Company capitalizes operating leases on the Condensed Consolidated Balance Sheets

through a right of use asset and a corresponding operating lease liability.

Right of use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to

make lease payments arising from the lease.

Short-term leases that have an initial term of one year or less are not capitalized but are disclosed below.

Operating lease right of use assets and liabilities are recognized at the commencement date of an arrangement based on the present value of

lease payments over the lease term.

In addition to the present value of lease payments, the operating lease right of use asset also includes any lease payments made to the lessor prior to lease commencement less any lease incentives and

initial direct costs incurred.

Lease expense is recognized on a straight-line basis over the lease term.

The Company determines if an

arrangement is a lease at inception of the arrangement.

To the extent that it can be determined that an arrangement represents a lease, it is classified as either an operating lease or a finance lease.

The Company does not currently have

any finance leases.

The Company capitalizes operating leases on the Condensed Consolidated Balance Sheets through a right of use asset and a corresponding lease liability.

Right of use assets represent the Company’s right to use an

underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

Short-term leases that have an initial term of one year or less are not capitalized.

does not presently have any short-term leases.

Operating lease right of use assets

and liabilities are recognized at the commencement date of an arrangement based on the present value of lease payments over the lease term.

In addition to the present value of lease payments, the operating lease right of use asset also

includes any lease payments made to the lessor prior to lease commencement less any lease incentives and initial direct costs incurred.

Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

Nature of Leases

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terms of one to ten years .

The Company has concluded that its office agreement represents an operating lease 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 Company has concluded that its office 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 agreement subsequent to the primary term.

Restaurant Space Agreements

As of March 27, 2022, the Company had no

Company-owned restaurants.

Historically, the Company has rented restaurant space from third parties for its Company-owned restaurants.

Restaurant space agreements are typically structured with non-cancelable terms of one to ten years .

The Company has

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

The Company rents restaurant space from third parties for its Company-owned restaurants.

Restaurant space agreements are typically

structured with non-cancelable terms of one to 10 years .

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.

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.

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

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

1 unchanged sentence

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.

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

As of September 25,

2022 , the Company had no Company-owned

Information Technology Equipment

3 unchanged sentences

Discount Rate

Leases typically do not provide an implicit rate.

Accordingly, the Company is required to use its incremental borrowing rate in determining

the present value of lease payments based on the information available at commencement date.

The Company’s incremental borrowing rate reflects the estimated rate of interest that it would pay to borrow on a collateralized basis over a similar

term an amount equal to the lease payments in a similar economic environment.

Leases typically do not provide an implicit interest rate.

Accordingly, the Company is required to use its incremental borrowing rate in

determining the present value of lease payments based on the information available at the lease commencement date.

The Company’s incremental borrowing rate reflects the estimated rate of interest that it would pay to borrow on a

collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment.

The Company uses the implicit rate in the limited circumstances in which that rate is readily determinable.

5 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 then 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 be considered an operating lease and a right of use asset and lease liability will be recognized.

Practical Expedients and Accounting Policy Elections

3 unchanged sentences

Accordingly, the Company accounts for the lease and non-lease components in an arrangement as a single lease component.

In addition, for all existing asset classes, the Company has made an accounting policy election not to apply the lease recognition requirements

to short-term leases (that is, a lease that, at commencement, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the Company is reasonably certain to exercise).

Accordingly, the

Company recognizes lease payments related to short-term leases in the condensed consolidated statement of income on a straight-line basis over the lease term which has not changed from prior recognition.

To the extent that there are

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 nine months ended March 27, 2022, t he

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

Nine Months Ended

March 27, 2022

In addition, for all existing asset classes, the Company

has made an accounting policy election not to apply the lease recognition requirements to short-term leases (that is, leases that, at commencement, have a lease term of 12 months or less and do not include an option to purchase the

underlying asset that the Company is reasonably certain to exercise).

Accordingly, we recognize lease payments related to short-term leases in our income statements on a straight-line basis over the lease term.

To the extent that there

are variable lease payments, we recognize those payments in our income statements in the period in which the obligation for those payments is incurred.

The components of total lease expense for the three months ended September 25, 2022, the majority of which is included in general and administrative expense in the accompanying Condensed Consolidated Statements of

Income, are as follows (in thousands):

Three Months Ended

September 25, 2022

Operating lease cost

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

Nine Months Ended

March 27, 2022

Three Months Ended

September 25, 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:

March 27, 2022

September 25, 2022

Weighted average remaining lease term

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Operating Leases

Remainder of fiscal year 2022

Total operating lease payments

3 unchanged sentences

On May 23, 2007, the Company’s board of directors approved a stock purchase plan (the “2007 Stock Purchase Plan”) authorizing the purchase

of up to 1,016,000 shares of its common stock in the open market or in privately negotiated transactions.

On June 2, 2008, the

Company’s board of directors amended the 2007 Stock Purchase Plan to increase the number of shares of common stock the Company may repurchase by 1,000,000

on our behalf of up to 1,016,000 shares of our common stock in the open market or in privately negotiated transactions.

2, 2008, the Company’s board of directors amended the 2007 Stock Purchase Plan to increase the number of shares of common stock the Company may repurchase by 1,000,000 shares to a total of 2,016,000 shares.

On April 22, 2009, the Company’s board of

directors amended the 2007 Stock Purchase Plan again to increase the number of shares of common stock the Company may repurchase by 1,000,000

shares to a total of 3,016,000 shares.

On April 22, 2009, the Company’s board of directors amended the 2007 Stock Purchase Plan

On June 28, 2022, the Company’s board of directors amended the 2007 Stock Purchase Plan

again to increase the number of shares of common stock the Company may repurchase by 5,000,000 shares to a total of 8,016,000 shares.

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

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

The following table furnishes

information for purchases made pursuant to the 2007 Stock Purchase Plan during the first quarter of fiscal 2023:

Average Price

Paid Per Share

Total Number of

Shares Purchased

as Part of Publicly

Announced Plan

Maximum Number

of Shares that May

Yet Be Purchased

Under the Plan

July 27, 2022 - July 31, 2022

August 1, 2022 - August 28, 2022

August 29, 2022 - September 25, 2022

The Company’s

ability to purchase shares of our common stock is subject to various laws, regulations and policies as well as the rules and regulations of the Securities and Exchange Commission (the “SEC”).

The Company may also purchase shares of our

common stock other than pursuant to the 2007 Stock Purchase Plan or other publicly announced plans or programs.

Note D - Commitments and Contingencies

5 unchanged sentences

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.

For the fiscal quarters ended September 25, 2022 and September 26, 2021, the Company recognized stock-based compensation expense related to stock options of $ 4 thousand and zero , respectively.

As of September 25, 2022, there was $ 11 thousand 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:

Nine Months Ended

Three Months Ended

September 25,

September 26,

Outstanding at beginning of year

3 unchanged sentences

Restricted Stock Units:

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,

For the three months ended September 25, 2022 and September 26, 2021, the Company had stock-based compensation expense of $ 82 thousand and $ 42 thousand,

respectively, related to RSUs.

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:

As of September 25, 2022, there was no unamortized stock-based compensation expense related to

A summary of the status of restricted stock units as of September 25, 2022, and changes during the three months then ended is presented

Unvested at June 26 , 2022

Unvested at March 27 , 2022

Unvested at September 25 ,

Note F - Earnings per Share (EPS)

The following table shows the reconciliation of the numerator and denominator of the basic EPS calculation to the numerator and denominator of the

diluted EPS calculation (in thousands, except per share amounts):

The following table shows the reconciliation of the numerator and denominator of the basic EPS calculation to the numerator and

denominator of the diluted EPS calculation (in thousands, except per share amounts):

Three Months Ended

Nine Months Ended

Net income available to common stockholders

September 25,

September 26,

Net income available to common shareholders

Weighted average common shares

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Net income per common share

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 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.

For the three months ended September 25, 2022, exercisable options to purchase

111,750 shares of common stock at exercise prices from $ 3.95 to $ 13.11 were excluded from the computation of

diluted EPS because they had an intrinsic value of zero .

For the three months ended September 26, 2021, exercisable options to purchase 166,750 shares of common stock at exercise prices

ranging from $ 3.11 to $ 13.11

were excluded from the computation of diluted EPS because they had an intrinsic value of zero .

Note G - Income Taxes

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 income taxes.

For the three months ended September 25, 2022, the Company recorded an income tax expense of $ 92 thousand, most of which is attributable to current state taxes.

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

income, reversal of existing taxable temporary differences, and tax planning strategies.

In assessing the need for a valuation allowance, the Company considers both positive and negative evidence related to the likelihood of realization of

deferred tax assets.

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

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.

In assessing the need for the valuation allowance, the Company considers both positive and negative evidence related to the likelihood of realization

of deferred tax assets.

Note H - Segment Reporting

The Company has three

reportable operating segments as determined by management using the “management approach” as defined by the authoritative guidance on Disclosures about Segments of an Enterprise and Related Information:

(1) Pizza Inn Franchising, (2) Pie

Five Franchising and (3) Company-Owned Restaurants.

reportable operating segments as determined by management using the “management approach” as defined by ASC 280 Disclosures about Segments of an Enterprise and Related Information:

(1) Pizza Inn

Franchising, (2) Pie Five Franchising and (3) Company-Owned Restaurants.

These segments are a result of differences in the nature of the products and services sold.

Corporate administration costs, which include, but are not limited to, general accounting,

human resources, legal and credit and collections, are partially allocated to the three operating segments.

Other revenue

consists of non-recurring items.

Corporate administration costs, which include, but are not limited to,

general accounting, human resources, legal, and credit and collections, are partially allocated to the three operating segments.

Other revenue consists of nonrecurring items.

The Pizza Inn and Pie Five Franchising segments establish franchisees, licensees and territorial rights.

Revenue for this segment is

primarily derived from franchise royalties, franchise license fees, sale of area development and foreign master license rights, incentive payments from third party suppliers and distributors, advertising funds, and supplier convention

Assets for these segments include equipment, furniture and fixtures.

The Company-Owned Restaurant segment includes sales and operating results for all Company-owned restaurants.

Assets for this segment

include equipment, furniture and fixtures for the Company-owned restaurants.

Revenue for corporate administration and other consists of rental income and interest income.

Assets primarily include cash and

short-term investments, as well as furniture and fixtures located at the corporate office and trademarks and other intangible assets.

Revenue for these segments are derived from franchise royalties, franchise fees,

sale of area development and foreign master license rights, incentive payments from third party suppliers and distributors, advertising funds, and supplier convention funds.

Assets for these segments include equipment, furniture and

The Company-Owned Restaurants segment includes sales and operating results for all Company-owned restaurants.

Assets for this segment include equipment, furniture and fixtures for the

Company-owned restaurants.

As of September 25, 2022, the Company did not operate any Company-owned restaurants.

Corporate administration and other assets primarily include cash and short-term investments, as well as furniture and fixtures located at the corporate office and trademarks and other

intangible assets.

All assets are located within the United States.

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 nine months ended March 27, 2022 and March 28, 2021 (in thousands):

Summarized in the

following tables are net sales and operating revenues, depreciation and amortization expense, income from continuing operations before taxes, capital expenditures and assets for the Company’s reportable segments as of the three months

ended September 25, 2022 and September 26, 2021 (in thousands):

Three Months Ended

Nine Months Ended

September 25,

September 26,

Net sales and operating revenues:

4 unchanged sentences

Consolidated revenues

Depreciation and amortization expense:

Depreciation and amortization:

Corporate administration and other

Depreciation and amortization

Income before taxes:

Income/(loss) before taxes:

Pizza Inn Franchising

2 unchanged sentences

Corporate administration and other

Income before taxes

Income/(loss) before taxes

Geographic information (revenues):

1 unchanged sentence

Foreign countries

Consolidated total

Consolidated revenues

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