What changed in this filing

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Item 1A. Risk Factors

2021-04-15 compared with 2020-05-29 · 81 added, 65 removed, 1261 unchanged (10% of the section changed)

16 unchanged sentences

In the United States, individuals are

being encouraged to practice social distancing, restricted from gathering in groups and in some areas, placed on complete restriction

from non-essential movements outside of their homes.

In response to the COVID-19 outbreak and these changing conditions, we have

closed the dining rooms in all of our restaurants and we are operating on a to go or curbside pickup only model in the jurisdictions

where government regulations permit restaurants to continue to operate and where the guest demand makes such operations sustainable.

We have closed certain restaurants, modified work hours for our team members and identified and implemented cost savings measures

throughout our operations.

The COVID-19 outbreak and these responses have affected and will continue to adversely affect our guest

traffic, sales and operating costs and we cannot predict how long the outbreak will last or what other government responses may

being encouraged to practice social distancing, restricted from gathering in groups and in some areas, have been placed

on complete restriction from non-essential movements outside of their homes.

As a result of the pandemic the Company has limited

its operations through limiting hours of operations, reduced its capacity and utilized a delivery only concept as mandated by

each state and has temporarily closed five of our Company owned locations during the second quarter of 2020.

In addition, the

Company opened four new locations at the end of the third quarter on university campuses that were subsequently temporarily closed

due to the impact of COVID-19 on students returning to campus.

As of the date of the filing of this report the Company re-opened

three of the nine temporarily closed locations and permanently closed two underperforming locations.

Commencing in the second

quarter of 2020 the Company provided royalty relief to its franchisees by deferring half of their royalties earned by the Company

through July 2020.

The Company has not attempted to collect the deferred royalties as of the date of the filing of this report

as we provide time for the franchise locations to fully recover to pre-pandemic conditions.

The executive team deferred a portion

of their salaries in 2020 and some members continue to defer salary as of the date of the filing of this report.

various franchisee locations had to take similar actions by temporarily closing their locations and limiting their operations

as mandated by each state.

As of the date of the filing of this report seven of the franchise locations have permanently closed.

The COVID-19 outbreak and these responses have affected and will continue to adversely affect our guest traffic, sales and

operating costs and we cannot predict how long the outbreak will last or what other government responses may occur.

COVID-19 outbreak has also adversely affected our ability to open new restaurants.

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In order to satisfy the Company’s monthly expenses and

continue in operation through December 31, 2020, the Company closed on their public offering on February 12, 2020, in which we

raised net proceeds of $6,780,000.

Even if we are able to substantially increase revenues and reduce operating expenses, we may

need to raise additional capital.

In order to continue operating, we may need to obtain additional financing, either through borrowings,

private placements, public offerings, or some type of business combination, such as a merger, or buyout, and there can be no assurance

that we will be successful in such pursuits.

We may be unable to acquire the additional funding necessary to continue operating.

Accordingly, if we are unable to generate adequate cash from operations, and if we are unable to find sources of funding, it may

be necessary for us to sell one or more lines of business or all or a portion of our assets, enter into a business combination,

or reduce or eliminate operations.

These possibilities, to the extent available, may be on terms that result in significant dilution

to our shareholders or that result in our shareholders losing all of their investment in our Company.

continue in operation through December 31, 2021, the Company closed on a public offering on February 12, 2020 and September 10,

2020, in which we raised aggregate net proceeds of $11,720,001.

On October 27, 2020, the Company closed on the over-allotment

yielding proceeds of $764,399, net of underwrites and other fees of $75,600.

Even if we are able to substantially increase revenues

and reduce operating expenses, we may need to raise additional capital.

In order to continue operating, we may need to obtain

additional financing, either through borrowings, private placements, public offerings, or some type of business combination, such

as a merger, or buyout, and there can be no assurance that we will be successful in such pursuits.

We may be unable to acquire

the additional funding necessary to continue operating.

Accordingly, if we are unable to generate adequate cash from operations,

and if we are unable to find sources of funding, it may be necessary for us to sell one or more lines of business or all or a

portion of our assets, enter into a business combination, or reduce or eliminate operations.

These possibilities, to the extent

available, may be on terms that result in significant dilution to our shareholders or that result in our shareholders losing all

of their investment in our Company.

we are able to raise additional capital, we do not know what the terms of any such capital raising would be.

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deployments, reductions or closures of our military base locations;

economic conditions, which can affect restaurant traffic, local labor costs and prices we pay for the food products

and other supplies we use;

economic conditions, which can affect restaurant traffic, local labor costs and prices we pay for the food products and other

supplies we use;

patterns and food preferences that may differ from region to region;

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While we have experienced negative comparable same store sales of 12% during 2019 and 57% during

we have developed new sales and marketing efforts including new menu strategy/evolution, new marketing initiatives designed to

increase brand awareness, new operating platforms which improve speed of service and other tactics with the goal of providing

2020, we have developed new sales and marketing efforts including new menu strategy/evolution, new marketing initiatives designed

to increase brand awareness, new operating platforms which improve speed of service and other tactics with the goal of providing

positive same store sales in future years.

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ability to manage our debt is dependent on our level of cash flow from company-operated and franchised restaurants, net of costs.

It is anticipated that in 2020 the company will not have positive cash flow and will require additional outside funding

to maintain operations.

It is anticipated that in 2021 the company will not have positive cash flow and will require additional outside funding to maintain

An economic downturn may negatively impact our cash flows.

Credit and capital markets can be volatile,

which could make it more difficult for us to refinance our existing debt or to obtain additional debt or equity financings in

Such constraints could increase our costs of borrowing and could restrict our access to other potential sources of

future liquidity.

Our failure to have sufficient liquidity to make interest and other payments required by our debt could result

in a default of such debt and acceleration of our borrowings, which would have a material adverse effect on our business and financial

The lack of availability or access to build-to-suit leases and equipment financing leases could result in a decreased

number of new restaurants and have a negative impact on our growth.

Credit and capital markets can be volatile, which could

make it more difficult for us to refinance our existing debt or to obtain additional debt or equity financings in the future.

Such constraints could increase our costs of borrowing and could restrict our access to other potential sources of future liquidity.

Our failure to have sufficient liquidity to make interest and other payments required by our debt could result in a default of

such debt and acceleration of our borrowings, which would have a material adverse effect on our business and financial condition.

The lack of availability or access to build-to-suit leases and equipment financing leases could result in a decreased number of

new restaurants and have a negative impact on our growth.

strategy to open a significant amount of company-owned and operated restaurants on non-traditional sites such as universities,

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AAFES, as well as the Marines.

In addition, as of August 2019, the company has multiple requests for proposals, or RFPs, outstanding

for other non-traditional locations beyond military locations.

In the event these locations do not become available in the future

or the company is not awarded specific sites, the total restaurant count of company-owned and operated locations could be materially

In addition, non-traditional sites tend to have a lower capital investment to build out and more favorable lease terms.

In the event we cannot obtain non-traditional sites, the total outlay of capital expenditures could increase significantly over

time for new locations outside of non-traditional installations.

In addition, as of December 31, 2020, the company has four university locations built but not

open due to covid restrictions and one additional lease signed for future development.

The company continues to identify

and open ghost kitchen locations and other non-traditional consumer access points.

The company will continue to seek non-traditional

locations and consumer access across multiple venues.

In the event these locations do not become available in the future or

the Company is not awarded specific sites, the total restaurant count of company-owned and operated locations could be

materially affected.

In addition, non-traditional sites tend to have a lower capital investment to build out and more favorable

In the event we cannot obtain non-traditional sites, the total outlay of capital expenditures could increase significantly

over time for new locations outside of non-traditional installations.

military conflict or large troop deployment could affect our revenue at company and franchise military locations in the future.

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confidence in the accuracy and completeness of our financial reports and the market price of our Common Stock may decline.

As a public company, we are required to maintain internal control

over financial reporting and to report any material weaknesses in such internal control.

Further, we are required to report any

changes in internal controls on a quarterly basis.

In addition, we must furnish a report by management on the effectiveness of

internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act.

As of December 31, 2019, we had material

weakness in our internal controls.

We need to improve the design, implementation, and testing of the internal controls over financial

reporting required to comply with these obligations.

If we continue to identify material weaknesses in our internal control over

financial reporting or are unable to remedy our existing material weaknesses, if we are unable to comply with the requirements

of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent

registered public accounting firm is unable to express an opinion as to the effectiveness of its internal control over financial

reporting when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market

price of the Common Stock could be negatively affected.

We also could become subject to investigations by the stock exchange on

an exchange, Securities and Exchange Commission, or the Commission, or other regulatory authorities, which could require additional

financial and management resources.

In connection with management’s assessment of our internal control over financial reporting

as required under Section 404 of the Sarbanes-Oxley Act of 2002, we identified the following material weaknesses in our internal

control over financial reporting as of December 31, 2019:

a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses

in such internal control.

Further, we are required to report any changes in internal controls on a quarterly basis.

we must furnish a report by management on the effectiveness of internal control over financial reporting pursuant to Section 404

of the Sarbanes-Oxley Act.

As of December 31, 2020, we had material weakness in our internal controls.

We need to improve the

design, implementation, and testing of the internal controls over financial reporting required to comply with these obligations.

If we continue to identify material weaknesses in our internal control over financial reporting or are unable to remedy our existing

material weaknesses, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal

control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an

opinion as to the effectiveness of its internal control over financial reporting when required, investors may lose confidence

in the accuracy and completeness of our financial reports and the market price of the Common Stock could be negatively affected.

We also could become subject to investigations by the stock exchange on an exchange, Securities and Exchange Commission, or the

Commission, or other regulatory authorities, which could require additional financial and management resources.

In connection

with management’s assessment of our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley

Act of 2002, we identified the following material weaknesses in our internal control over financial reporting as of December 31,

do not have written documentation of our internal control policies and procedures.

204 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-K

Item 1A. Risk Factors