Good Times Restaurants Inc.

Previous wording

The Company’s fiscal year is a 52/53-week year ending on the last Tuesday of September. In a 52-week fiscal year, each of the Company’s quarterly periods comprises 13 weeks. The additional week in a 53-week fiscal year is added to the first quarter, making such quarter consist of 14 weeks. Our discussion for the fiscal years ending September 24, 2024 and September 26, 2023 each cover periods of 52 full calendar weeks. Fiscal 2025 will consist of 53 weeks and end on September 30, 2025.

Current wording

The Company’s fiscal year is a 52/53-week year ending on the last Tuesday of September. In a 52-week fiscal year, each of the Company’s quarterly periods comprises 13 weeks. The additional week in a 53-week fiscal year is added to the first quarter, making such quarter consist of 14 weeks. Our discussion for the fiscal years ending September 30, 2025 and September 24, 2024 each cover periods of 53 and 52 full calendar weeks, respectively. Fiscal 2026 will consist of 52 weeks and end on September 29, 2026.

Previous wording

We currently operate thirty-nine company-owned Bad Daddy’s restaurants. We also license one restaurant in North Carolina.

Current wording

We currently operate thirty-seven company-owned Bad Daddy’s restaurants. We also license one restaurant in North Carolina.

Previous wording

Commodity prices have been more stable during fiscal 2024, though beef and bacon are at or are near record highs and have exhibited extreme volatility.

Current wording

Commodity prices have been more stable during fiscal 2025 relative to the prior 3 years, with dairy byproducts, chicken, and eggs moderating. Though beef and bacon were at or are near record highs during the last quarter of fiscal 2025, they have recently began to decrease.

Previous wording

Net Revenues: Net revenues for fiscal 2024 increased $4,155,000 (3.0%) to $142,315,000 from $138,160,000 for fiscal 2023. Bad Daddy’s concept revenues increased $1,327,000 while our Good Times concept revenues increased $2,828,000.

Current wording

Net Revenues: Net revenues for fiscal 2025 decreased $750,000 (0.5%) to $141,630,000 from $142,380,000 for fiscal 2024. Bad Daddy’s concept revenues decreased $1,696,000 while our Good Times concept revenues increased $949,000.

Previous wording

Bad Daddy’s restaurant sales increased $1,298,000 to $103,539,000 in fiscal 2024 from $102,241,000 in fiscal 2023. This increase is a result of the fourth quarter 2023 Madison, Alabama restaurant opening, the prior year remodel temporary closure of the Greenville, South Carolina restaurant, and menu price increases partially offset by the prior year closure of the Cherry Creek restaurant and reduced customer traffic, concentrated in certain restaurants. Bad Daddy’s same store restaurant sales, also referred to as comparable sales, decreased 1.2% during fiscal 2024 compared to fiscal 2023. Bad Daddy’s restaurants are included in same store sales after they have been open a full eighteen months. This decrease is primarily driven by general weakness in the casual dining restaurant segment as indicated by sequentially lower same store sales as measured by Black Box Intelligence, weaker traffic specific to Bad Daddy’s in certain restaurants, partially offset by menu price increases. The average menu price increase was approximately 4.6% in 2024 over 2023. There were thirty-eight restaurants included in the same store sales base at the end of the fiscal year. Additionally, net revenues for fiscal 2024 were increased by $29,000 in license fees compared to the prior fiscal year.

Current wording

Bad Daddy’s restaurant sales decreased $2,154,000 to $101,385,000 in fiscal 2025 from $103,539,000 in fiscal 2024. This decrease is a result of the closure of one restaurant near the end of fiscal 2024, reduced customer traffic and by negative mix shift attributable to the success of the Company’s smashed patty burgers, partially offset by an additional week in the first fiscal quarter versus the prior year first fiscal quarter and menu price increases. Bad Daddy’s same store restaurant sales, also referred to as comparable sales, decreased 2.1% during fiscal 2025 compared to fiscal 2024. Bad Daddy’s restaurants are included in same store sales after they have been open a full eighteen months. This decrease is primarily driven by reduced customer traffic and value offered through drink specials and discounted sides, partially offset by menu price increases. The average menu price increase was approximately 3.3% in 2025 over 2024. There were thirty-eight restaurants included in the same store sales base at the end of the fiscal year. Additionally, net revenues for fiscal 2025 were increased by gift card breakage of $439,000 and license fees of $19,000 compared to the prior fiscal year.

Previous wording

Good Times restaurant sales increased $3,028,000 to $38,016,000 in fiscal 2024 from $34,988,000 in fiscal 2023. This increase is primarily due to the acquisition, by the Company during fourth quarter 2023, of two Good Times restaurants previously owned by franchisees, the current fiscal year acquisition of a Good Times restaurant previously owned by a franchisee, increased customer traffic, and menu price increases. Same store restaurant sales increased 2.9% during fiscal 2024 compared to fiscal 2023. This increase is primarily due to menu price increases and increased customer traffic. The average menu price increase in fiscal 2024 over fiscal 2023 was approximately 4.0%. Additionally, revenues for fiscal 2024 decreased by $200,000 in lower franchise revenues compared to fiscal 2023. Fiscal 2024 and fiscal 2023 for Good Times include franchise advertising contributions of $179,000 and $261,000, respectively.

Current wording

Good Times restaurant sales increased $1,213,000 to $39,229,000 in fiscal 2025 from $38,016,000 in fiscal 2024. This increase is driven by the first quarter 2025 acquisition of two Good Times restaurants, the third quarter 2024 acquisition of one Good Times restaurant, previously owned by franchisees, the third quarter 2024 temporary closure of one Good Times restaurant for remodel, and an additional week in the first fiscal quarter versus the prior year first fiscal quarter, partially offset by the fourth quarter 2024 closure of one Good Times restaurant as well as the first quarter 2025 temporary closure of one Good Times restaurant for remodel, and reduced customer traffic. Same store restaurant sales decreased 5.0% during fiscal 2025 compared to fiscal 2024. This decrease is primarily due to decreased customer traffic, partially offset by a menu price increase. The average menu price increase in fiscal 2025 over fiscal 2024 was approximately 1.0%. Additionally, revenues for fiscal 2025 decreased by $264,000 in lower franchise revenues compared to fiscal 2024, primarily due to the acquisition of two Good Times restaurants previously owned by a franchisee in early fiscal 2025 as well as the acquisition of one Good Times restaurant previously owned by a franchisee in the third fiscal quarter of 2024. Fiscal 2025 and fiscal 2024 for Good Times include franchise advertising contributions of $68,000 and $179,000, respectively.

Previous wording

During fiscal 2024, company-operated Good Times restaurants’ sales for restaurants that had been open a full eighteen months ranged from a low of $1,037,762 to a high of $2,545,795.

Current wording

During fiscal 2025, company-operated Good Times restaurants’ sales for restaurants that had been open a full eighteen months ranged from a low of $980,755 to a high of $2,532,226.

Previous wording

Food and Packaging Costs: For fiscal 2024, food and packaging costs increased $794,000 to $43,704,000 (30.9% of restaurant sales) compared to $42,910,000 (31.3% of restaurant sales) in fiscal 2023.

Current wording

Food and Packaging Costs: For fiscal 2025, food and packaging costs increased $183,000 to $43,887,000 (31.2% of restaurant sales) compared to $43,704,000 (30.9% of restaurant sales) in fiscal 2024.

Previous wording

Bad Daddy’s food and packaging costs were $32,155,000 (31.1% of restaurant sales) in fiscal 2024, up from $31,972,000 (31.3% of restaurant sales) in fiscal 2023. This increase is primarily attributable to the fourth quarter 2023 Madison, Alabama restaurant opening, and the prior year closure of the Cherry Creek restaurant partially offset by lower average unit volumes. The decrease, as a percent of sales, is attributable to the impact of a 4.6% average annual increase in menu pricing.

Current wording

Bad Daddy’s food and packaging costs were $31,520,000 (31.1% of restaurant sales) in fiscal 2025, down from $32,155,000 (31.1% of restaurant sales) in fiscal 2024. This decrease is primarily attributable to the closure of one Bad Daddy’s restaurant during the fourth quarter of fiscal 2024, lower average unit volumes, and lower purchase prices, primarily for chicken wings and potatoes, partially offset by an additional week in the first fiscal quarter versus the prior year first fiscal quarter and increased ground beef costs.

Previous wording

Payroll and Other Employee Benefit Costs: For fiscal 2024, payroll and other employee benefit costs increased $1,140,000 to $48,689,000 (34.4% of restaurant sales) compared to $47,549,000 (34.6% of restaurant sales) in fiscal 2023.

Current wording

Payroll and Other Employee Benefit Costs: For fiscal 2025, payroll and other employee benefit costs increased $588,000 to $49,277,000 (35% of restaurant sales) compared to $48,689,000 (34.4% of restaurant sales) in fiscal 2024.

Previous wording

Bad Daddy’s payroll and other employee benefit costs were $35,831,000 (34.6% of restaurant sales) for fiscal 2024, down from $35,892,000 (35.1% of restaurant sales) in fiscal 2023. The $61,000 decrease is primarily attributable to incentive compensation plan revisions, the prior fiscal year closure of one Denver, Colorado restaurant mostly offset by increases due to the fourth quarter 2023 Madison, Alabama restaurant opening, and the prior year remodel temporary closure of the Greenville, South Carolina restaurant. As a percent of sales, payroll and employee benefits costs decreased by 0.5% primarily attributable to incentive compensation plan revisions and a 4.6% increase in menu pricing.

Current wording

Bad Daddy’s payroll and other employee benefit costs were $35,325,000 (34.8% of restaurant sales) for fiscal 2025, down from $35,831,000 (34.6% of restaurant sales) in fiscal 2024. The $506,000 decrease is primarily attributable to the fourth fiscal quarter 2024 closure of one Bad Daddy’s restaurant, as well as reduced restaurant-level incentive compensation, partially offset by an additional week in the first fiscal quarter versus the prior year first fiscal quarter and decreased labor productivity. As a percent of sales, payroll and employee benefits costs increased by 0.2% primarily attributable to decreased labor productivity resulting from the deleveraging impact of lower sales, partially offset by reduced incentive compensation as well as the impact of the 3.3% increase in average menu pricing.

Previous wording

Occupancy Costs: Occupancy costs include rent, real and personal property taxes, common area maintenance expenses, licenses and insurance expense. For fiscal 2024, occupancy costs increased $480,000 from $9,607,000 (7.0% of restaurant sales) in fiscal 2023 to $10,087,000 (7.1% of restaurant sales).

Current wording

Occupancy Costs: Occupancy costs include rent, real and personal property taxes, common area maintenance expenses, licenses and insurance expenses. For fiscal 2025, occupancy costs increased $143,000 from $10,087,000 (7.1% of restaurant sales) in fiscal 2024 to $10,230,000 (7.3% of restaurant sales).

Previous wording

Other Operating Costs: For fiscal 2024, other operating costs increased $1,275,000 to $20,288,000 (14.3% of restaurant sales) up from $19,013,000 (13.9% of restaurant sales) in fiscal 2023.

Current wording

Other Operating Costs: For fiscal 2025, other operating costs increased $449,000 to $20,737,000 (14.7% of restaurant sales) up from $20,288,000 (14.3% of restaurant sales) in fiscal 2024.

Previous wording

Good Times other operating costs were $4,992,000 (13.1% of restaurant sales) in fiscal 2024, up from $4,179,000 (11.9% of restaurant sales) in fiscal 2023. The increase was primarily attributable to costs associated with three additional company-owned restaurants, as well as increased repair and maintenance, credit card and customer delivery fees and higher utility expenses.

Current wording

Good Times other operating costs were $5,730,000 (14.6% of restaurant sales) in fiscal 2025, up from $4,992,000 (13.1% of restaurant sales) in fiscal 2024. As a percent of sales, other operating costs increased by 1.5% in fiscal 2025 compared to fiscal 2024. This increase was primarily attributable to higher repair and maintenance, technology and utility expenses.

Previous wording

Depreciation and Amortization Costs: Depreciation and amortization includes depreciation on capital expenditures for restaurants and corporate assets as well as amortization of acquired franchise rights and leasehold interests. For fiscal 2024, depreciation and amortization costs increased $92,000 to $3,755,000 compared to $3,663,000 in fiscal 2023. The increases are due to additional company-owned restaurants, newly deployed assets including signs, menu boards, and restaurant remodels, partially offset by the prior year impairment of assets for two restaurants.

Current wording

Depreciation and Amortization Costs: Depreciation and amortization includes depreciation on capital expenditures for restaurants and corporate assets as well as amortization of acquired franchise rights and leasehold interests. For fiscal 2025, depreciation and amortization costs increased $199,000 to $3,954,000 compared to $3,755,000 in fiscal 2024. The increase is primarily due to additional company-owned restaurants and restaurant remodels.

Previous wording

Bad Daddy’s depreciation costs decreased $98,000 from $3,060,000 in fiscal 2023 to $2,962,000 in fiscal 2024.

Current wording

Bad Daddy’s depreciation costs increased $29,000 from $2,921,000 in fiscal 2024 to $2,950,000 in fiscal 2025.

Previous wording

Good Times depreciation costs increased $190,000 from $603,000 in fiscal 2023 to $793,000 in fiscal 2024.

Current wording

Good Times depreciation costs increased $171,000 from $793,000 in fiscal 2024 to $964,000 in fiscal 2025.

Previous wording

General and Administrative Costs: General and administrative costs include all corporate and administrative functions. Components of this category include accounting and administrative costs, regional and franchise support salaries and benefits; professional and consulting fees; travel; corporate information systems; training; board of directors’ expenses; office rent; and legal expenses. For fiscal 2024, general and administrative costs increased $1,351,000 from $9,165,000 (6.6% of total revenue) in fiscal 2023 to $10,516,000 (7.4% of total revenue) in fiscal 2024.

Current wording

General and Administrative Costs: General and administrative costs include all corporate and administrative functions. Components of this category include accounting and administrative costs, regional and franchise support salaries and benefits; professional and consulting fees; travel; corporate information systems; training; board of directors’ expenses; office rent; and legal expenses. For fiscal 2025, general and administrative costs decreased $847,000 from $10,581,000 (7.4% of total revenue) in fiscal 2024 to $9,734,000 (6.9% of total revenue) in fiscal 2025.

Previous wording

The $1,351,000 increase in general and administrative expenses in fiscal 2024 is primarily attributable to:

Current wording

The $847,000 decrease in general and administrative expenses in fiscal 2025 is primarily attributable to:

Previous wording

**Advertising Costs:**For fiscal 2024, advertising costs increased $270,000 from $3,258,000 (2.4% of total revenues) in fiscal 2023 to $3,528,000 (2.5% of total revenues) in fiscal 2024.

Current wording

**Advertising Costs:**For fiscal 2025, advertising costs decreased $213,000 from $3,528,000 (2.5% of total revenues) in fiscal 2024 to $3,315,000 (2.3% of total revenues) in fiscal 2025.

Previous wording

Bad Daddy’s advertising costs increased $307,000 from $1,866,000 (1.8% of total revenues) in fiscal 2023 to $2,173,000 (2.1% of total revenues) in fiscal 2024. The increase is primarily due to increases in third party gift card commissions and printing costs, partially offset by decreases in local store marketing and media services. Bad Daddy’s advertising costs consist primarily of menu development, printing costs, local store marketing and social media. All restaurants contribute to an advertising materials fund based on a percentage of restaurant sales.

Current wording

Bad Daddy’s advertising costs increased $18,000 from $1,876,000 (1.8% of total revenues) in fiscal 2024 to $1,894,000 (1.9% of total revenues) in fiscal 2025. The increase is primarily due to increases in TV and outdoor media partially offset by a decrease in social media advertising. Bad Daddy’s advertising costs consist primarily of third-party gift card commissions, menu development, printing costs, local store marketing and social media. All restaurants contribute to an advertising materials fund based on a percentage of restaurant sales.

Previous wording

Good Times advertising costs decreased $37,000 from to $1,392,000 (3.9% of total revenues) in fiscal 2023 to $1,355,000 (3.5% of total revenues) in fiscal 2024. The decrease is primarily due to a reduction in TV media and an increase in product rebates, partially offset by increased market research. Good Times advertising costs consist primarily of contributions made to the advertising materials fund and a regional advertising cooperative based on a percentage of restaurant sales which are used to provide radio advertising, social media, on-site and point-of-purchase materials. Advertising costs are presented gross, with franchisee contributions to the fund being recognized as a component of franchise revenues.

Current wording

Good Times advertising costs increased $63,000 from $1,355,000 (3.5% of total revenues) in fiscal 2024 to $1,418,000 (3.6% of total revenues) in fiscal 2025. The increase is primarily due to increased outdoor and social media expenses, sponsorships and agency fees, partially offset by decreased radio media expense. Good Times advertising costs consist primarily of radio advertising, agency fees and social media. Advertising costs are presented gross, with franchisee contributions to the fund being recognized as a component of franchise revenues.

Previous wording

Loss (Gain) on Restaurant Asset Disposals: For fiscal 2024, the loss on restaurant asset disposals was $2,000 compared to a gain of $41,000 in fiscal 2023. The net loss in fiscal 2024 is primarily due to restaurant fixed asset retirements, mostly offset by a deferred gain on previous sale lease-back transactions related to two Good Times restaurants. The gain in fiscal 2023 is primarily comprised of a deferred gain on previous sale lease-back transactions related to two Good Times restaurants.

Current wording

(Gain) loss on lease terminations and asset disposals: For fiscal 2025, the net gain on lease terminations and asset disposals was $469,000 compared to a net loss of $2,000 in fiscal 2024. The net gain in fiscal 2025 is primarily due to gains on lease terminations related to three Bad Daddy’s locations. The net loss in fiscal 2024 was primarily due to restaurant fixed asset retirements, mostly offset by a deferred gain on previous sale lease-back transactions related to two Good Times restaurants.

Previous wording

Long-lived Asset Impairment Charges: For fiscal 2024, the asset impairment charge was $698,000 compared to $1,589,000 in fiscal 2023. We review long-lived assets and intangibles subject to amortization for impairment when there are factors that indicate the carrying value of such assets may not be recoverable. The current year impairment costs are primarily attributable to the impairment of the lease right-of-use assets of two Bad Daddy’s locations. During fiscal 2023 we recorded non-cash charges of $1,519,000 and $70,000 related to four Bad Daddy’s locations and two Good Times locations, respectively.

Current wording

Long-lived Asset Impairment Charges: For fiscal 2025, the asset impairment charge was $627,000 compared to $698,000 in fiscal 2024. We review long-lived assets and intangibles subject to amortization for impairment when there are factors that indicate the carrying value of such assets may not be recoverable. The current year impairment costs are primarily attributable to the impairment of lease right-of-use assets for two Bad Daddy’s locations, the impairment of one Good Times location, as well as new assets deployed in restaurants where impairment was previously assessed and the Company’s current analysis indicated impairment of assets associated with those restaurants. During fiscal 2024 we recorded non-cash impairment charges of $689,000 and $9,000 related to Bad Daddy’s and Good Times, respectively.

Previous wording

Litigation Contingencies: There was $332,000 of income related to the adjustment of the Company’s litigation contingency reserve during fiscal 2024. This adjustment is due tothe reversal of our previous contingency reserve of $332,000. The Company did not record any changes in litigation contingencies in fiscal 2023.

Current wording

Litigation Contingencies: There were no litigation contingency costs during fiscal 2025. There was $332,000 of income related to the adjustment of the Company’s litigation contingency reserve during fiscal 2024.

Previous wording

Income from Operations: Income from operations was $1,380,000 in fiscal 2024 compared to income from operations of $963,000 in fiscal 2023. The change from fiscal 2023 to fiscal 2024 was primarily attributable tomatters discussed in the relevant sections above.

Current wording

Income from Operations: Income from operations was $330,000 in fiscal 2025 compared to $1,380,000 in fiscal 2024. The change from fiscal 2024 to fiscal 2025 was primarily attributable tomatters discussed in the relevant sections above.

Previous wording

Interest Expense: Interest expense was $125,000 during fiscal 2024, compared with $78,000 during fiscal 2023.

Current wording

Interest Expense: Interest expense was $196,000 during fiscal 2025, compared with $125,000 during fiscal 2024.

Previous wording

Provision for Income Taxes: There was a $624,000 benefit from income taxes for fiscal 2024, primarily driven by changes in the projections of full-year net income and available tax credits. There was a $10,787,000 benefit for fiscal 2023. The most significant driver of the prior year benefit was the release of the valuation allowance previously assessed on the deferred tax assets. See Note 7 to the Consolidated Financial Statements included in this report for further information.

Current wording

Provision for Income Taxes: There was an $824,000 benefit from income taxes for fiscal 2025, compared to a $624,000 benefit for fiscal 2024. The primary driver of the tax benefit for both fiscal 2025 and 2024 were changes in available tax credits. See Note 7 to the Consolidated Financial Statements included in this report for further information.

Previous wording

Net Income: Net income for fiscal 2024 was $1,879,000 compared to net income of $11,672,000 in fiscal 2023. The change from fiscal 2023 to fiscal 2024 was primarily attributable to the matters discussedin the relevant sections above.

Current wording

Net Income: Net income for fiscal 2025 was $1,098,000 compared to net income of $1,879,000 in fiscal 2024. The change from fiscal 2024 to fiscal 2025 was primarily attributable to the matters discussedin the relevant sections above.

Previous wording

**Income Attributable to Non-Controlling Interests:**The non-controlling interest represents the limited partners’ or members’ share of income in the Good Times and Bad Daddy’s joint-venture restaurants.

Current wording

**Income Attributable to Non-Controlling Interests:**The non-controlling interest represents the limited partner’s share of income in the Good Times restaurants owned by a partnership in which the Company is the controlling partner.

Previous wording

The full $266,000 of the current fiscal year’s income is attributable to the Good Times joint-venture restaurants, compared to $367,000 in the same prior year period. This $101,000 decrease is primarily due to the temporary closure for remodel of one joint-venture restaurant during the third fiscal quarter of 2024, as well decreased profitability during the fiscal year of the six restaurants involved in the partnership.

Current wording

For fiscal 2025, the income attributable to non-controlling interests was $74,000 compared to $266,000 for fiscal 2024. This $192,000 decrease is primarily due to decreased profitability during the fiscal year of the six restaurants involved in the partnership.

Previous wording

EBITDA is defined as net income (loss) before interest, income taxes and depreciation and amortization.

Current wording

EBITDA is defined as net income before interest, income taxes and depreciation and amortization.

Previous wording

Adjusted EBITDA is defined as EBITDA, adjusted for non-cash stock-based compensation expense, preopening expense, non-recurring acquisition costs, non-cash disposal of assets and non-cash asset impairment charges. Adjusted EBITDA is intended as a supplemental measure of our performance that is not required by or presented in accordance with GAAP. We believe that EBITDA and Adjusted EBITDA provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results. Our management uses EBITDA and Adjusted EBITDA (i) as a factor in evaluating management's performance when determining incentive compensation and (ii) to evaluate the effectiveness of our business strategies.

Current wording

Adjusted EBITDA is defined as EBITDA, adjusted for non-cash stock-based compensation expense, preopening expense, non-recurring acquisition costs, non-cash disposal of assets, litigation contingencies, and non-cash asset impairment charges. Adjusted EBITDA is intended as a supplemental measure of our performance that is not required by or presented in accordance with GAAP. We believe that EBITDA and Adjusted EBITDA provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results. Our management uses EBITDA and Adjusted EBITDA (i) as a factor in evaluating management's performance when determining incentive compensation and (ii) to evaluate the effectiveness of our business strategies.

Previous wording

Cash and Working Capital: As of September 24, 2024, we had a working capital deficit of $9,130,000. Our working capital position benefits from the fact that we generally collect cash from sales to customers the same day, or in the case of credit or debit card transactions, within a few days of the related sale and have payment terms with vendors that are typically between 14 and 21 days. Our current working capital deficit is additionally affected by the recognition of short-term lease liabilities, as we lease substantially all of our real estate and have both current- and long-term obligations to our landlords. We believe that we will have sufficient capital to meet our working capital, and recurring capital expenditure needs in fiscal 2025. As of September 24, 2024, the Company had approximately $268,000 in outstanding commitments related to the remodel of one Good Times restaurant. We anticipate any commitments in fiscal 2025 will be funded out of existing cash or future borrowings against the Cadence Credit Facility.

Current wording

As of September 30, 2025, we had a working capital deficit of $9,124,000. Our working capital position benefits from the fact that we generally collect cash from business-to-customer sales the same day, or in the case of credit or debit card transactions, within a few days of the related sale and have payment terms with vendors that are typically between 14 and 21 days. Our current working capital deficit is additionally affected by the recognition of short-term lease liabilities, as we lease substantially all of our real estate and have both current- and long-term obligations to our landlords. We believe that we will have sufficient capital to meet our working capital, and recurring capital expenditure needs in fiscal 2026. We anticipate any commitments in fiscal 2026 will be funded out of existing cash or future borrowings against the Cadence Credit Facility.

Previous wording

The Company and its wholly owned subsidiaries (the “Subsidiaries”) maintain an amended and restated credit agreement with Cadence Bank (“Cadence”) pursuant to which, Cadence agreed to loan the Company up to $8,000,000, which has a maturity date of April 20, 2028 (the “Cadence Credit Facility”). The Cadence Credit Facility amended and restated the Company’s prior credit facility with Cadence in its entirety. The Cadence Credit Facility accrues commitment fees on the daily unused balance of the facility at a rate of 0.25%. The loans may from time to time consist of a mixture of SOFR Rate Loans and Base Rate Loans with differing interest rates based upon varying additions to the Federal Funds Rate, the Cadence prime rate or Term SOFR. Each of the Subsidiaries are guarantors of the Cadence Credit Facility.

Current wording

The Company and its wholly owned subsidiaries (the “Subsidiaries”) maintain an amended and restated credit agreement with Cadence Bank (“Cadence”) pursuant to which, Cadence agreed to loan the Company up to $8,000,000, which has a maturity date of April 20, 2028 (as amended to date, the “Cadence Credit Facility”). The Cadence Credit Facility amended and restated the Company’s prior credit facility with Cadence in its entirety. The Cadence Credit Facility accrues commitment fees on the daily unused balance of the facility at a rate of 0.25%. The loans may from time to time consist of a mixture of SOFR Rate Loans and Base Rate Loans with differing interest rates based upon varying additions to the Federal Funds Rate, the Cadence prime rate or Term SOFR. Each of the Subsidiaries are guarantors of the Cadence Credit Facility.

Previous wording

As a result of entering into the Cadence Credit Facility and the various amendments, the Company paid loan origination costs including professional fees of approximately $299,000 and is amortizing these costs over the term of the credit agreement. As of September 24, 2024, the unamortized balance of these fees was $95,000.

Current wording

As a result of entering into the Cadence Credit Facility and the various amendments, the Company paid loan origination costs including professional fees of approximately $324,000 and is amortizing these costs over the term of the credit agreement. As of September 30, 2025, the unamortized balance of these fees was $93,000.

Previous wording

As of September 24, 2024, there were $500,000 of borrowings against the facility, all of which is due during the fiscal year ending September 2028 and is classified as a long-term liability in the accompanying balance sheet. Availability of the Cadence Credit Facility for borrowings is reduced by the outstanding face value of any letters of credit issued under the facility. As of September 24, 2024, there were approximately $10,000 in outstanding letters of credit issued under the facility, and approximately $7,490,000 of committed funds available.

Current wording

As of September 30, 2025, there were $2,000,000 of borrowings against the facility, all of which is due during the fiscal year ending September 2028 and is classified as a long-term liability in the accompanying balance sheet. Availability of the Cadence Credit Facility for borrowings is reduced by the outstanding face value of any letters of credit issued under the facility. As of September 30, 2025, there were approximately $10,000 in outstanding letters of credit issued under the facility, and approximately $5,990,000 of committed funds available.

Previous wording

Good Times Drive Thru, Inc., a wholly owned subsidiary of the Company is the maker of an unsecured promissory note in connection with the purchase of the previously franchised Good Times Burgers and Frozen Custard restaurant located in the Denver suburb of Parker, Colorado. JGN Management, Inc., the former franchisee, is the holder of the note. The Parker Promissory Note fully amortizes over its original ten-year life maturing on June 1, 2034, carries an interest rate of 5.00% and is, in all respects, subordinate to the Cadence Credit Facility. As of September 24, 2024, the outstanding principal balance on the Parker Promissory Note was $373,000. Annual principal maturities over the next five years are approximately $35,000 each year.

Current wording

Good Times Drive Thru, Inc., a wholly owned subsidiary of the Company is the maker of an unsecured promissory note in connection with the purchase of the previously franchised Good Times Burgers and Frozen Custard restaurant located in the Denver suburb of Parker, Colorado. JGN Management, Inc., the former franchisee, is the holder of the note. The Parker Promissory Note fully amortizes over its original ten-year life maturing on June 1, 2034, carries an interest rate of 5.00% and is, in all respects, subordinate to the Cadence Credit Facility. As of September 30, 2025, the outstanding principal balance on the Parker Promissory Note was $342,000. Annual principal maturities over the next five years are approximately $35,000 each year.

Previous wording

Operating Cash Flows. Net cash from operating activities decreased by $2,835,000, primarily due to decreased net income, income tax provision and long-lived asset impairments as well as increased cash usage for accounts payable and lease liabilities, offset by decreased cash usage for accrued liabilities, other assets and deferred income, as presented on the Consolidated Statements of Cash Flows.

Current wording

Operating Cash Flows. Net cash from operating activities decreased by $3,517,000, primarily due to decreased net income, income tax provision and an increase in non-cash gains, as well as increased cash usage for accounts payable, accrued liabilities and lease liabilities, partially offset by increased cash flow related to receivables, prepaid expenses, inventories and other assets, as presented on the Consolidated Statements of Cash Flows.

Previous wording

Investing Cash Flows. Net cash used in investing activities for the fiscal year ended September 24, 2024 and September 26, 2023 were $3,662,000 and $10,443,000, respectively, which primarily reflect the purchases of property and equipment in each period as well as the acquisition of a restaurant from a franchisee in the current year period, and the net purchase of all non-controlling interests in our Bad Daddy’s locations in the prior year period.

Current wording

Investing Cash Flows. Net cash used in investing activities for the fiscal year ended September 30, 2025 and September 24, 2024 were $3,844,000 and $3,662,000, respectively, which primarily reflect the purchases of property and equipment and acquisitions of restaurants from franchises in each year as well as the payment of lease termination fees in the current year.